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Need to fund your Gaming Lounge?

Published on 25th April 2019 - Last update on 1st July 2020

Gaming is big business. It is popular with a wide demographic that includes young professionals with plenty of disposable income, it has relatively low operating costs and it can mean a steady income.

But it is also a very fast-moving sector. The games that were once cutting-edge, and which would entice gamers into a gaming lounge can now be played on smartphones. To stay competitive, you need to offer the latest games, which can mean motion sensing, immersive technology, virtual reality - and investments of £25,000 or more for a single machine.

“I’ve loved gaming since I was a kid. I had some experience of running a bar, so it seemed like the perfect business to get into.”

You need to call on external funding to keep your business fresh, your games cutting-edge, and the gamers and your profits flowing in.

What costs do you need to cover?

To run a successful business you need to attract gamers away from successful competitors already operating in the space. This will probably mean having the latest games, situating your business in the right location, and making your bar or lounge more attractive as a leisure destination. Find high footfall premises, pay for shop fitting, arrange an alcohol license, gambling license, staff, suppliers - the list is a long one but, by getting the right type of funding for each purpose, you can keep the costs under control.  

“Setting up my business was a labour of love, but it took more than just labour - it took borrowing. Rangewell was able to help with that.”

What are the costs?

Setting up a gaming bar or lounge can mean high upfront costs. Of course, like any other business venture, getting the financial side will be crucial to success. So what do you need to make the most of your gaming lounge or e-sports venue?

Premises

The right premises in the right location are an essential foundation for a successful business. You need plenty of space to install machines - a cramped arcade atmosphere will not do for today’s customers unless you are looking for a consciously retro vibe.

The more space you have, the more machines you can install and the more profits you can generate, but don’t forget that half the fun of gaming is watching other players. You need room for spectators and for gamers waiting their turn on your showpiece machines.

The location is vital too. Younger gamers will not have their own transport. That means a town centre or mall location will be a must. You don’t need a ground floor - gamers are usually able to manage stairs, but you may need to think about wheelchair access.

Empty high streets might mean there are bargains to be had.

Leasing can be the simplest way to provide the premises you need, but you will still always be at the mercy of your landlord - which could mean rent increases and insecurity.

So, once you have established your business, you might want to think about buying your premises. A Commercial Mortgage could be a sound investment. Prices for buying a property will vary across the country but, whatever the price, a Commercial Mortgage helps you spread it over 20 years or more.

Fitting out

You can’t just move your machines into your new premises. Your customers may be enthusiasts, but they will still expect comfortable and stylish surroundings. Think contemporary cool rather than old-style flock walls and mahogany - but you could still spend £10,000 to fit out a lounge, and six-figure costs are not uncommon for a large lounge. It should be possible to get a loan which will help you refurbish and fit out your lounge.

Machines

Unless you are setting up a retro arcade, you need the latest machines and titles and the most on-trend games. To provide a range of machines, from coffee table-style consoles ideal for drinkers to activity games like boxing and golf swing simulators, will mean substantial investment. Add in a couple of high-end machines boasting the latest technology in excess of £200,000 for an average sized arcade.

Asset Finance includes solutions to let you buy outright or even lease the gaming equipment you need. With Hire Purchase, you are hiring your equipment until you’ve paid enough to purchase it outright. You’ll pay a deposit, plus fixed monthly repayments. When you’ve made all the repayments, your business will own the equipment outright, and everything from seating to your change machine can be covered by Asset Funding.

Leasing is the mainstay of the gaming industry because it makes it possible to bring in the latest games machines with no upfront cost and let them pay for themselves with the revenue they create.

You may want to bring in some old style equipment - nostalgia gaming is growing in popularity - and you can even set up Asset Finance to provide funding for used gaming equipment.

“You stand or fall by your games. I’d been open a month or two, and I saw we needed another big-draw game to drive revenue and footfall. With a bit of help form Rangewell, I had the latest setup from Namco installed. The game the whole community were talking about. The bar took off from the day it was put in.”

Food and Drink

Refreshments are essential in any gaming lounge, and alcohol will be part of a game-themed bar. Gamers can play for hours and need something to eat and drink. Your business needs to supply it to avoid them leaving. Food and drink will contribute at least 20–30% of your total revenue - and more if you are running a bar.

You will need to get licencing permission, to build and stock your bar and to provide toilets, which will take up valuable space, as well as need building work.

Again, Asset Finance can help with the equipment costs but an Unsecured Loan might be the simple way to get the installation work done.

Working Finance

Unfortunately, the costs don't just stop there. You will need trustworthy staff, especially if you are running a bar. You will need to deal with utility costs, council tax, maintenance and insurance.

These costs add up and will come in even if gamers don't. The solution can be Working Capital Finance. These are flexible, short-term loans designed to keep you afloat while you build your gaming business, and paid back as soon as your lounge or bar is generating sufficient revenue.

“You think it's just a matter of arranging a loan. You would need a big loan - and you would be paying more than you should for it. Rangewell can help by getting the right funding to cover each one of your needs.”

So how can you answer your funding needs?

Establishing a successful gaming lounge will require a sizable financial input but, with a sound business plan, you should be able to arrange the funding you need - if you call on us at Rangewell. Not only do we know all the lenders in the UK market who might be prepared to help, we even know the funding solutions that have been developed specifically for the gaming sector.

So if you're looking to source finance for gaming, call us to find the winning financial tactics for your gaming business.


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Richard Mitchell

Richard Mitchell

Content writer
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