Investing in an entertainment and gaming concept is not something you skipped without careful consideration. First, there are several formats, including:
- PC Gaming
- Console Gaming
That said, each of these types of stores has unique advantages and disadvantages. For example, you will typically see higher average annual incomes with a higher cost of goods (COG) with a combination of all three systems. With a PC concept, the initial investment is lower but sales volumes are generally not as high as a full-service gaming center.
To take a closer look at what you should consider before investing in a gaming franchise concept, carefully consider the following four factors:
1. Cost of Goods
Esports and COG retail do not really have a learning curve. If you follow the operations correctly, maintain the proper ordering process, maintain the game rotation and subscriptions, you can generally keep your COG at a constant level. At the end of the day, this can have a significant impact on your earnings account.
While you will have the opportunity to also offer packaged foods and drinks to your customers, the COGs on these are also constant as you should be able to maintain zero waste, one of the main factors in financial loss in restaurants.
One of the main points of discussion when we discuss Contender Esports is that it is not a complicated business if you follow our processes, procedures and operating systems. The operations are designed in such a way that it does not require skilled labor, and often times owners are able to monitor the business offsite.
3. Labor Costs
When it comes to talent, made to order concepts like Contender Esports do not need a team of 60 people. Our stores can generally operate with about 2 members of the team on shift at any given time.
From an operational point of view, you need to invest in staff when you open your site because you have to make sure to provide exceptional service and not try to work hard for the first 30 to 45 days. This gives you the opportunity to identify your staff's superstar talents and minimize stress levels.
4. Store Size
The investment, footprint and overhead are all smaller with a self serve concept. Most of our Contender Esports stores range from 1200-2000 square feet, and can easily be adjusted based on how many stations you would like to put in.
When you look at operating costs, from utilities to rentals, appliances, furniture and equipment, setting up is more appealing for a power concept with a small footprint. Comparatively, you do not need to invest so much capital to get your store operational, which means that you are on a better way to work in order to generate a return on investment (ROI) in a more pleasant time.
What You Do Not Know…
For someone who has just entered the entertainment and gaming industry, the first three elements of wisdom we would offer are:
- It's harder than you think
- It's not instant money
- You must have the right people
According to my experience, the top performing Esports owners are involved in the business, learning to know the day-to-day operational aspect of ownership of their property. Once they have gained this experience, they are better able to develop a work plan to put the right people in place, especially if they want to add new units. From there, franchises have the opportunity to grow their business in any way and by any means of their choice, whether to create a heritage investment or to invest in their local community.