Utilization Question Part 2!

[Hades]

Hey!

I had another question for the existing LAN center owners about utilization. I'm still doing my sales projections and I'm still trying to wrap my head around how some of you have been doing well in your areas. Besides the fact that some of you have other sources of revenue, just looking at the basic bread and butter of a LAN center just doesn't seem to add up on paper when using the traditional utilization formula most of you have used to measure your sales and your projections.

Never mind my operating costs per month, I'm seeing a 40 unit LAN center with a monthly utilization of say 24% coming to around 12k a month on a 320 hour month (lower than most) at 4 bucks a pop. That means I would need to sell at least 3000 hours for the month with the units I have to sell to meet that 24% utilization.

I've been to a few LAN centers near me during the week, and I rarely see that many people in the store. Not enough to really say they are selling 100 hours per day, or even for the week until Friday/Saturday rolls around. But from what I've gathered on the forum, a good bulk of you make most of your money on weekends like Friday - Sunday. I'm just wondering, does that mean most of you pretty much have to depend on packing out your weekends, all machines running from open to close to really make any decent profits for that month?

I only ask because if the week is mostly dead, but the weekend is alive. I would have to fill every unit for a long duration of hours during the weekend to even break around 2k hours unless there is good traffic during the normal week days (Mon-Thurs). I have no doubts I could pack the house, I just fear the long durations not being as attractive for every customer. I can't really see my average customer dropping 30 to 40k per night to just play, nor could I see customers cycling in and out on the weekends throughout the day to make up for those who only spend a few hours on Saturday versus those who stay all night Saturday.

[johnlarson]

I am curious as what LAN centers you have been to near you.

The Fayetteville, NC location was opened in April, 2009.  Last week we had 22% utilization, being open 24/7 I think that is very good.

Here are my hours of usage for each day:

Weekday Hours
Total hours played each day of the week
Sunday 348.00
Monday 211.00
Tuesday 357.00
Wednesday 252.00
Thursday 346.00
Friday 456.00
Saturday 380.00

This is from my weekly SL report.

[johnlarson]

My second store is in a mall and has limited hours of access.  After a year of being open (opened October 2010), we are at 13% (which is not 100% correct because I have 10 stations on SmartLaunch that are not in use yet).  We have peaks of all stations in use during the weekends.

Weekday Hours
Total hours played each day of the week
Sunday 144.00
Monday 154.00
Tuesday 128.00
Wednesday 101.00
Thursday 100.00
Friday 254.00
Saturday 241.00

[johnlarson]

Our newest location (which is not profitable at this time) opened July 2011.  I have 60 stations on SL, but only 39 in use.  So the percentage on the reports is a off.  It shows 8%.

Total hours played each day of the week
Sunday 81.00
Monday 90.00
Tuesday 80.00
Wednesday 83.00
Thursday 204.00
Friday 134.00
Saturday 118.00

[johnlarson]

Also, I am using two SL seats at each location for log in stations for customers to create their accounts.   These are at the counter and only get used for creating accounts or people checking something online real quick.  Sometimes it is used for gamebattles.

[Hades]

Thanks for the numbers! I can already tell I would need to lower my operation costs a lot.

I think most of your locations are near bases right? I assume that were most of your traffic is coming from?

[johnlarson]

Thanks for the numbers! I can already tell I would need to lower my operation costs a lot.

I think most of your locations are near bases right? I assume that were most of your traffic is coming from?

60%

[Alomax]

John - easy way to get a more accurate utilization : Just multiple the number of hours you are open by the number of actual usable stations you have, then divide it by the total number of hours used that day (not sold, used).

[johnlarson]

John - easy way to get a more accurate utilization : Just multiple the number of hours you are open by the number of actual usable stations you have, then divide it by the total number of hours used that day (not sold, used).

The SL report numbers are okay enough for me.  The utilization is more important to me when we are turning away customers.  Right now that has not happened, but we have had some day passes leave and comeback that had to wait a bit.

I expect when I see constant 25% that it will be time to add stations.

[Hades]

Thanks for the numbers! I can already tell I would need to lower my operation costs a lot.

I think most of your locations are near bases right? I assume that were most of your traffic is coming from?

60%

Damn, don't think that relates to me as much because it's military.

How many customers on average do you have daily? It sounds like you have a lot to push out those hours.

[johnlarson]

First,  I am 18 and above.  Second, I am 18 and above.    okay, Second, I give out FREE DAY PASSES to new customers, Third we are open 24/7 in Fayetteville, Forth, VIP members play at no charge for 48 hours a week (Tuesday and Wednesdays), Fifth, wives and gfs play at no charge and lastly, Employees play for free.

All in all we get around 60 cents of cash from "hourly usage".  The VIP memberships and the retail markup on purchases that include VIP membership is not included in that figure.

So you could have less hours with a better cash per hour rate, rarely would that be under $2 in a normal LAN center.

[Okele]

First,  I am 18 and above.  Second, I am 18 and above.    okay, Second, I give out FREE DAY PASSES to new customers, Third we are open 24/7 in Fayetteville, Forth, VIP members play at no charge for 48 hours a week (Tuesday and Wednesdays), Fifth, wives and gfs play at no charge and lastly, Employees play for free.

All in all we get around 60 cents of cash from "hourly usage".  The VIP memberships and the retail markup on purchases that include VIP membership is not included in that figure.

So you could have less hours with a better cash per hour rate, rarely would that be under $2 in a normal LAN center.

Question, and it might be silly or maybe I'm just reading it wrong. VIP members get 48 hours a week of free play? What are they paying for their membership and how often are they paying it?

[Gord]

I haven't checked the stats at my new place, but first store I averaged around 25% usage and the second one was at 28% (with 103 machines) in 2010.

But one can not simply plug in "I will have 25% occupancy, and if I charge $17 per hour with 20 machines then I will be rich within the month!" as higher prices will negatively affect occupancy rates, as will having more machines.  It's far easier to have 12 machines with 3 people per hour on them than to have 60 machines with 15 people on them. 

I also flog month passes at $120, with discounts to as low as $75 for staving university kids because those starving kids have rich friends with too much money who will join them.

[johnlarson]

Today is going to be a good day (ps some of my SL icons there is not any thing on them like the connect and 101, 102).

[Hades]

I haven't checked the stats at my new place, but first store I averaged around 25% usage and the second one was at 28% (with 103 machines) in 2010.

But one can not simply plug in "I will have 25% occupancy, and if I charge $17 per hour with 20 machines then I will be rich within the month!" as higher prices will negatively affect occupancy rates, as will having more machines.  It's far easier to have 12 machines with 3 people per hour on them than to have 60 machines with 15 people on them. 

I also flog month passes at $120, with discounts to as low as $75 for staving university kids because those starving kids have rich friends with too much money who will join them.

Is that per month or week?