Location vs Cost

[Saagi]

Hi all, long time reader first time poster. I've been working two jobs for about a year now. Finally paid off the small amount of school loans I've accrued and am now working no saving. I don't really have any support as far as anyone interested in starting the LAN center with me, and I feel banks will laugh at me (not to say I won't apply for a loan under the LAN cafe model like was mentioned. I was looking at trying to keep saving for 4 years should give me about 80,000$ to work with. Sooner if I happen to run into someone with similar Ideas.

1)is 80,000 to little to attempt to start a lan center assuming I build the machines, remodel and do the cabling myself ? I'd need to higher someone else to do the server bit I don't know the first thing about servers sadly.

2)I live in a college town Lubbock. I there are and have been a few places directly by the university. just across the street that are about the size that I would need 2500-4000 just depending on where I am looking. but they are ~15/sqr ft there is a highschool less than two miles away. The spaces are in a line of other shops that deal food, an anime shop just down the road and bars, lots and lots of bars. Is the high price of sqr footage worth the potential foot traffic?

3)I took a business class but they didn't really cover liquor licenses. I've attempted to look but can't really find the answer to my question. I would like to attempt to have a liquor license if only to take a share of the people who would be looking to drink instead of game. but that would cut my younger aged crowd out of the equation. Is there anyway to have it both ways? like 18 and under allowed until X time then you have to leave?

4)I would like my setup to be approx 20 PC and 8 xbox 8 ps3 I just don't know enough about PS3 how often do people play this?

5)I'm worried about breaking even on any given month but I don't want to split myself up to much and am trying to refine my aim. I know I want to serve drinks especially BAWLs no one in town sells cases of it any more and I feel like I could make a bit doing that. as well as repair computers. But would it be smart at all to sell any kind of prepared food? or maybe try to work out a deal with one of the neighboring shops.

6)I guess this is directed more at deeds, there is a newer version of the book you recommended small time operator, should I get that to read or the older book.

7)The closest LAN center is probably about 5.5 hours away would it be wise to attempt to get out and look at their setup, talk with the owner and see what they did?

I'm working hard. A full time IT job and a part time job in the wal-mart pharmacy. I just worry about making that leap when it comes time. Thank you all so much the forums are amazing.

[Alomax]

Hi! Welcome!

1) $80k in cash is a very nice place to be.  You can start a small LAN with no loans and only borrow from yourself (no interest). Or, you can leverage that $80k and get a SBL from a bank for another $80-$150k using your $80k and the company assets as collateral.

2) $15/sqft/yr is not high. $30 is high, and $50+ is generally ridiculous.  Here is the rule of thumb : assuming your lessor is offering a fair price, then you can either have a nice location and spend a small amount on advertising, or you can get a cheap location and spend a ton on advertising to get people to notice your hole-in-the-wall.

3) If you can get a liquor license, do it. Don't worry about cutting out the younger crowd unless that's what you really want to target (everyone is entitled to personal preference, I'm just speaking from the business perspective).   The average age of the self-described gamer is 37 which means that there are a good section of gamers that are even 40+.  Do some quick napkin math and see what the larger demographic is : under 18 (12 - 18 = 6yr span) or 18+ or 21+ (21 - 40 = 19yr span).

4) First read this about small station counts.  As for the PS3, if you don't know about it, don't put it in the store.  This is not an accusation of incompetence, but rather a point about social engineering.  If you (or someone else who is there on a daily basis) is not enthusiastic about the PC/PS3/X360/Wii, then you will not talk to your customers about it as much, they will not become interested, and they will not play it as much. (this also applies to individual games btw)

5) Here is a nice article by a friend of mine detailing what it takes be a restaurant, and to a lesser extent, serve any kind of prepared food.  Snacks and drinks, anything in a package, you're fine.  Serve any kind of prepared food, and you need a license, so be prepared.  Computer repair would be a much more sensible move IMO.

6) :p

7) Yes. Be up front about who you are and why you are there, don't skulk around.  Call ahead and find out who the owner is. A lot of people are very protective of their business model (I've no idea why, none of us are millionaires, but everyone thinks they will be, and very few of us are close enough to compete with one another).  Don't be afraid to offer a token amount of cash for their time if they will answer some questions.

