Business Idea.....need input!!!!

[seven dwarfs]

Thank you Thank you Thank you for being honest and detailed...that's what I was looking for...a reality check..we think we have this really great idea, but after the breakdown of the numbers and all the hidden costs...I am def scared about risking our home. Hubby and I have been planning this for a while, but now that we found a place to lease..we are getting scared and wondering if this is just too big of a risk for us.. I soooo appreciate everyone's honesty here.. I love these boards!!!!

By the way my $3000 calculation is $800 lease, $1000 loan, $1000 utilities and $200 Misc. (phone,cc) and we plan to pay liability insurance for the year and will not have any employees (just myself, hubby and teen daughter)...also no sales tax in NH..I could still be missing something though...have never owned a business before.

OK, 3000 is way to low. You do not have any taxes, accountant fees etc. I don't see any money in the $3000 for your income. You need a lawyer to open your corporation. You and you hubby and daughter will be employees under the corporation so you have to pull a paycheck. That also means you have to pay taxes. That means you have to file with the IRS and state on their schedule. By the way, the IRS expects you to know the schedule and if you do something wrong there will be major penalties and interest. I have spent many hours on the phone with the IRS. It is a huge nightmare! You can use Quick books to help you but that cost money too. Oh, you need checks to print off quick books. A phone line in the state of Maryland will run you between $60 and $80. It is not the same as a personal line. Not sure what your state charges. You can check with the electric company to see how much the electric has cost per month in the past but I am guessing you are looking at over $200 a month. It is unwise to think the three of you can run this business alone with no help. You will burn out so fast. If you plan on having food, where is the money for those items including silverware, napkins. You need toilet paper and paper towels for the bathroom. Do you need a health inspection since you will have snacks? How about money for a exterminator to spray once a month to keep bugs/mice at bay.

I know my post is a ramble but to be honest, this is how it is when you run a business. It is a nickle and dime you to death and at the end of the month
when the taxes are due, You will wonder how will you pay them cause nothing is left! Then you will tell yourself, next year will be better. But it is just the same over and over. You will work Holidays, nights and weekends. When schools are closed you will work. Forget Disney.

We have a local college that has a business department that will help someone who is looking to open a small business. Maybe see if there is anything like that in your area. I hate to be negative but from what I see here, you are not ready to open a business yet and it would be awful to take out a loan on your home and then lose it! (if that's the kind of loan you r looking at)

I am sure there are business owners on here who will say they love owning their own business and are doing well. It can be done. But it comes with a huge price.

 

[Disney845]

I am totally not trying to shoot down your idea!!! But like some of the pp, I really question the figure of $3000/month for your operating costs. You are figuring only the lease, loan payback, utilities, and a "very very very" small misc cushion.

You are not considering facility maintenance, liability insurance, property insurance, payroll, fed and local taxes, license fees (more so if you serve food and drink) consumables (you mentioned snacks and drinks, but you will need paper goods for both the food and lavatory facilities, cleaning supplies, etc), marketing costs (how are people going to know you exist?), accounting/banking costs (business bank account, credit card processing fees, etc), replacement equipment costs (new clubs and new balls when things get worn, stolen, misused), funds in the bank to replace anything that breaks -remember who your target audience is, either families with young children or maybe groups of teens without parental supervision [read: disaster and destruction waiting to happen] etc, etc.

I think your $1000/month utilities is low too. This is an indoor facility, probably of a good size to house a mini-golf course. You are talking heating, cooling, refrigeration (for the snacks/drinks), electrical (lighting, the arcade games you mentioned, running the computer/cash register), water (what if some kid turns the tap on in the sink to be funny and no one notices for several hours?), phone (800 number? you pay all of those incoming minutes, PLUS a fee to have the toll free number), will you have flat screen TVs in the arcade area, do you need to pay satellite or cable costs, will you have an internet connection (even if only for your employee use for doing banking, etc), will you have some sort of security system or video surveillance (not only the initial outlay of cost, but monitoring costs), will you have a website to direct people to your facility (the initial web development fees, the domain name purchase, the hosting fees), etc, etc.

Take this as an example regarding payroll:

NH min wage (according to Wikipedia) is $7.25. I am going to assume that you will be open 7 days a week, at a minimum of 8 hours/day. That is 56 hrs/wk or "about" 224 hrs/month. Lets say you run the business on a skeleton crew of 2 people (which is probably unrealistic). That is 448 hrs a month you are paying an employee (not including the additional funds you pay to the government in payroll taxes, any workers comp insurance, any additional employee benefits). So in just 2 employees you are at $3,248 +++ in payroll each month.

