Organized competitive video gaming or esports has continuously grown over the past years to become a global phenomenon. As the popularity of online computer and video gaming grew, so too did its following.
Today, esports competitions from all over the world are followed and watched by thousands of fans live and thousands more through online streaming. Major esports tournaments can be as avidly followed as regular sports events.
Thanks to the growth of esports, gaming centers have been seeing a resurgence in business. Esports venues, a similar concept to internet cafes, are also enjoying a rise in popularity.
If you are hoping to capitalize on the booming esports and gaming industry and open an internet cafè or a dedicated esports venue, you need to research and plan thoroughly.
It is vital that you understand the ins and outs of the business and have a complete plan first. In this article, we will help you with both.
Esports venues are similar to gaming centers in that they also offer memberships and hourly usage of high-end, gaming computers. For esports venues, though, that is only a secondary service.
Internet cafes are used primarily to browse the web. Esports venues exist mainly to serve as events facilities for hosting esports tournaments, rather than provide a place for people to use the internet.
Esports venues are also referred to as an esports arena or esports center. A defining feature of esports arenas are its tournament stages, where two esports teams can battle it out in front of spectators.
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Many venues that host esports competitions are multifunction arenas or coliseums. New venues dedicated to just esports are being built around the world in order to capitalize on the continuous popularity of esports and computer gaming in general.
This means esports center startups are a highly viable and potentially lucrative business venture. Esports center startups can tap into a developing market early and get a large client base.
Opening an internet café business is challenging. Opening an esports venue, which offers more services than internet cafes, can be double or triple the challenge.
Thus, it is important to ensure you consider all possible factors and scenarios before starting an esports venue business.
Here are some crucial factors to consider before opening an esports venue:
Going through the advantages and disadvantages of a potential business venture is also essential. Doing so allows you to be more prepared for both the good and the hard parts of running the business.
If you are aware of the possible problems you will face, you can make arrangements in advance to help you overcome them and ensure your business thrives.
Here are some of the pros and cons of running an esports center:
Writing a business plan allows you to go over each aspect of your future business and to plan ahead to better face certain challenges. Most importantly, you will need a well-crafted plan to win over investors and receive financing.
In the next sections, we will go over each part of your esports venue business plan and what it should include. Take note that this information serves as your guide — you may modify it to better prepare for your business venture.
The executive summary is the overview of your entire plan. This section summarizes all the key points of your document. It prepares the reader for all the information that will be discussed in greater depth as they go through your business plan.
The summary should be clear, concise, and enticing to read. Your readers should feel like they were able to get a good grasp of your plans and want to know more. This is especially important if you are giving out your business plan to potential investors.
Investors may decide on whether or not to finance your esports venue based on your summary alone. They may decide if they would keep on reading the rest of your plan after seeing what you included in your summary.
A typical summary for any startup business should include the following:
Since this section should concisely summarize your whole document, it is best to leave writing this for last. Once you’ve finished all succeeding sections of your business plan, you can go back to the summary and use the information and data to convey key points.
Use this section to describe your company and how you started. If you are an established business aiming to receive additional funding from investors, include your company history or origin in this section.
Here are a few questions to serve as your guide:
Be specific in explaining your business interests and company history. Make sure you include your business’s strengths or capabilities.
If you have any experts on your team, you can mention them here. Doing so would give you and your business more credibility, especially among potential investors.
Additionally, you may include an overview of the industry you are trying to enter, your goals, mission statement, and vision.
Esports venues have a host of services and product offerings. As such, it is important to distinguish your primary and additional services or products in your business plan.
The primary service is your core offering and the pillar of your business. For an esports venue, your primary service would likely be the dedicated esports competition services and gaming equipment.
Many esports venues offer monthly memberships, where members pay for a whole month or more to use all or selected esports facilities you offer, rather than pay per hour.
If you are planning on starting an esports venue but know the gaming community in your area is focused more on watching esports tournaments, rather than participating in it, your primary service can be exclusive access to esports tournaments and viewing parties.
Another option you can focus on as your primary service is using the esports tournament hall as a training facility for esports teams. Make sure to provide detailed descriptions of your primary products or services, including the prices, benefits to customers, and special features. Additionally, it is important to indicate your competitive advantage.
The additional products and services will be your supplementary sources of income. If you go through with running a dedicated esports venue, your additional or accompanying services will allow you to earn revenue on days when you don’t hold tournaments or viewing parties.
It is best to choose products and services that would complement your primary offering and make use of your existing facilities, like fast internet and wi-fi.
Here are some potential additional products and services you may offer:
After you have finalized your list of additional products and services, describe how each would impact your business. You can also explain how the services may attract more customers and encourage them to purchase your primary service.
