Do you want to start a VR lounge and need to write a plan? If YES, here is a detailed sample VR lounge business plan template & FREE feasibility report. Virtual Reality (VR) lounges are built specifically for Location-Based Entertainment (LBE). They are multiplayer, intuitive and engaging attractions that are hard to get at home, but more importantly, designed to drive social experience with friends, family and co-workers which makes it is a good business to start in the united states.
If you are considering starting a Virtual Reality (VR) lounge business, the good news is that you can’t get it wrong because of the number of people who are looking towards escaping the boredom of normal life.
A Sample VR Lounge Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
Virtual Reality (VR) lounges are part of the Arcade, Food & entertainment industry and players in this industry include businesses that primarily operate video game arcades and game-focused family entertainment centers, which typically sell food and beverages.
Industry operators rent or purchase card- or coin-operated arcade games that customers play for a fee. Establishments that primarily focus on gambling games, billiards, miniature golf and other larger-scale or outdoor amusements are not included in this industry.
According to a report published by IBISWorld, the Arcade, Food and Entertainment industry’s evolution has continued over the five years to 2019. Rapid technological change and shifting preferences have triggered a structural shift within the industry since its heyday in the 1980s.
As the home console rose in prominence, coin-operated games fell in popularity. Substitute products, including game consoles, offer convenience and long-term cost savings, while online and mobile games can largely be played at a nominal cost or for a free.
An improving economic outlook has spurred increased consumer spending, which has helped encourage consumers to spend more liberally on out-of-home entertainment without operators significantly lowering prices to buoy sales volumes.
The report further shows that over the five years to 2024, these trends are expected to continue. Game rooms are no longer the primary market for video game consumption, so developers dedicate far less funding to the creation of arcade games. This lack of resources stifles innovation, diminishing the ability of industry operators to draw in patrons with state-of-the-art offerings.
Statistics has it that in the United States of America alone, there are about 8,358 licensed and registered arcade, food and entertainment complexes responsible for employing about 56,513 employees and the industry rakes in a whooping sum of $3 billion annually with an annual growth rate projected at 2.6 percent between 2015 and 2022.
Although there are major players with significant market shares in this industry, but Dave & Buster’s Entertainment Inc. is the company with the lion share of the industry.
Lastly, the need for you to equip your virtual reality VR lounge can’t possibly be overemphasized and you should be aware that it is quite expensive equipping a virtual reality VR lounge. A high-end headset like HTC’s Vive or the Oculus Rift will run you $599 and $799, respectively. At the present costs, a VR fan will have to shell out at least $1,600 for a high-end virtual reality experience.
2. Executive Summary
Woops Zone® Virtual Reality Lounge, LLC is a standard, licensed and well – equipped virtual reality arcade lounge that will be located in the entertainment hub of Santa Fe – New Mexico. We have been able to secure a standard facility in a central and easy to locate location in Santa Fe.
We are well equipped to service the whole of the community as well as visitors and tourists. Woops Zone® Virtual Reality Lounge, LLC is going to become the number one destination for virtual reality (VR) enthusiasts (gamers and gamblers alike) in the whole of Santa Fe – New Mexico.
We are well equipped and positioned to operate licensed virtual reality arcade lounge with a wide range of virtual reality games suitable for individuals, birthday parties and teambuilding et al, from top flight virtual reality games production companies like Microsoft Corporation, Nintendo Co. Ltd., Activision Blizzard Inc., GameStop Corp., Sony Corporation and Electronic Arts Inc. Our virtual reality arcade also has enough parking space.
We conducted a thorough market research and feasibility studies and we were able to come to the conclusion that Santa Fe – New Mexico is the right place to start our VR arcade lounge. Our client’s best interest would always come first, and everything we do is guided by our values and professional ethics.
Woops Zone® Virtual Reality Lounge, LLC will be open 24 hours in a day during weekends (Fridays to Sundays) and from 6:00 am to 12 midnight from Mondays to Thursdays in order for us to accommodate people with different time preferences.
Woops Zone® Virtual Reality Lounge, LLC will at all times demonstrate her commitment to sustainability, both individually and as a business, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Woops Zone® Virtual Reality Lounge, LLC is owned by Solomon Boston and his immediate family members. The business will be managed by Solomon Boston and his son Jerry Hamilton. Solomon Boston has over 15 years’ experience in the Arcade, Food and Entertainment Complexes industry working for some of the leading VR arcade lounges in Santa Fe – New Mexico.
3. Our Products and Services
Woops Zone® Virtual Reality Lounge, LLC is in the industry to provide standard virtual reality arcade lounges, why we have been able to put up a facility that can help us achieve the goal. We are optimistic that anyone who makes use of our virtual reality arcade lounge will definitely derive huge value for their money.
