9 Steps to Develop a Family Fun Center
By John Gerner
Page 1, 2
If you're thinking about developing a family entertainment
center, the following advice is for you. It's from my 20+ years of consulting
experience with new leisure attractions, and watching many who have gone
down the path you're looking at right now. One of the real benefits of
our industry is shared experience. We don't have to reinvent the wheel
when it comes to FECs. Sure, there are always improvements that can be
made to the concept, but it's a proven one with an established track record
that now spans decades. With that in mind...
First, look within yourself and think about why
you want to develop a FEC. If the main reason is to get rich, think again.
Although there's always the feeling that a clever new idea can lead to great
fortune, few in our business actually do get rich developing leisure attractions
and those that do probably didn't think they would when they started. If your
main reason is to take on the challenge of developing a thriving fun business
that could entertain thousands every year, then welcome, we need more like
you. Many FEC developers are actually buying themselves a job, and an enjoyable
one at that. There's nothing wrong with that. It's the motivation driving most
of the small businesses today in our country. The goal of being your boss,
doing something you enjoy, and hopefully building something of value that you
can pass on someday to others.
Second, you're going to need
money. Not all of it, that's what lending institutions like banks, help
with. But you're going to need what we call "seed money". If you're the
creative type that simply wants to conceptualize and not deal with money,
this is the time to begin finding a business partner. The leisure attractions
industry has benefited time and time again from pairing creative and
business types. I'm sure you've heard of Walt and Roy Disney.
How much seed money you're going to need is hard to say. I've been asked
if there is some way that a consultant can provide a "preliminary" feasibility
analysis that would help get this seed money. Sadly, the answer is no.
Any worthwhile feasibility report is going to take considerable time and
effort.
Think carefully about the general risk involved in developing a new business.
There are no guarantees and you will need to be comfortable with these
risks before you can seriously move forward.
Third, you should have a good idea of what type
of family entertainment center you want to develop. One type is not inherently
better than another; such as indoor versus outdoor or teen-oriented versus
children-oriented. This is the time to educate yourself as much as you can
about FECs. The Family Entertainment Center Directory is a good start, but
you should expand your education. In particular, you should visit as many family
entertainment centers as you can, and see first-hand what you like and don't
like. Soon, you should have a good idea of what you want to develop.
Fourth, you should also have a good idea where
you want to develop your family entertainment center. Ideally, you should have
a specific site in mind.
Fifth, you're very likely going to need a feasibility
study unless you have the financial resources to develop the project on your
own. That's because our industry, like most, has its own version of the golden
rule and it says "the one with the gold makes the rules". Lenders and other
investors want to see an objective, analytical report prepared by an expert
that evaluates the potential of your proposed type of FEC at your prospective
location. This effort might be divided into separate market and financial feasibility
studies, but typically it is done in a single report.
 Although you've paid for it, the feasibility study is not written directly
for you. It's written for prospective lenders and investors, and assumes they
have little if any knowledge of family entertainment center. That's why it
will often begin by describing the FEC concept, a topic you probably already
know much about.
The study will then likely identify the potential markets for your proposed
FEC, through distance rings, travel corridors, or other means. It may or may
not include tourists, depending on the location. It should present the size
of each market segment and its demographic characteristics. It should project
potential attendance by applying market penetration rates to these market segments,
influenced by the quality of these markets, competition, and the experience
of comparable FECs elsewhere.
The feasibility study should provide general physical recommendations to ensure
that the proposed FEC will physically be able to effectively service its expected
attendance. This study, however, does not design the FEC and should give the
designers flexibility.
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