The market analysis section is where you will describe your target market or target customers. This is where you will include any research about your target market’s reception to products and services similar to yours.
You will need to research the industries and fields related to esports, including video streaming, online gaming, console gaming, cyber security, and etc. Statistical data can help you determine who and where your target demographic is and what they look for in esports venues.
It is also essential to indicate what your target audience’s needs are, whether they are being met, and how your services may help. Knowing all this information would show potential investors that you are knowledgeable enough to form smart business projections.
This section should also include information about the business market or the industry. Describe how big the market share is and whether or not the industry is favorable for starting an esports center and why.
Investors would also appreciate a SWOT analysis identifying your business strengths, weaknesses, opportunities, and threats. It is also best to include a competitive analysis with any direct and indirect competitors. This would help you figure out how to make your company stand out from similar businesses.
Your goal in this section is to show the reader that you have a thorough understanding of both your target customer and the market you are planning to enter.
Marketing and advertising is crucial for startups. When creating your esports venue marketing and sales plan, you will need the data you gathered for the previous sections. You may need to reiterate some information for clarity and ease of reference.
Aside from indicating who your potential customers are, you should explain in detail how you plan to reach them. It is also important to identify and emphasize your business’s unique selling proposition.
For this section, you will also need to do in-depth research on the different marketing strategies and sales tactics. Certain strategies and tools produce better results when paired together or with specific products and services. Indicate short-term goals and marketing methods, as well as long-term ones.
Although esports is mainly an online and digital business, it is important to also consider other marketing options aside from using the internet.
There is a wide range of marketing strategies and tools you may implement, including:
Your marketing and sales plan should also include an analytics strategy. It is important that you track and analyze all potential and qualified leads. You should also indicate how you plan to convert these leads and how you would track the lead nurturing cycle.
The analytics strategy should also include the metrics, key performance indicators, and other factors you plan on using to measure the success of your marketing, sales, and overall business performance.
This section is also sometimes titled “Operations Plan” or “Operating Plan.” All three names are accepted and mean the same thing.
Describe your future or ideal day-to-day operations under this section. Some salient points to mention include the following:
It is also important to include existing personnel here. You should indicate who they are, why they were hired, and the jobs they would perform day-to-day.
The Organization and Management section can seem similar to the Operations Plan section. One of the main differences is instead of introducing your employees, you should introduce the management team.
Moreover, this section should include a detailed explanation of your organizational structure. Start from the very top and work your way down to the rank-and-file employees. Clearly indicate who runs the company, their daily responsibilities, and more.
List down the members of your board of directors, advisors, accountants, lawyers, and consultants. These are the people who would have a say in how you run and market the property.
It is also vital to include your planned esports center’s legal structure. Business people who may be interested in helping you fund your startup will want to be assured that you gave serious thought to your daily operations.
This is the section where you should go into detail about your funding. If you are writing your business plan in hopes of securing investor funding, you need to be as detailed as possible.
Explain clearly and concisely how much funding you need and why. It would be best to include a detailed list of equipment and other requirements you plan on getting using the requested funds. Don’t forget to include the average cost of each equipment or requirement, as well.
When making this list, make sure to indicate how you plan to use the funds. If you have already received investor funding or financial assistance, provide a detailed breakdown of how you used the funds.
For a dedicated esports venue, you will need to set up a tournament room or hall, complete with a stage and audience seating.
In larger esports arenas, tournament stages are often found in the center of the room. There, two groups of five to six PC stations are set up for the competing players. Audience seating is arranged around the central stage, similar to a boxing fight.
For a smaller esports center, the two teams are seated on a traditional stage set up in front of a crowd. Large TV screens are also usually set up behind the stage so the audience can see the game as it progresses.
Other common requirements for esports venues are:
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In this section, you will need to include three major financial documents for any business. These are your balance sheet, income statement, and cash flow projection. If you have already started business operations, then you can replace the cash flow projection with your cash flow statement.
Take great care in completing this section. Any potential investor will be keeping a close eye on the information you provide here.
You can start this section by again recounting any funding you’ve received. Explain from where or whom it came from, the total amount, and how it was used.
It may be best to enlist the services of an accountant to help you create a proper balance sheet, income statement, and cash flow projection.
The appendix is where you would collate any pertinent information and sources used throughout your plan. This includes the following:
The appendix serves as a source of proof for your previous statements.
Once you’ve finished writing the whole business plan, go back to the very beginning. Now is the time you can write your executive summary.
Different sources may give you different ways of organizing your plan. This is because there is no one way to organize it. However, one common factor in all of them is that this summary should always be first.
Our last piece of advice for creating an esports venue business plan is to make sure it looks and feels professional. If you can get it professionally edited, printed, and bound — then all the better. A more professional-looking business plan may help grab investors’ attention more and save you a lot of time.