Now you may be thinking your family alone will be working (so no independent employees). Ok fine...but you are not working for free. Even if you only pay yourself the equivalent to the minimum wage (which, why would you start a business, unless it was a non-prof out of the goodness of your heart, to not "make" money), you are over your monthly expenditures, just with your min wage take home pay for you and your husband (let alone the daughter). Plus figure in far more hours than an employee would work.

If you do not have the money to back the business and need a loan to start it (meaning you are not already independently wealthy and don't need a salary), how are you going to pay your own home mortgage, utilities, food, etc on min wage??? Are you considering how expensive independent health insurance is for your family if no one works for an outside company with employer sponsored health care benefits?

 

[princessnoelly]

http://www.golfernoggins.com/

I live in ABQ, NM. Golfernoggins has "glow golf". We haven't done it. We have gone to golfernoggins but only in the summer. It get HOT in NM (90-100 in the summer) and you can't do anything. We have mild winters (few days below 40) so summer is our real- don't go outside time of the year.

I agree with all the PP about the expenses being too low. I would figure monthly cost to be double and income half of what you expect in your first year. I work in a family run business and you can't plan for what we've been through in the last 3 years and what's about it hit (Japan's crisis will impact our business even more). The effects of Japan will also impact your ability to get "glow" products (some are made there and even if they had the work force right now and the buildings standing there is NO power to do anything- brutal honest- sorry for it).

Good luck with your decision.

 

[NHBelle]

Thank you everyone for being so 'brutally" honest...this is why I posted here.. I want the truth.

If you do not have the money to back the business and need a loan to start it (meaning you are not already independently wealthy and don't need a salary), how are you going to pay your own home mortgage, utilities, food, etc on min wage??? Are you considering how expensive independent health insurance is for your family if no one works for an outside company with employer sponsored health care benefits?

My husband would have to keep his full time job and work some nights at golf with our daughter filling in and helping...I would work days and we would work weekends together.


YES..we want to make money...I did not add a salary into the $3000 cost..that is just the minimum needed to pay the bills, and I am worried about the cost of heat and electric...I realize I need much more to be profitable...starting to wonder if it's possible at all.

 

[disneycruising]

We have one of these in Northern California. I believe it has been around for about 4 years.

www.superfranks.com

It is great because they have something for everyone. A play area for the littles kids, glow in the dark golf, an arcade, a gym, party areas & a theater area.

What I like about them is they server "real" food. You can get pizza, but they also offer a selections of pasta meals. Plus, you can get a glass of wine.

We go about 1 or 2 a year...but my children are older (17,15,13,11). Usually during spring break & summer time.

** I do have to point out the one in are area is located in Pleasanton, California. Pleasanton was on CNN Money Magazine's list of The Best Places to Live in 2010. That of course is the Best Places to Live in America. Another interesting fact is that a few years back Pleasanton was ranked the wealthiest middle-sized city in the United States by the Census Bureau.
http://cheapestplacestolive.blogspot.com/2011/01/pleasanton-california-best-places-to.html

 

[lizabu]

It sounds ok but would be so much better with real food and a bar. You could attract adults after 9 pm and alcohol is a real money maker. You will never make as much money with soft drinks and chips that you would make if you had a bar and most places require you to serve food if you have alcohol. Maybe a 3rd party would want to come in and manage the restaurant section.

 

[seven dwarfs]

Thank you everyone for being so 'brutally" honest...this is why I posted here.. I want the truth.



My husband would have to keep his full time job and work some nights at golf with our daughter filling in and helping...I would work days and we would work weekends together.


YES..we want to make money...I did not add a salary into the $3000 cost..that is just the minimum needed to pay the bills, and I am worried about the cost of heat and electric...I realize I need much more to be profitable...starting to wonder if it's possible at all.

You plan to work during the day alone? What if someone needs help or something is jammed on the course? Who will go to look at that and who will watch the register. If you go to the potty who is watching the register and answering the phone. How will you take money, give out equipment and sell snacks? Also, for your safety, you need to have more then one person at a time. I had a robbery at my salon and learned this the hard way. All the hours this will require for several years is a huge sacrifice to family time that you can never get back. Not to mention the stress it could put on your marriage.

