So you want to start an escape room business.
Right off the bat, that’s an excellent idea.
Sure, the COVID-19 pandemic has had a significant impact on the escape room industry.
However, it is rebounding stronger than ever and is predicted to expand even more in the years ahead.
Why?
More and more folks seek actual, “genuine” engagement after a period of physical separation from others.
So now is an excellent time to develop and launch your escape room business.
You might already have your ideal escape room game design and are dead set on launching your own business.
But to be successful, you’ll still need solid planning and the right strategy.
The steps outlined below will help you effectively launch your new escape room business.
Let’s get going!
What Exactly Is An Escape Room Business Anyway?
Escape rooms are a popular pastime that is usually enjoyed by a group of people.
The participants are trapped in a room that represents a closed location (i.e., pirate ship, prison, castle, tomb, faraway planet, etc.).
They must work together to uncover and solve the riddles that will allow them to escape in a limited amount of time.
An escape room allows everyone to share an interactive and unforgettable moment via introspection, collaboration, creativity, and fun.
As the proprietor of an escape room business, it is your responsibility to manage it legally.
Related Reading: How To Think Outside The Box – Let’s Find Out Here.
How To Start An Escape Room Business: Your Comprehensive Guide
Before digging into how to start an escape room business, you must first determine whether you are dedicated to the demands of running a full-time operation.
Will this merely be a pastime for you?
Limitless Escape Games’ Michael Hill warns, “A business isn’t a pastime.” “If you want to make a hustle out of this, you have to put everything into it.”
Of course, this should not inhibit you from enjoying it.
Or that you shouldn’t invest time, effort, and passion into the design of your room and game.
After all, the quality of your escape room games determines the success of your business.
However, your responsibilities as a business owner will take up the majority of your time.
You’ll spend a lot of time dealing with stuff you never imagined, especially early on when you can’t afford to hire more people.
You’ll take on the jobs of administrator, customer service representative, marketing, handyman, and the janitor (those bathrooms won’t clean themselves!).
It’s critical that you commit to investing the time, effort, and money required to start, run and grow a successful escape room business when you make your final decision.
You’ve tried a couple of escape games, and you can’t stop thinking about them.
So now you’re going to try your hand at running your own escape room business.
That’s not an exclusive experience, you know.
Almost all escape room owners got into the industry after having a good room escape experience.
But where do you begin now that you know what you want to do?
Right here:
Do Some Market Research
It’s crucial to determine whether there’s enough demand for escape rooms in your area before committing to creating your own escape room business.
You’ll have a more challenging time sustaining the business’ profitability if the market isn’t accomodating enough.
Folks who enjoy interactive experiences (like amusement park goers) who would rather have these experiences than go shopping are the ideal target market for your escape room business.
Coaches and other business owners who prefer to provide team-building or merely enjoyable experiences may find escape rooms appealing too.
You might be shocked to learn that over 20% of escape room customers are business people.
So if your neighborhood has a lot of companies, it makes sense to start an escape room business.
Join your local escape room community to find out what’s up!
Write A Business Plan On How To Start An Escape Room Business
It’s imperative that you don’t glaze over this part.
The following are the key reasons why you should prepare an escape room business plan:
- An escape room business plan could help you fill in gaps you might otherwise overlook. You may not even realize what all your questions are at this point, but as you work through your plan, they will become clearer.
- Investors and lenders would expect to see your business plan before considering funding your business if you don’t have enough capital. The more detailed and well-written your business plan is, the more likely they will want to collaborate with you.
- If you’re collaborating with others, your business plan will aid you in explaining the project and ensure that everyone is on the same page.
- Taking the time to write out all of the specifics of your business helps ensure that you are 100% committed to starting and running your own company.
- Before your business officially launches, your business plan will allow you to predict how it will run.
You may already be aware of the advantages of having a business plan as an entrepreneur.
However, reading over the key reasons why you need one will help you remember to include important details when you’re putting one together.
Now in this part, I’ll answer some of the questions you might have right now:
How will you make money as an escape room business owner?
Customers pay a participation fee to play an escape room game, which is how an escape room business makes money.
Again, an escape room is a first-person live-action adventure experience where players are trapped in a room.
They must locate clues and solve puzzles to escape within the time limit.
You will charge an admission fee for this event.
