The business specializes in virtual reality gaming; it has been around since 2017 and become a favourite place for kids' birthday parties, family events, and corporate events. This is the only place of its kind in Surrey, located in a very popular mall with a separate entrance, allowing you to establish your independent operating hours in coordination with the landlord. The space is divided into three separate services: a virtual reality (VR) arena, a VR escape room and a VR Booth. The current minimum age for visitors is seven years old. The area is over 4300 square feet and made in a way that can be configured to accommodate new ideas to generate more revenue, to name a few: catering, animation, games for younger kids, decoration with balloons, face painting, old-style arcade machines, merchandise, etc. The company has years of excellent customer service, is trusted by the local community, and has established relationships with vendors, including possessing unique commercial licenses for the local market.
Things to keep in mind when considering purchasing this business:
Pros
Easy operation: if you are comfortable around computers, have problem-solving skills and know the way around people, you can run it;
For someone who is just starting their journey in entrepreneurship, you can learn all the aspects of having your own corporation and have mentorship from the previous owner for backup at the beginning.
The cost of this established business is way lower than the $250K in equipment cost needed to open something similar to this.
The business can be interesting for an experienced business owner who can bring over their expertise to create new revenue streams or to learn the concept and transfer it as an addition to their other business.
The company solely relied on word of mouth and local traffic to gain new customers, 60% of whom become loyal members, meaning it has a lot of room for improvement in marketing and online presence.
One employee can run it on a weekday and two on weekends. There are five part-time employees, ranging from 2 to 4 years of experience with the company. Training a new staff member takes about two weeks.
Cons
The lease is extended on a yearly basis. It has been like this for over seven years now; the current one expires in March 2025. The landlord is open to negotiating a longer term, but it will be more expensive than the yearly one. The annual term was preferred at the company's start-up to mitigate the risks before it could prove the economic model, and it just started to roll over time, becoming a routine practice. The sale price of the business takes into consideration the short-term lease, and the money spent on purchase can be returned in less than a year.
Currently, this business requires the owner's attention for around 16 hours per week. More revenue will require more input. The location has an office for comfortable operation.
_____________Revenue________Seller's Discretionary Earnings (SDE)
2019________$ 268,767___________$ 118,912
2020________$ 186,729___________$ 69,278
2021________$ 217,788___________$ 108,438
2022________$ 348,233___________$ 109,502
2023________$ 316,606___________$ 87,507
2024________$ 255,000___________$ 55,000 (projected based on 10 months into the fiscal year)