These are the services and amenities that will be made available to our clients;
- Card- and coin-operated virtual reality games
- Food and beverages, including alcoholic beverages
- Corporate and party event services
- Virtual reality games and accessories merchandize
4. Our Mission and Vision Statement
- Our Vision of starting Woops Zone® Virtual Reality Lounge, LLC is to build a world – class virtual reality arcade lounge that can favorably compete with leading virtual reality lounges in the United States.
- Our mission for establishing Woops Zone® Virtual Reality Lounge, LLC is to build a virtual reality arcade lounge that has the biggest play space in Santa Fe – New Mexico with immersive VR experiences supported by the best equipment on the market and also to make profits from the Industry; we want to create multiplayer, intuitive and engaging attractions that are hard to get at home.
Our Business Structure
Woops Zone® Virtual Reality Lounge, LLC is in business to become the leadingVR lounge in Santa Fe – New Mexico and we are fully aware that it will take the right facility, management and organizational structure to achieve our goal.
The kind of the virtual reality arcade business we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands in the industry as long as they are ready to work with us. In view of that, we have made provisions for the following positions to be occupied by highly qualified and experienced staff;
- Chief Executive Office – CEO
- Marketing and Sales Officer
- VR Games Instructors/Assistants (5)
- Customer Care Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creates, communicates, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Carries out staff induction for new team members
- Responsible for overseeing the smooth running of HR and administrative tasks for the organizationMaintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of VR games and other equipment by completing preventive maintenance requirements; calling for repairs.
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
- Oversees the smooth running of the daily activities in the virtual reality arcade lounge.
VR Game Instructors/Assistant (5)
- Responsible for giving out the required instructions and other support needed by patrons
- Responsible for teaching newbies how to play our VR games
- Responsible for selling food, alcoholic and nonalcoholic beverages
- Ensures that the virtual reality game gadgets and machines are well arranged after every session
- Responsible for recommending the replacement of worn out or damaged VR headsets, pads, consoles and other video game accessories
Marketing and Sales Officer (2)
- Identifies, prioritizes, and reaches out to new clients, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts
- Writes winning proposal documents, negotiate fees and rates in line with organizations’ policy
- Responsible for handling business research, market surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Documents all customer contact and information
- Represents Woops Zone® Virtual Reality Lounge, LLC in strategic meetings
- Helps to increase sales and growth for Woops Zone® Virtual Reality Lounge, LLC.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for the organization
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for Woops Zone® Virtual Reality Lounge, LLC
- Serves as internal auditor for Woops Zone® Virtual Reality Lounge, LLC.
Client Service Executive
- Welcomes members and potential members/clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the organization’s products and services
- Manages administrative duties assigned by the management in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
- Responsible for cleaning in and around the virtual reality arcade lounge
- Cleanses up after customers
- Washes glassware and utensils after each use.
- Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the manager.
6. SWOT Analysis
Woops Zone® Virtual Reality Lounge, LLC is in business to provide virtual reality arcade facility for gamers in Santa Fe – New Mexico and at the same time to make profits. We are aware that there are competitions in the industry which is why we took out time to conduct an effective SWOT Analysis before investing our hard – earned money into the business.
We know that if we get things right before starting our virtual reality arcade lounge, we will not have to struggle before attract clients and building our customer base to a level where we can easily breakeven in record time. We hired the services of a HR and Business consultant with bias in business structuring to help us conduct SWOT analysis for our organization and he did a pretty good job for us.
Here is a of the result we got from the SWOT analysis that was conducted on behalf of Woops Zone® Virtual Reality Lounge, LLC;
One of the obvious strengths that will definitely stand as a plus for Woops Zone® Virtual Reality Lounge, LLC is the fact that our facility is centrally located in a densely populated area in Santa Fe – New Mexico; our location is in fact one of our major strengths.
We equally have a team of highly qualified professionals who will work with our clients and lastly our wide range of VR games are amongst the best that anybody living in Santa Fe – New Mexico can get; they are highly entertaining, easy to use and highly reliable.
We critically looked into our Business model and we were able to identify two major weakness. One is the fact that we are a new business and the second is the fact that we may not have the financial resources required to match up with existing virtual reality arcade lounges when it comes to employing experts in the industry and generating the needed hype that can drive traffic towards our lounge.
We are centrally located in one of the busiest and densely populated areas in Santa Fe – New Mexico and we are open to all the available opportunities the city has to offer. We will be open 24 hours in a day during weekends (Fridays to Sundays) and from 6:00 am to 12 midnight from Mondays to Thursdays giving us the advantage to leverage on any available opportunity.