Why would people pay for your escape room games?
Your escape room business will have a theme and gameplay that will be wholly unique.
Customers will pay you for an experience that only you can provide.
How much can you charge your customers?
For a one-hour game, most games cost $25 to $30 per person.
Larger venues normally only allow 12 players at a time.
In smaller locations, games are frequently limited to no more than six participants.
The more elaborate your games are, the more you can charge.
What are the expenses of starting an escape room business?
Launching an escape room business can cost anywhere from $7,000 to $30,000.
It depends on the location, the cost of rent, and the sophistication of the room design.
Among the startup fees are a business license and business insurance.
Another is props and equipment.
Some escape game rooms have extravagant costumes and set designs with laser lights, but others keep their sets pretty modest.
What are the recurring costs of running an escape room business?
The most significant expenses are rent, utilities, and personnel salaries.
Replacement of equipment and props as needed is another continuous expense, the cost of which is determined by the complexity of your escape room’s design.
Website upkeep with instructional information about escape room gaming and promotional advertising are other essential costs.
How come?
Well, this sort of business is still relatively new, and many people are still unfamiliar with how escape room games function.
What do profit margins for an escape room business look like?
The escape room industry can be tremendously lucrative.
Escape Expert, for example, began in Dallas in February 2015 and now earns around $70,000 per month.
Likewise, the proprietor of Puzzle Break, another famous escape room business, began with only $7000 in 2013 and had a projected annual income of $600,000 less than two years later!
How can you make your escape room business more profitable?
The greatest method to increase the profitability of your escape room business is to launch multiple rooms with multiple games.
Because escape room games aren’t copyrighted yet, you can still use and expand on the concepts of those who have already succeeded with their escape room businesses.
The more participatory your escape room is, the more fun the players will have and the more likely they will tell their friends about it.
The level of difficulty should be high enough that not every team will be successful in escaping.
Printing t-shirts with your company logo to offer memorable awards for successful escapees can be a low-cost yet effective form of marketing.
Do you prefer that players make reservations in advance, or do you want to accommodate as many walk-ins as possible?
Let’s say you want to concentrate on walk-in players.
Then you should select a site near a shopping mall or other entertainment areas.
Why?
There is a higher likelihood of people looking for an interesting and fun experience passing by and seeing your business.
These locations, however, come with a higher rent.
Similarly, retail properties, particularly those on the street in popular areas or in shopping malls/centers, are more expensive.
Offices have reduced rental costs and are often accessible to organizations and enterprises, as well as public transportation, making it easier for them to arrange team-building events with you.
Rental expenses for industrial properties are also lower.
These, on the other hand, tend to be in less convenient areas with fewer public transportation alternatives, making them less accessible to clients.
What should you name your escape room business?
Obviously, picking the correct brand name is crucial.
Choose a memorable brand name that complements your concept if at all possible. Please consider the following factors while selecting a brand name:
- Its availability within state and federal trademark records
- Its web domain availability
- Its available handles on social media platforms
What if you’ve never written an escape room business plan?
It’s perfectly alright if you’ve never drafted a business plan before.
There are materials and templates online to assist you in writing one.
If you’re in the US, SCORE, a nonprofit group “committed to helping small businesses get off the ground, expand, and achieve their goals via education and mentorship,” can be of assistance.
They can teach you how to start an escape room business if you need more guidance beyond this article.
The business plan template from SCORE is incredibly comprehensive and simple to use.
The executive summary is the last thing you’ll write and the most significant part of your business plan.
The first page that readers will encounter is this executive summary.
It’s merely a condensed version of your entire business plan, with key aspects highlighted in a few paragraphs.
Whether you seek advice from a mentor or go through it alone, you’ll find that having a full and comprehensive business plan in place before you start can make the process of starting your own escape room business much breezier.
Form A Legal Entity
You can establish this business as a sole proprietorship if you want to do it all by yourself.
It will be less expensive than forming a corporation and need less paperwork.
However, starting your business as an LLC (Limited Liability Company) or a corporation is generally recommended.
This way, you’ll have appropriate legal protection as an individual in the event of possible issues.
What kind of issues am I talking about?
For one, you’ll have a solution if ever your escape room business goes into debt.
Before you can legally run your business, you’ll need to register it for a number of state and federal taxes.
