If you grew up in the 1970s or 1980s, your hangout time with pals most certainly included hours spent in front of a Galaga or PAC-MAN game. For many of us, these arcade games evoke nostalgic sentiments, leaving us reminiscing about simpler times. The permanent stamp of video game culture on American society has grown both extremely identifiable and lucrative as current video games have excelled in complexity. The fusion of the ancient traditions that gave rise to video games with current devices that transport players to another dimension is particularly intriguing.
An arcade cabinet company combines the nostalgic ambiance of an arcade with a choice of current possibilities. Raw cabinets made to suit HDTVs and current gaming systems are available for purchase by consumers. Those with bigger incomes may buy old, refurbished video games or cabinets that already have new gaming software installed.
Follow these ten steps to start an arcade cabinet business:
Arcade Cabinet Business Planning
Make your Arcade Cabinet Company a Legal Entity.
Register your Arcade Cabinet Company for Taxation
Create a Business Bank Account and a Credit Card
Create an accounting system for your arcade cabinet business.
Get the Permits and Licenses You Need for Your Arcade Cabinet Business
Purchase Arcade Cabinet Business Insurance.
Define your Arcade Cabinet Company Brand.
Make a website for your arcade cabinet business.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. This basic guide to beginning an arcade cabinet business has been put up by us. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
Table of Contents
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting an arcade cabinet business?
While a storefront site is not required, you will need adequate room to work on many projects at once. If you don’t have enough square footage to set up a home office, your first priority should be to find a suitable location. After you have received a deposit, you must acquire all of the supplies required to construct the cabinets you want to sell. Photographs of finished works should be taken upon completion. These will be utilised for marketing materials and the development of your website. While your website does not have to cost tens of thousands of dollars, it must be helpful and allow clients to easily “create” their bespoke cabinet.
It is also suggested that you consult with a competent specialist to determine your company insurance requirements. Inform your agent that items will be distributed to clients, since many company plans prohibit coverage for products after the organisation is established.
What are the continuing costs of running an arcade cabinet business?
Rent and utilities, supplies, website upkeep, insurance, payroll expenditures, and marketing are all ongoing company expenses. Businesses that ship domestically and internationally should conduct thorough research on shipping costs and modify rates appropriately.
Because the gaming industry is always changing, it is critical for company owners to stay on top of new and developing trends. Owners are expected to commit to ongoing research and education, as well as to attend conferences and networking events as often as feasible.
Who is the intended audience?
For many years, arcade cabinet owners catered to a restricted group of people: older, richer customers prepared to spend top cash for the nostalgia effect. The return of the arcade, on the other hand, has transformed everything. Arcades are springing up around the nation. Most now include something for everyone, including gaming, food, and beverage choices. This broader target population enables new company owners to choose the target market that best matches the products and services they provide.
How does an arcade cabinet company earn money?
Each cabinet sold generates cash for arcade cabinet firms. The amount of money earned from the sale of each cabinet varies based on the circumstances of each order. Many people have had a lot of success selling DIY arcade cabinet kits. The cabinets are delivered in parts, with instructions for the client to follow, saving the company time and money.
How much money may you charge your customers?
Prices may vary depending on the goods. The average cost of a basic kit is $850. Upgraded kits including joysticks, buttons, encoder choices, trackballs, and LED inserts cost about $1,100. Most cabinet producers have extra choices for bespoke and pre-printed artwork, which may cost up to $400. Arcade cabinets with game software may cost anything from $1,500 to over $30,000.
How much money can an arcade cabinet company make?
If you sell one basic kit and two upgraded kits every month, you will earn more than $36,000 in gross yearly revenue.
How can you increase the profitability of your company?
Entrepreneurs that want to boost their yearly revenues may consider increasing their product and service offerings. Aside from whole cabinets, your website should provide basic components and adapters, a range of gaming software alternatives, and downloadable cabinet blueprints that customers can buy and print at home. Repair services and cabinet instals would also boost your company’s profitability.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your arcade cabinet company is sued, forming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
To run an arcade cabinet business, several state permissions and licences may be required. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
For information on local licences and permissions, visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Promote and Market an Arcade Cabinet Company
You must decide if you want to confine your services to the local community or sell on a national or worldwide scale when selecting your target market. Locally, you should start your marketing effort with personal visits to arcades, skating rinks, movie theatres, and pubs. Your marketing approach should include a social media presence as well as advertising in selected printed and online magazines.
These techniques will work if your market comprises both national and foreign customers, but you will need to examine which websites and periodicals are popular in each location you’re targeting. The American Amusement Machine Association (AAMA) is a great place to go for all of your gaming requirements.
How to Keep Customers Returning
Delivering outstanding service and a high-quality product that you back up with a guarantee can help you achieve the momentum you need to make a reputation for yourself in the gaming community. Remember that word spreads quickly, and consumer feedback may make or ruin a firm, especially in its early stages.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.