Recent studies show that operators will continue to suffer under the weight of competition from substitute forms of entertainment like home video game consoles, the internet, online gaming and MPX players. Manufacturers will need to re-invent specific games that can only be enjoyed in arcades in order to generate positive revenue.
Still, the rising cost of machines, manufacturing decline in product innovation will limit the number of operators that are able to compete hence posing a threat to our business, and lastly, the emergence of new competitors within the same location where our virtual reality arcade lounge is located.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with the trend in this industry, you will notice that competition from home video game systems continues to impede the industry’s performance, with the popularity of traditional arcades dwindling. Arcades have attempted to maintain their profits by introducing food and beverage sales to their services, but this strategy has not proved to be effective overall.
Since the early 1990s, growth in home video game consoles has been a major factor in the industry’s decline, and online gaming has followed, offering gamers the opportunity to compete with other individuals without leaving their homes. Furthermore, with discretionary spending falling, families are opting to save money by skipping trips to arcade, food and entertainment complexes.
As a result of these negative trends, operators are attempting to reclaim some of their previous popularity by investing into restaurants and improving their existing premises. Still, the number of establishments is expected to decline over the next five years, with many businesses expected to close in the midst of reduced consumer spending and poor credit conditions.
Employment is expected to decline as well, though an increase in the number of food service options within arcade complexes has prevented a sharper drop. Wages are also estimated to fall in the coming year. As virtual reality arcade lounges grow, it becomes necessary for them to develop new service offerings or install new facilities that will help them attract more people.
Little wonder some virtual reality arcade lounges now have fresh juice and smoothie bars, and retail food and drinks within their facility to encourage people to relax and socialize. In order words, it is very important for VR lounges to continue to improvise if they want to grow their business.
8. Our Target Market
Aside from teenagers and children, the target market for virtual reality arcade lounges cuts across people of different walks of life. The fact that people visit virtual reality lounges for various reasons makes marketing the business interesting. These are the category of people that we intend marketing our VR center to;
- High school students
- Applicants/School Leavers
- Sports Men and Women
- College Students
- Corporate organizations looking towards hosting team building office parties, corporate outing or offsite event
- Event planning organizations looking towards hosting birthday parties and private events
Our Competitive Advantage
The Arcade, Food and Entertainment Complexes industry is indeed a prolific and highly competitive industry. Clients will only patronize your lounge if they are comfortable with the VR games you have or if you can provide the enabling environment and facility for them to socialize and get entertained.
Woops Zone® Virtual Reality Lounge, LLC is centrally located in a densely populated – residential area in Santa Fe – New Mexico. We equally have a team of highly qualified professionals who will work with all our clients and make it easier and comfortable when they patronize our virtual reality arcade lounge.
So also, our VR headsets, consoles and game machines are amongst the best that anybody living in Santa Fe – New Mexico can get; they are easy to use and highly reliable.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Woops Zone® Virtual Reality Lounge, LLC is established with the aim of maximizing profits in the Arcade, Food and Entertainment Complexes industry and we are going to ensure that we do all it takes to attract individuals, groups and corporate clients on a regular basis.
Woops Zone® Virtual Reality Lounge, LLC will generate income by offering the following services;
- Card- and coin-operated virtual reality games
- Food and beverages, including alcoholic beverages
- Corporate and party event services
- Virtual reality games and accessories merchandize
10. Sales Forecast
We are well positioned to take on the available market in Santa Fe – New Mexico and on our online platforms and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the Arcade, Food and Entertainment Complexes industry – market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projection for Woops Zone® Virtual Reality Lounge, LLC, it is based on the location of our virtual reality arcade lounge facility and the wide range of VR games, foods and drinks that we will be offering;
- First Fiscal Year (FY1): $280,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $500,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. There won’t also be any major competitor offering same additional services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Our marketing strategies will be directed towards achieving specific objectives that will support the strategic goals of the organization. The truth is that all that we do will be geared towards creating new market channels, increasing sales and increase our market share.
At Woops Zone® Virtual Reality Lounge, LLC, our marketing strategies will be consistent throughout the marketing mix and we will take into consideration product improvement, promotion, and price. As part of our sales and marketing strategies, we will pay attention to the promotion of our virtual reality arcade lounge so as to attract people to make use of our facility.
Part of the marketing and sales strategies that we will adopt are;
- Open our virtual reality arcade lounge with a big party in other to attract residents who are our first target
- Advertise our virtual reality arcade lounge on national dailies, local TV and radio stations
- Promote our virtual reality arcade lounge online via our official website and all available social media platforms
- Introduce our virtual reality arcade lounge by sending introductory letters alongside our brochure to sports clubs, schools, corporate organizations, households and key stake holders in Santa Fe – New Mexico
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
- Making our first impression count positively to those making use of our virtual reality arcade lounge for the first time
- Make use of attractive hand bills to create awareness and also to give direction to our lounge
- Adopt direct mailing coupon marketing approach
- Position our signage/flexi banners at strategic places in and around Santa Fe – New Mexico
- Create a loyalty plan that will enable us reward our consistent clients especially those that registered as a family or as a group
- Engage on roadshows within our neighborhood to create awareness for our virtual reality arcade lounge.
