All Math in this post is from an 8 station environment, I strongly discourage starting this small. I’m not saying it can’t be done but it is extremely difficult. I started with 8 stations on my first center and within a month went to 24 stations. 8 Stations are incredibly hard to make profitable. Do not start small like I did. Aim for 20 stations or more before you even open your doors. You will save yourself headaches in the long run.
Okay, I’ve gotten alot of questions as to what to charge for time and what do I sell to make money . It really honestly depends on the economy in the area you are located. But, it can also depend alot on how many stations you are working with. Fewer stations you typically need to charge more to make ends meet. More stations you can charge less because you are making your money through bulk not quantity.
Both Lan Centers I’ve been involved with our pricing structure was as follows.
Standard Memebership (Free)
- No membership fee
- $6/hour
- $10/2 hour blocks
- Tournaments/Lockins $25
Premium Membership ($20 yearly fee)
- 5 Hours with membership purchase (this works out to be 4 bucks an hour)
- $4/hour
- $15/5 hour blocks (Works out to be 3 bucks an Hour)
- Tournaments/Lockins $20 (most centers don’t give a price break in this area for membership but I do to build customer loyalty)
I had some VIP memberships at one point but they were abused alot. I was allowing my most frequent customers to buy them and I was losing tons of money. So I discontinued it when I started the second lan center. I don’t suggest giving any bigger discounts then that.
Idea I used to come up with these numbers was then minimum amount one could pay per hour is 3 dollars. I had 8 Computers when I first started(Small but it ended up much larger when I was finished with the location) so:
8 X 3 = 24/hour at max capacity (now this is figuring from the lowest price available)
10(hours open per day) X 24 = 240/day at max capacity an entire day.
240 X 7 = 1680/week at max capacity all day everyday for an entire week
1680 a week just on computer time sales doesn’t sound bad does it? I easily could match that amount with Cokes/Candy/accessory purchases.
But its not Feasible to think your going to have your computers filled at all times. That’s insane. You want to realistically aim for 30% utilization for the week average. (Most your money will be made on Friday and Saturday) So the math is like this:
1680 * .30 = 504
$504 should be your average per week in hour sales per week with 8 stations. Now you can see why selling cokes, candy and other commodities is an absolute must for a Lan Center. During the summer my Lan Centers easily had %50 utilization rate but by that time I had 24 stations. 16 computers 8 Xboxes. Now xboxes and dramatically change that math because you can have more then one paying customer on a station at a time. But the norm is one.
Honestly the mindset I went into the Lan Center with and one you should probably have also. Is that you need your Hour Sold to pay the rent each month. Your Candy and Coke sales to pay for new games, maintenance, electricity, etc. Then concentrate on raising you utilization numbers to start trying to realize a profit (Which really isn’t a profit, you probably have loans and advertising costs to pay for).
I highly advise anyone going into creating a Lan Center to also offer PC Repair and Consulting, this can help you make ends meet in hard times. Also to sell hobby items. For example Magic: The Gathering, Yugi-Oh, WoW trading cards, specialty board games, and anything else that you can successfully sale that fits into your budget.
Making a Lan Center work with these tight numbers can be tough. Its also why I suggest starting with a minimum of 24 computers. But it can be done. I did it and I’m rather stupid, so I’m sure you can too.
I found your link on hardforum.com. Thanks for the insight. Im pretty stoked you made this. Most posts about starting a Lan center are all negative but I have seen them work more than once and have wondered what was missing. Seeing some numbers is pretty refreshing.
I have a couple questions. Have you ever looked into having classes during the day when business is slow? Im pretty sure there are tax breaks for stuff like that and it would get body’s inside.
Also, what thought process did you go through when building your machines? Even better, what configurations did you put on the machines?
Thought Process for building machines: Cutting Edge Techn but not bleeding edge.
I personally never ran any classes, but I did rent out the center in the AM to allow people to have a place to do their own classes. Actually got with a consultant that did training course for medium business. He brought a Live CD (The os and environment runs completely off of a cd) I let the pc’s boot them up and he did his training.
I actually made awesome coke, candy sales at these classes. But you should have seen their faces when they realized they were doing a training class at a Game Center. More then once I converted people attending the classes into regulars of the Center