Laser Tag Facility SWOT Analysis

Laser tag facilities are great sources of entertainment for people of all ages. One of the foremost rents for these types of businesses is that they are able to generate highly predictable streams of revenue on a weekly basis from facility usage. Additionally, these businesses often generate ancillary streams of income from the sale of food and beverages on site. Given the low cost nature of playing laser tag, the business is typically able to remain profitable and cash flow positive even during times of economic recession. The low-cost nature of this entertainment allows most families to afford trips to laser tag facilities at all times. The startup cost associated with these types of businesses can range greatly, but a median of the startup cost is usually around $100,000. These businesses generate gross margins of 90% to 95% on all facility usage fees and gross margins of around 75% on all food and beverage sales. These businesses also have the ability to generate substantial additional streams of revenue by hosting large-scale parties for both children and adults.

As it relates to weaknesses, laser tag facilities do have high operating costs. A large-scale facility is typically needed in order to provide users with a large space in order to play laser tag. The utility cost of these businesses is also high. One of the other large expenses that is normally associated with these is a businesses is liability insurance given the fact that people are going to be engaging in a very physical activity in a confined space. It is imperative that an entrepreneur that starts his business hire a qualified attorney so that waivers are signed by each and every participant. This is yet again another expense is associated with the operation of this business.

For opportunities, most laser tag facilities simply expand by establishing an additional location outside of the initial target market. One of the other ways of these businesses grow is by focusing heavily on hosting large-scale events including children’s parties, corporate teamwork events, and other large-scale gatherings. Many of these businesses can further expand by increasing the number of entertainment installations on site including arcade games.

As it pertains to threats, there’s really nothing that is going to impact the way that a laser tag facility operates moving forward. Within any given market there are usually only a handful of competitors that provide a similar entertainment experience to the general public. Additionally, even during times of economic recession – the low pricing point for admission as well as for the sale of food and beverages – allows most people continue to afford this form of entertainment.

A laser tag facility can be a highly lucrative small business enterprise for an entrepreneur that is familiar with the operating facets. The high gross margins coupled with the economic stability of these businesses make some strong candidates for financing from a financial institution.

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