[Saagi]

Are there any resources you can recommend as far as setting up your LAN's network I guess. Do you use domain based accounts? Non domain basic logons? For PC's what do you do to remove the need for the disks? Just purely Steam games? Do I need a server and / or just a real hearty 100mbps switch?

sorry for the subsequent barrage of questions. xD

[Deeds]

6) always get the newer version.  SOrry I should update that.

-deeds

[Rieja]

3) If you can get a liquor license, do it. Don't worry about cutting out the younger crowd unless that's what you really want to target (everyone is entitled to personal preference, I'm just speaking from the business perspective).   The average age of the self-described gamer is 37 which means that there are a good section of gamers that are even 40+.  Do some quick napkin math and see what the larger demographic is : under 18 (12 - 18 = 6yr span) or 18+ or 21+ (21 - 40 = 19yr span).

Does the 9yr span (12 to 21) outwiegh a liquor license though?  If one does not get a license, technically the market opens up to 28 year span - 12 to 40. I guess the question is: does liquor attract and retain more people than a 9 year demographic?
 
edit: added retain to last para

[Saagi]

I know some bar/grills or sports bars around here allow a certain age group under 21 until a certain time. I don't know what the restrictions on that are. I'll need to try and find that if the liquor license is going to be an option.

[Alomax]

Are there any resources you can recommend as far as setting up your LAN's network I guess. Do you use domain based accounts? Non domain basic logons? For PC's what do you do to remove the need for the disks? Just purely Steam games? Do I need a server and / or just a real hearty 100mbps switch?

Resources? Well, me (we do full deployment services)

I highly recommend running a windows domain. It makes security 10x easier, no matter what program you use to sell/manage time and customers.  As for discs, most games in the last few years don't need a disc beyond the initial install.  For older ones, daemon tools will work very nicely.  Avoid games that use limited-activation DRM. (Red Alert 3, Bioshock 2, some others). 

Steam is great, as is their cybercafe program.  GoG.com is also nice.

Yes you do need a server.  It doesn't need a lot of ohmf usually, but it needs to be decent.  At just the basic level, you'll need a good amount of storage (1-2 TB) and a good NIC.  For the switch, get a level2 managed switch. You need something highly robust, you are not running a home network, do not use home networking equipment.  People frequently try to save some money and get a 10/100 switch, but I recommend against it.  The reason is, as far as normal every day operations, nobody playing any game or watching any amount of video will even come close to maxing out a 10/100 NIC or switch.  However, as soon as you need to move files around (like a 20GB install of WoW, or 11GB for BF3, etc), you'll find yourself reeeeealy wishing you had a Gb switch.  If you really want some power, get a switch that is capable of handling bonded NICs, and some NIC cards to match, and bind 2-4 NICs into your server. This allows you to copy files to/from the server from 4-8 PCs at the same time at full speed.

[Alomax]

Does the 9yr span (12 to 21) outwiegh a liquor license though? ... does liquor attract and retain more people than a 9 year demographic?
 

That's a good question, and I don't have an answer. I would assert that the <18 demo is very easy to attract and retain, and the 18+ is harder, however the potential size of the latter is higher.  The main consideration I was weighing was the fact that if you are able to sell alcohol, your sales and profit on sales escalates by a large factor.  A lot of LAN centers operate on a very thin profit margin, and are one major unexpected expense from closing.  Anything to provide a cushion (and grow the business faster!) is a good thing IMO.

[johnlarson]

I am an 18+ over center.  We do not sell alcohol and I would never want to.  18 - 25 yr olds are our main group.  21 - 25 yr olds drink differently than 30 somethings.  I think a family aged center would be better to serve alcohol in, Chucky Cheese has beer.  That way the adults can drink why the kids play.

[johnlarson]

On a side note, if I had more food or a snack bar type space, beer would be good.  My original concept was to be like a bowling alley.  With a grill, lounge and pro-shop.  Money and licensing forced me to keep it simple.

[Playground]

As far as location, I moved to a major city where there's nothing like this here. And the city where I'm actually from, there's nothing here, but it's a small city. But the smaller city has nothing in place for the kids. Should I start in the small city, or should I start in the major city?

[Saagi]

Thanks alomax will keep that in mind! (the services you offer I mean)

[Alomax]

@Playground - how big is "small" and how big is "big"?  Numbers! :p

[Playground]

LOL sorry Alomax. I currently live in Atl. My little small town maybe consist of 25-30k.

[johnlarson]

http://www.usgamingarena.com/