I don't think any of us want to take away a dream. We just want to make sure you are being realistic and have a business model set up. There is so much more to a business then I ever knew. I would hate to say to you, sure go for it. Then in 1 year, you post on here that you are losing your house due to this business failing. I would rather you re group, become more business savvy and if you do go ahead with this idea, to see you post in one year thanks for all the help! I think it is hard to have a successful business today.

 

[prncess674]

Have to agree that there is no way you should work alone during the day. That is nearly impossible with that type of busines. Also you are going to run your DH into the ground since he would basically be working two full time jobs. Is he prepared to get to get off work at 5pm then go straight to the golf facility and then work till closing at maybe 9:30? Once you close up shop at 9:30 you would then have to sweep and mop, clean all the bathrooms, pick up and put out trash, balance the till. Early evenings will be your bread and butter time on weeknights, so you would both need to work. Who is going to help your younger kids with homework and get them to all of their after school activities or pick them up from school? Your family is going to be basically living at this facility, will you have to build out a private room for the family so the kids can do homework and eat a healthy snack?

 

[Disney845]

Just another few thoughts I had.

Your rent seems low at least for the size of facility I am imagining. Clearly I know this would vary "widely" based on many factors, but to put it into context, we have 3200 sq ft in an industrial complex (office and warehouse space) and we are in a depressed area, more than half of the whole complex is empty and we have been able to negotiate substantial rate decreases first in 2010 and then further in 2011 because of our longevity here at the location and we pay just over $1800/month.

I am very curious at what facility would have such a low rent for what I am imagining is a considerable amount of space (10,000+ sq ft?) both indoor and for parking, with the substructure to be able to make these considerable structural changes that I would assume you need to undertake to transform it into a mini golf course. So this makes me wonder if the owner is in distress and trying to lowball the price to get a tenant? How many sq ft is this? Is it zoned for what you want to do with it, is it up to the codes required? What about the parking situation, is it adequate to handle the flow of customers you anticipate/need? How old is the building/plumbing/roof?

I would be VERY hesitant to put $45K into a build out for a location I didn't have a financial stake in as well.

What are your contingency plans for the rent to increase, or the owner of the building going bankrupt, or just selling off the location (even leases with clauses in it to protect the lessee in the case of sales are not iron clad) after you have put all of this money into a facility that isn't yours?

What things in the lease are and are not "your" responsibility? For example, repairs under such and such are the renters responsibility vs over such and such are the owners responsibility.

And I thought of another "little" hidden cost. Every year we (use to be paid by the complex, now it is the renter's responsibility) have to pay for the inspections on the fire extinguishers and the emergency lighting (not sure if this is the same where you live), but if the fire marshal comes to check and they are not up to date, there are heavy fines. I am sure there are all sorts of other "little" things like this, which taken alone don't cost much, but they add up, especially when you are working on a very tight budget with no cushion room.

 

[NHBelle]

Good points about working alone...but this would have to work...in our rural area most business work this way.. I worked at my friends home made ice cream shop all last summer alone day and night..We do plan on having a "family" room with fridge, microwave, tv and toys etc. Also the space is about 3000 sq ft...it was a commercial garage and was converted into a photography studio and is now vacant. The lease price actually double that amount, but included several offices that we don't need so we negotiated the price. We would pay all utilities and since it is a huge open space with 30+ ft ceilings, it will be a lot to heat and cool...but other places we looked at are $3000+ per month (not including any utilities either) so this is a good deal. We would love to do food, but the added cost of equipment, licenses, & taxes would just be too much. So what we would have is a 9 hole indoor mini golf course (would have a price to play 2 rounds for 18 holes) with a party room and small video game area..we would sell glow in the dark items, soda & snacks.

 

[seven dwarfs]

Good points about working alone...but this would have to work...in our rural area most business work this way.. I worked at my friends home made ice cream shop all last summer alone day and night..We do plan on having a "family" room with fridge, microwave, tv and toys etc. Also the space is about 3000 sq ft...it was a commercial garage and was converted into a photography studio and is now vacant. The lease price actually double that amount, but included several offices that we don't need so we negotiated the price. We would pay all utilities and since it is a huge open space with 30+ ft ceilings, it will be a lot to heat and cool...but other places we looked at are $3000+ per month (not including any utilities either) so this is a good deal. We would love to do food, but the added cost of equipment, licenses, & taxes would just be too much. So what we would have is a 9 hole indoor mini golf course (would have a price to play 2 rounds for 18 holes) with a party room and small video game area..we would sell glow in the dark items, soda & snacks.