You may have multiple alternatives for registering your company for tax purposes, depending on which business structure you’ve created.
Please check your state’s tax laws for any unique taxes that may apply to your escape room business.
Register For Taxes and Obtain The Required Permits and Licenses
Remember, legal requirements for permits and licenses may differ based on your region.
So if you’re in the United States, consult the SBA’s website on state permits and licenses or your local trade organizations to make sure you’re obtaining the necessary info.
You’ll want to consult with the clerk’s office in your county or town.
Failure to obtain the necessary permits and licenses can result in a variety of legal concerns, including the possibility of your company being shut down in the worst-case scenario.
Most states will require you to obtain a business license, as well as a Certificate of Occupancy (CO).
If you rent a space, the landlord is usually responsible for obtaining this paperwork.
Still, please check with your landlord to see if they have or can obtain one.
In the event of extensive remodeling, a new CO may be required (which is common in designing your escape room).
If you intend to buy a property, you will be responsible for getting a legal Certificate of Occupancy from the local government.
Before you can start doing business, you’ll also need to register for a couple of state and federal taxes.
Please apply for an EIN in order to register for taxes.
Don’t worry; it’s straightforward and completely free.
Depending on which business model you choose, you may have different taxation options for your company.
For instance, some LLCs may benefit from being taxed as an S corporation (S corp).
Related Reading: Advantages & Disadvantages Of A Corporation – Read More Here.
Get Your Business Insured
Before you can legally start an escape room business in most parts of the United States, you’ll need to be insured.
Even if insurance is not required by law, the proper business insurance plans can go a long way toward safeguarding you and your business.
Even your partners will be protected in the event of accidents or losses.
You should at least obtain a General Liability and Workers’ Compensation Insurance if you’re going to hire folks to work for you.
Open A Business Bank Account and Credit Card
Personal asset protection necessitates the use of separate business banking and credit accounts.
Your personal assets (your house, car, and other valuables) are at stake when your personal and business accounts are intermingled.
This is known as piercing your corporate veil in commercial law.
Learning how to create corporate credit can also help you secure credit cards and other financings in your company’s name, lower interest rates, and higher credit lines.
Opening Net 30 Accounts
You can use Net 30 accounts to establish and grow credit for businesses as well as boost cash flow.
A net 30 account allows companies to purchase items and pay for them in full within a 30-day period.
The major commercial credit bureaus receive reports from several net 30 credit providers (Experian Business, Dun & Bradstreet, and Equifax Business Credit).
This is how companies establish company credit in order to obtain credit cards and other lines of credit.
Take Care of The Financing
A “How To Start An Escape Room Business” article can’t be complete without addressing the issue of money.
Let’s go over some of the expenses you’ll face when starting and running an escape room business before we get into how to source the money.
One-Time Costs That You’ll Incur When Starting An Escape Room Business
- If you intend on buying a property for your business, you’ll have to pay the price for its acquisition.
- Outfitting your place of business with room partitions, toilers, electricals for lighting and internet, flooring, painting, HVAC, and possibly a kitchen
- Security system
- Advertising for hiring staff members
- Legal costs involved in establishing your business entity
- Reviewing agreements (including lease agreements)
- Permits and clearances
- Furniture like a reception table and seating for customers
- Website setup and maintenance
- Consultations with game designers, prop suppliers and set designers
- Props and decorations
- Logo and marketing materials (ex., Posters, shirts, flyers, social media advertising, and partner site collaborations)
- Readymade props and off-the-shelf puzzles from suppliers
- Contractors for electricals and paint jobs
- If you’re planning to be a franchisee, you’ll have to pay the upfront franchise fee.
Recurring Expenses For Running An Escape Room Business
- Rent
- Salaries of employees
- Insurance premiums
- Subscription fees for services (accounting system, staff rostering system, etc.)
- Advertising expenses
- Utility bills for your phone, electricity, and internet
- Consumable items like stationery, toilet paper, complimentary snacks, cleaning supplies, and hand soaps
- Merchant fees for card payments
- Prop maintenance, replacements, and revamping decorations
- Commissions for partner sites
Whew, that’s a lot you have to pay for.
Now, let’s figure out where you can source the funds you’ll need.
Self-financing
When it comes to starting your own escape room business, investing your own money gives you the most freedom.