11. Publicity and Advertising Strategy
We have been able to work with our branding and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the hearts of our target market. We are set to become the number one choice in the whole of Santa Fe – New Mexico which is why we have made provisions for effective publicity and advertisement of our lounge.
Below are the platforms we intend to leverage on to promote Woops Zone® Virtual Reality Lounge, LLC;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community based gaming or sport events and competitions
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
- Install our Bill Boards in strategic locations all around Santa Fe – New Mexico
- Engage in roadshow from time to time in targeted neighborhoods all around Santa Fe – New Mexico
- Distribute our fliers and handbills in target areas all around Santa Fe – New Mexico
- List Woops Zone® Virtual Reality Lounge, LLC on local directories/yellow pages
- Advertise our virtual reality arcade lounges in our official website and employ strategies that will help us pull traffic to the site.
- Ensure that all our staff members wear our branded shirts and all our vehicles are well branded with our corporate logo et al.
12. Our Pricing Strategy
Since the bulk of our customers comes from the middle class, it is advisable to set our prices on the moderate side. We will not allow the drive to recoup our money fast tempt us to set prices that can scare our customers off.
In view of that, our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than what our competitors are charging.
Be that as it may, we have put plans in place to offer discount services once in a while and also to reward our loyal customers especially when they refer clients to us or when they register as a family or a group.
- Payment Options
The payment policy adopted by Woops Zone® Virtual Reality Lounge, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Woops Zone® Virtual Reality Lounge, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via mobile money
- Payment via Point of Sales Machines (POS Machines)
- Payment via check
In view of the above, we have chosen banking platforms that will enable our clients make payments without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget for establishing a standard virtual reality arcade lounge in Santa Fe – New Mexico and here are the key areas where we will spend our startup capital;
These is the key areas where we will spend our startup capital on;
- The total fee for registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits – $1,500.
- Marketing promotion expenses (8,000 flyers at $0.04 per copy) for the total amount of – $10,000.
- The total cost for hiring Business Consultant – $2,000.
- The amount needed for the purchase of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $15,800.
- The total cost for the purchase of accounting software, CRM software and Payroll Software – $3,000
- The total cost for leasing facility for the virtual reality arcade lounge – $70,000.
- The total cost for facility remodeling – $30,000.
- Other start-up expenses including stationery – $1000
- Phone and utility deposits – $3,500
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for Start-up inventory – $15,000
- The cost for Start-up inventory (food and drinks et al) – $10,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost for acquiring LED TVs, computers, Xbox stations, comfortable chairs, tables, Air Conditions, Shelve for stocking VR high-end headset like HTC’s Vive or the Oculus Rift, consoles, games and VR games accessories amongst others. – $50,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, snooker board, tables and chairs et al) – $4,000.
- The cost of Launching a Website – $600
- The cost for our grand opening party – $15,000
- Miscellaneous – $5,000
We would need an estimate of three hundred and fifty thousand dollars ($350,000) to successfully launch a medium but standard and well – equipped virtual reality arcade lounge in the United States of America.
Generating Funds/Startup Capital for Woops Zone® Virtual Reality Lounge, LLC
Woops Zone® Virtual Reality Lounge, LLC will be owned and managed by Mr. Solomon Boston and his immediate family members. They are the sole financier of the business which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings and sale of his stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank (loan facility).
N.B: We have been able to generate about $100,000 (Personal savings $70,000 and soft loan from family members $30,000) and we are at the final stages of obtaining a loan facility of $250,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
Part of the plans we have in place to sustain Woops Zone® Virtual Reality Lounge, LLC is to ensure that we continue to make available a wide range of VR games, deliver quality services, improvise on how to do things faster and cheaper. We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.
From our findings, another factor that kills new business such as ours is financial leakages. In order to plug financial leakages, the management of Woops Zone® Virtual Reality Lounge, LLC adopted the use of payment machine and accounting software to run the business.
Woops Zone® Virtual Reality Lounge, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Acquiring facility and remodeling the facility to fit into a standard virtual reality arcade lounge: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Packaging and Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed VR headsets, consoles, games and accessories, electronic appliances, office appliances and suppliers: In progress
- Creating Official Website for the Company: Completed
- Creating Awareness for the business both online and in the neighborhood: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress