Amusement Demographics 101
By the Family Entertainment Center
Page 1, 2
To clearly determine your local market opportunity and the
potential of your project idea's profitability, the first step is looking
at the local demographics.
 The study and understanding of the demographic make-up of your market
opportunity can be a complex one. However, prior to really digging into
the specific data, and spending volumes of time there, you can do some
quick, general rule-of-thumb projections to at least get a start and some
degree of initial confidence, that yes this is an idea that could work.
The first step in analyzing the market population
is by age and household - and local drive-times. It is widely accepted
that the average distance people will travel in order to take their
children to a family fun center is 20 - 30 minutes maximum. There are
of course exceptions to this rule, for example, as you get out in to
less densely populated rural areas where people are already accustom
to 45 - 60 minute drives to get to the county retail corridor.
So, how many households and people are there in the targeted categories
for the project that are within a 20 - 30 minute drive time. For example,
if the project is a Childrens Entertainment Center (CEC's), targeting
parents with children from infant to 12 years old, how many families with
children in that age range are there with how many children?
Typically,
this information can be researched at the local Chamber of Commerce,
or Community Business Office. It may also be found on line at
your City/State's web site, or at the Federal Government's Statistical
web page www.fedstats.gov
You may also seek more
focused data from the targeted schools within your 20 - 30 minute
drive times by calling and asking for enrollment statistics from
these schools. Explain to them that you are looking to create
a "family-friendly" community fun center and
request this data to help build your business plan.
Once you have this base set of data collected, your next task is
to pull some basic financial projections off these numbers. We know
how many children there are within a 20 - 30 minute drive time,
now how can we find out what that equates to in gross revenue potential?
Latest data collected
by IAAPA indicates that on average, North American families will visit a
full-featured family amusement center 4.6 times per year. The
same data also indicates that the average dollar spent in a family
fun center is between $12 - $22 per visit, depending on your activity
mix.
Family Friendly |
| If your project plan is to build a Children's Entertainment
Center (CEC) you should get in the habit of presenting your
idea as family friendly. In many instances, the general population
connects Arcades with Family Entertainment Centers, or Fun
Centers, and thus the possible negative image of teenagers
hanging around their communities. We have run into this problem
on more than one occasion. Great locations have been found
and community hearings have taken place to get the appropriate
use permission with the local neighbors and businesses. Many
people come to these hearings to express their concerns
about you bringing an Arcade into their neighborhood. Very
tough battles have been fought to change the negative impressions
in the communities mind regarding a family fun center, and
in some cases communities have been able to get city council
to deny the use permits. Whether seeking permit permission
to build a CEC or FEC, you should position your project as
having a large degree of community value. You can do this
by including some amount of educational and developmental
content or programming, (classes, local community use plans, etc) and by clearly identifying who your
target market is and how you expect them to use your facility. |
From running this initial formula; Number of children within your target
age group x number of visits per year x average dollar per visit, you
should get an initial sense of whether this idea is feasible and at what
potential. If after running through this exercise you determine there
is revenue potential that could be worthy of your time and financial investment,
it is time to move on to a full Feasibility Study.
|