This could entail refinancing your home to raise funds at the lowest possible interest rate.
On the other hand, it’s unlikely that you’ll be able to raise all of the funds you’ll need from your own funds.
Informal Financing
You can ask your relatives and friends for financial assistance.
This is the ideal source of funding, aside from your own finances, because you have personal connections with your investors.
There should be the same level of desire for profitability that formal investors would have.
Formal Financing
Debt Financing
This is where you apply for a loan or a line of credit from a bank or other financial organization.
This will be a completely formal meeting in which you will be asked for your business plan and scrutinized on various elements of your company.
The financial institution will only grant you a fraction of the money you need.
You may also be forced to provide personal guarantees or mortgages on any assets you possess.
The biggest benefit of this type of funding is that you keep total control of your company.
The biggest downside is that the loan must be repaid on a pre-determined schedule, with interest.
If you fail to make payments on time, the bank may confiscate your business assets.
Government Financing
Many governments, whether national/federal, state, or local/municipal, may provide loan programs, grants, or incentives to help small enterprises.
In comparison to traditional bank loans, these types of loans may have less stringent criteria and other benefits (such as interest subvention/subsidies or the absence of a personal guarantee).
Equity Financing
This is when someone offers you money in return for a piece of the company.
The stake they hold will be determined by how much they contribute and whether or not they will help you set up and operate the business.
They can also choose to merely contribute the funds, leaving the management to you.
As you might expect, the biggest benefit is that there is no payback timetable to adhere to.
The biggest pitfall is that you will have to split profits with your partner and may also have to share managerial control.
This reduces your freedom in starting and running your escape room business.
Related Reading: Mind Of An Entrepreneur – Get The Sneak Peek Here.
Settle On A Location For Your Escape Room Business
If you want to attract more corporate clients (team-building events and office parties), you’ll need a site in a commercial area that is convenient and easy to find.
If you want to attract a large number of walk-in players, look for a location near a retail complex or other entertainment venues.
As previously stated, this will result in higher rent rates.
The Common Characteristics of An Escape Room Business Location
Some of these characteristics might help you find a location with lower rent rates:
- It is not imperative that your escape room business has access from the main door of the building.
- Escape rooms don’t need to be at street level.
- It can be in the basement of the building. This might even add to the business’ appeal if you work it into your theme (crypt, tomb, etc.)
- It does not have to be found on the main street or high street.
- Escape rooms do not need windows.
- It does not have to come furnished. You’re going to have to set up your escape games from scratch anyway. An empty space would actually benefit you in this case.
You will want your escape room business to be accessible by public transport and easily reached on foot.
You should also consider whether there’s low-cost or free parking around the area if folks have to drive to your location.
Design Your Escape Room Games
Escape room design is likely the most crucial stage in your planning process.
Your escape room game is the primary (if not the only) selling point for your brand.
Your escape room design could either set you apart from the competition or drive it to the ground.
Most escape room businesses have a classic three-act structure.
The game begins slowly with relatively simple puzzles in the first act (and prologue), and the riddles become more complex with faster time constraints in the subsequent acts.
When planning an escape room, think about how long you want the game to last on average.
The majority of escape rooms run 45 to 60 minutes, although younger teens and youngsters will get over it within 30 minutes.
The more participants you can fit into a shorter game, the better (which will translate into higher revenue).
But, if the game is too short, you will receive negative feedback and fewer repeat consumers. It’s critical to strike the correct balance here.
Don’t overlook the significance of a good story!
The storyline of the escape room should be more than simply an introduction to the puzzles.
It should serve as a substructure for the rest of the game and give an overall tone and atmosphere.
Escape Room Themes
You’re going to have to settle on a theme.
It’s a crucial step in creating your own Escape Room.
Here is the research I recommend you look into.
According to Scott Nicholson’s research, these are the most prominent Escape Room themes utilized around the world, based on Peeking Behind the Locked Door: A Survey of Escape Room Businesses:
- Modern Era (2000-2015)
- Period (1700-2000)
- Horror
- Fantasy
- Science/Laboratory
- Abstract
- Future/Technological
- Military
- Toy Room
- Cartoon/Anime
- Steampunk
- Seasonal (Christmas, Halloween, Easter, etc.)
Do you want to be different and take chances?
Or would you rather go with a tried and true option?
