Traps and Pitfalls
On this page are descriptions of various syndromes that we have observed in people setting up Laser Tag centres which often lead to some sort of financial difficulties. A lot of the following happen in all businesses but Laser Tag is a business which is about entertainment and fun and the fun can be particularly blinding at times.
Overconfidence – This is the classic syndrome that will affect how you read this page and how you project its relevance onto yourself. It is very easy to acknowledge the following and assume that you have it all catered for and that it does not apply to you. Well only time will tell but there is absolutely no harm in reconsidering it again and again as diligence can never harm you.
Budgets and schedules – Realism is essential when planning setting up. If the budget is tight and the site needs to open urgently in order to start earning revenue to pay off setting up debts and rent and staff and the owner wants the site to be the best in the world but on a shoestring budget, it is not good. If anything goes wrong at all and the budget for setting up allows for only 8 weeks and it takes 12 weeks then costs will, very likely increase by as much as 50%, because unpredicted delays often have knock-on effects which cause consequential loss on multiple fronts. For example – the opening will be delayed by 4 weeks causing the loss of 4 weeks revenue. Unless there is spare cash, the marketing budget may be eaten into and the result will be little or no post opening promotion and the operation will be chasing its tail from the beginning. The site may well spiral down and you will be likely to have to close before you get a good shot at running your Centre in the way you hoped you would.
Debt – Whilst debt is an essential part of business, too much debt can be crippling. If you finance the whole project with debt because you have not got the funds yourself and you make any errors in your projections or anything unexpected happens in the setting-up then it can kill your business. If you are funding everything with debt then you really need a reserve of your own to back it up. Lenders like you to exceed expectations and if a problem arises you are covered. If you are not covered and need to go back to borrow more then they can really pile on the pressure which can sometimes be just too much. If you have no colateral then they might just pull the plug.
Low bids and low pay – accepting construction bids which are too low and paying workers too little can really backfire. It is worth having a good grasp of costs before accepting bids. (Have a look at our Cost Caculator to see guestimates for different scenarios and different countries) So much depends on schedules and the contractor that quotes the lowest could very easily be vulnerable if they have underestimated the job. Schedule related penalties can also backfire where the job becomes no longer viable for the contractor and they prioritise other work where the profit is more of a certainty. “It is unwise to pay too much, but it is more unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you can lose everything if what you bought is unable to do what you bought it to do. The common law of business balance prohibits paying a little and getting a lot. It can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better” John Ruskin (1819 – 1900)
Tiredness and stress – If the same staff are used to construct the Lasertag centre as those who run it they are already exhausted just as the site is ready to open. This is not a good time for them to be trained and they are not in the best form to supply the customer service that a new centre requires of its staff. They have already been stressed by the pressure of trying to finish on time, added the stress of being newly open and are trying to provide a refined, professional appearance at a time when first impressions are being made. Couple this stress with the tiredness and it is not a good recipe for success.
Manpower shortage and unskilled labour – DarkLight Construction Supervisors specify that all contracted labour are experienced and carry their own tools. This is because unskilled labour can slow the progress of skilled labour and can also be hazardous when unfamiliar with power tools and untrained in Health and Safety at work . Inexperienced workers require much supervision else too often they are not actually working and are most probably distracting another worker. Continual borrowing and searching for your own tools, as simple as an extension lead, is another hindrance to the progress of a job. There are no cost savings to be made when labour is undermotivated or unused.
Local authorities – City planners, health and safety officers and building controllers can completely ruin everything on a whim. So often has a fire officer prevented a LaserTag Center from opening on time due to a “different interpretation” of a specification. Often they will never have seen a Laser Tag Centre, let alone have dealt with setting one up. The importance of involving the city officers as early as possible and maintaining continuity by trying to deal with the same ones throughout the process can not be underestimated. Get as much as possible in writing and if there are any doubts about what things mean, clarify them.
Rush – When things are rushed, the chances of getting them right is reduced. Having said that, “everyday of delayed opening is one less day of revenue”. This is so true but It is worth being conscious of the fact that it is much more difficult to do things once your site is open and so whilst forcing your site open may solve your revenue problems, enough time should be factored in at the start.
Rent – As was touched on in Tasks this is the one constant overhead that never subsides through non busy periods unless you bring the landlord in as an investor. If you are going to pay a high rent then make sure the demographics and throughput will be able to support it. Since the arena is the most space consuming item, it is really worth going for enough ceiling height to enable multiple levels. The effective playing area is increased hugely so the footprint can be smaller allowing for the same number of players. To achieve an eqivalent quality of play you need about 50% more single level arena than multiple level.
The fine print disclaimer: inside this section you will find some guides, hints and tips aimed at helping you start your own DarkLight LaserTag center. These are not the only points to consider, just some of the main ones. Nothing in this advice is intended to be taken as a guarantee of success. You should at all times be prepared to seek additional advice and help from professionals such as architects, lawyers, accountants, etc.
You might now be thinking, “why are they trying to put me off when they could make a sale and let me discover this the hard way?” Well the answer is simple…too many lasertag centres close and almost all of them close as a result of the operator not having the resources and not being realistic enough about the above and it is not in anybody’s long term interests for them to close. This industry is and is currently recovering after the decline caused by a massively over-hyped boom in the early and mid-nineties. Back then, the formulas for success had not been formulated. A vast number of systems were sold on the back of hype, great colouration of the truth feeding mindless optimism, rather than success and honesty. Well we believe that the road to success in the lasertag industry is honesty, realism and pragmatism and whilst the honest, pragmatic, reality is perhaps not what perspective customers want to hear it will help them make up their minds much better as to whether becoming a lasertag operator is the right path for them and assuming they feel it is, it will prepare them much better for the tasks ahead.
It is very easy to be blindly optimistic and miss the fact that setting up a DarkLight center is a big project.