How long is your lease going to be for and how long is the rent so cheap? I would be worried about the investment to get this golf going. Whomever owns the building WILL raise the rent. You will be stuck paying what it is raised to because all your investment is stuck between the owners walls. You need to call the electric company and get them to disclose how much the electric bills were when the building was fully in use. (I am sure 3,000sq ft = $$)

What will you do if you are busy taking money and there is something wrong somewhere? Serving ice cream behind a counter with one person is totally different then running this business. If you have a birthday party how will you handle taking care of that and answering the phone and taking the money? If your area is rural, will families be able to afford to pay what you need to charge and how often will they be able to afford to go?

I just want you to think about everything so there are no surprises. Once you sign on the dotted line, there's no going back!

With what you have shared so far and looking at your numbers, it is not a good idea right now. You need to have a more accurate monthly expense. That will tell you a price point of what you need to charge. Owning your own business is a huge risk. I think it would benefit you to start saving some $ instead of a loan. Research it some more. Also you should look into some business classes to help you be more informed. I know it sounds like fun to own your own place. I am worried because you haven't thought about alot of things.

 

[Perditamarie]

wow, there has been some really good feedback here.

I have 2 points to add:

* a facility of bouncy structures or even a laser tag course seems like it would have less investment in internal infrastructure than building up 9 different holes of golf - love the thought of bouncing out all that energy during the long NH winters!!

* there are business taxes in NH!
http://www.scorehelp.org/lists/tax_computations.html

I think taking the time to develop a comprehensive business plan would be helpful.

 

[MichelleinMaine]

#1 I think you should talk to someone in business where you are to get a feel for local economy, expenses, etc. www.score.org has all sorts of free resources, talking to them (and looks like it would be Rumford or Conway closest to you, I'm guessing you might be in a "German" town pronounced funny? If so- someone local could help you factor in perhaps in for tourist traffic in summer and ski season?

 

[Mom2Ben02]

There is an indoor golf place that does packages for families on certain nights - golf for up to 4, pitcher of pop and a pizza for $30. Maybe you can team up with a local pizza company to do the same?

 

[TammyAlphabet]

I would think twice about going in debt to start a business. Find something you love to do and start out slow without debt. The debt increases the risk many times over. The downside is huge.

 

[tinker&belle]

I heard Dave Ramsey speak with someone on the radio about a similar idea. He suggested to start it up as a bouncy house/entertainment business and deliver to people's houses for birthday parties. The start up would be much less, you could save for smaller start up costs and then once you saved up the profits you could decide if having a venue made sense.

He said another upside to this method (in addition to not putting your house at risk) is you have a built up client base with emails and you would have a target audience ready for your launch at this point.

 

[EllenFrasier]

I like the idea of indoor miniature golf, just not sure about the glow in the dark part. Do you mean it will be all dark except the golf area? Or do you mean that it would be like a black light kind of thing that makes things look like they glow in the dark?
I agree with a PP that said you need more food offerings. Hotdogs, nachos and cheese, that kind of thing is not hard to prepare. Kids get hungry and you have to have something else there besides chips and soda or they will leave to get something to eat.
Maybe sell a package. Golf for an hour or however many holes there are, and food and drink for a certain price. Hey even if it's 50 cents cheaper, people will go for it!

 

[prncess674]

I know I have already commented, but after reading more about the OP's plans, there is no way I would put my house on the line for such a shakey business plan. You need to do a lot more research regarding business start up costs related to what you need to live.

If you are looking for a less risky cost and unique set up I would maybe research building some sort of mobile mini golf set up. The holes would be simpler but they would be rigid and could be brought to a client's house and set up in the backyard. They could also be set up at a summer camp in the summer for a day to generate extra revenue. Since you wouldn't have to rent a location you could choose when you worked.

 

[Katy Belle]

There used to be one in the huge Katy Mills Mall in katy, texas. It was never very busy and it was a great location. We loved it, but only went a few times a year.

 

[Coll0610]

I tried a glow in the dark indoor mini golf course once and it seemed really cool for the first few holes but then it started to make me dizzy. I don't think I even finished the nine holes.

If you do start this business some day, you might want to look into getting some leagues or tournaments. A couple of leagues playing each week would be some guaranteed business. You also want to think about your hours. Do you need to be open all day when school is session? Maybe be open all day a couple days a week (for home schoolers and younger kids) but then the other days not open until 2 or 3 for the after school crowd. You could be open all day during spring break and school holidays.