Check out the competition and inquire about their plans.
Opening two futuristic rooms in the same city at the same time would not be ideal and entirely avoidable.
Escape Puzzles
Your puzzles must be unique while still connected to one another.
Because Escape Rooms are designed for groups, it’s a good idea to include everyone in the puzzle-solving process.
Here are some examples of Escape Room puzzles:
- Four-digit combo lock puzzle
- Hidden messages puzzle
- Hidden objects puzzle
- Blacklight puzzle
- Magnetic switch puzzle
- Simultaneous switch puzzle
- Sound puzzle
- Memory puzzle
- Trivia puzzle
Prop Arrangement Scheme
For future reference, picture the placement of all furniture, objects, and decorations in your space at this time.
Installation
Ensure that your puzzles, particularly the electrical installation, are completed by licensed personnel.
This could cost you your company or possibly your life.
Audio and Video Installation
The more senses involved, the greater the escape room experience for your customers.
It’s also a good idea for customers to begin their experience as soon as they walk in.
Consider audio and video in the reception area.
Once guests enter your Escape Room, you want them to experience a new atmosphere.
Music Licensing
Permission from the composer or license holder is required to play music in a business setting.
A “blanket” license, which allows a business to play music owned by a large number of artists and recording studios, is typically available.
Performance Rights Organizations, such as BMI or ASCAP, can provide such rights.
Inventing Your Own Games v.s. Buying Off The Shelf
Making your own games allows you a lot of flexibility in terms of theme and puzzles.
It’s also less expensive because you’re the one doing the work.
However, developing and building a game from scratch takes significantly longer than buying one off the market.
DIY escape rooms can take months, if not years, to plan and construct.
After the room is completed, there is a lot of work to do to tune the puzzles, props, and decoration so that the room runs efficiently, is enjoyable for clients, and is durable enough to sustain repeated usage.
The final room for an off-the-shelf game can look much more polished, and the decor and props can look much more realistic and impressive.
For example, walls made of fiberglass look like real stone rather than the DIY version of using stone wallpaper.
Off-the-shelf games have also been tried, tested, and developed, giving you greater confidence that your visitors will love the game.
Build Your Digital Infrastructure
Even if your escape room is a physical location, don’t overlook the value of having a web presence.
Make sure your website is both polished and functional.
These days, website builders such as Wix or Weebly are economical and simple to use, and constructing a WordPress-based site is also easier than ever.
There’s no excuse not to have a well-designed and effective website now that you don’t need to pay a professional web developer and designer.
In this current age of social media, it’s also a good idea to have a presence on the social media networks that your target audience uses.
If you’re targeting a younger demographic, for example, you should establish a strong Instagram, Facebook, and Twitter presence. Again, thorough market research will be pretty beneficial.
Remember, your social media profiles are not a substitute for a professional website.
Also, make booking your escape room as simple as possible for your target visitors, both on your website and through social media interactions.
Robust escape booking software can assist in this regard, allowing guests to simply book your escape room while also allowing you to conveniently track bookings and schedules to avoid double bookings and no-shows.
Create a powerful brand with a memorable logo, to begin with.
This can help your company stand out from the competition and make it easier for potential customers to recognize and remember your brand.
While your escape room marketing plan is a complex subject, here are some pointers to consider:
- Social networking is an excellent approach to interacting with your target audience. To get the word out and establish brand awareness for your escape room, use both organic and paid social media marketing initiatives (especially influencer marketing).
- Make your Google Maps SEO stronger. Because “near me” and location-based searches are becoming the major way consumers learn about local businesses, this is critical for an escape room business targeting a local audience. This may be accomplished in four easy steps:
- Make a claim on your Google My Business listing and verify it.
- Improve your listing. Focus on giving your target visitors thorough and accurate information. Please don’t forget to include well-taken photos and images of your escape room.
- List your escape room on relevant internet business directories to increase local citations.
- Increase the number of (good) reviews left by your customers, particularly on Google Maps/Google My Business, but also on other relevant review sites and platforms.
- Cross-promote by collaborating with other businesses. Collaboration with other escape room providers might also be beneficial to your company. Visitors are unlikely to play the same escape room game often, so you can provide new experiences at your competitor’s and vice versa.
- Periodically renew your games. Because most escape games are only played once by each player, it’s critical to keep your games fresh and innovative if you want to secure repeat business.
How Do You Keep Your Customers Coming Back?
Unlike other competing businesses, collaborating with other escape room owners to provide mutual referrals benefits everyone involved, including clients looking for new gaming experiences.
Post-game surveys are a great method to collect vital feedback from your consumers about their experiences and how your game may be improved for future players.
Because the majority of clues are discovered during the game, each participant only plays each escape game once.
It is vital to produce and present fresh games in order to succeed in obtaining recurring business.
Offer Groupons and Discounts
While Groupon and other bargain sites enhance your escape room’s profile, their price structure does not leave you with much profit after discounts and commissions are taken into account.
It’s an excellent alternative to consider for brief periods of time (e.g., a few months a year) or during the launch stage of your business.
Why?
Groupon and similar sites have enormous databases and access to many folks who may not have heard of you or booked with you otherwise.
Long-term use may not be economically viable, as you’ll end up with full-priced potential consumers instead of those that took advantage of the Groupon bargain.
You’ll also want to train your staff to offer price matching for these discounts so you can take direct bookings and avoid Groupon commissions.
You can either limit use to non-busy times (e.g., Monday through Thursday) or charge a fee during busy times (e.g., Friday – Sunday).
You’ll also need to make sure that the price you set (after discounts and commissions) is high enough to cover your staffing costs and earn a profit.
Set Up Your Phone System
Getting a business phone is one of the most effective strategies to keep your personal and professional lives distinct and private.
That isn’t the only advantage; it also aids in the automation of your organization.
It provides respectability to your company and makes it easier for potential consumers to locate and contact you.
Hire and Train Your Staff
Depending on their expertise and ability, some members of your team, such as your manager or essential personnel, may be able to start working right away.
They can start answering emails and phone calls and conduct any scheduled games.
In terms of game masters, you’ll want to hire people who have worked in customer service and, ideally, at least one person who has worked as a game master.
These candidates may be harder to find, but they should take priority.
Tasks of An Escape Room Game Master
You should train your game master to:
- Be the receptionist (welcoming players, checking and making reservations, answering phone calls and emails)
- Be the game master (setting up and operating the games)
- Troubleshoot any breakages or other issues that occur on the site, as they may be the only person rostered during non-busy periods.
These are their duties:
- On arrival, check the customer’s reservations and collect any outstanding payments or scan the voucher if necessary.
- Get customers to sign waivers and check-in.
- Instruct clients on the assignment before entering the escape room.
- Keep track of the participants throughout the game.
- Communicate with the players, whether to provide a hint or to warn them that something should or should not be utilized in a certain way.
- Fix any props, riddles, or other issues that clients may have.
- Deal with those who are rowdy or intoxicated.
- They must remain calm in the event of an emergency (such as the power going out or a piece of the game malfunctioning) and escort the players out of the escape room.
Print Out Operational Documents and Manuals
You can collaborate with your employees to design a game master handbook and training program for your escape room if they have previous game master experience.
When you recruit more game masters, the guidebook and training program can be used as a guide.
It should also include instructions for game masters on how to follow scripts, manage an escape room and assist clients, solve problems, answer phones, and clean, among other things.
Email templates should be prepared to respond to common email queries and booking requests.
Handle Special Requests
If you have a manager, they will be the point of contact for staff if any unique demands arise from group or corporate bookings.
If you are unable to fulfill a specific request, you must inform the group prior to the booking date.
Related Reading: How To Start Something New – Find Out Now!
Final Thoughts On How To Start An Escape Room Business
Starting an escape room business might be a great way to make money, especially if you enjoy playing interactive games.
It has a minimal entry barrier and is an excellent business for creative folks who want to build puzzles and games.
Now, you have a clear roadmap on how to start an escape room business successfully if you follow the steps I’ve outlined above.
No matter how crisp and clear the “rules” are, some folks may be downright haphazard. It is vital that you plan, develop, and construct it correctly.
I’ve seen far too many wannabe escape room business owners who have played a few (or many) escape rooms, gotten hooked, and then decided to take the plunge without preparations.
Several enterprises have failed and closed their doors because of these rash decisions.
Do not fall into this category; instead, plan ahead! It will be the factor that allows you to dominate the local escape room industry.
Best of luck with your escape room business dream!
