According to the message Effects of the Covid-19 crisis on the escape room industry of the Spanish Association of Live Games Escape Room (Aejever), there were 1,721 escape games in Spain in 2019, managed by 974 companies.

The pandemic has hit this sector hard. That escape room is a leisure activity in which a team of 2 to 6 people is locked in a room. To get out they have to solve a riddle or mystery in a given time and test their mind with puzzles, logic games, scientists, etc.

Restore the growth trend

The companies of escape room try to overcome the crisis by putting into practice all the anti-Covid measures: mask, disinfection, longer time between sessions to ensure thorough cleaning of the room and games, mandatory prior reservation, safety distance between groups and with the Game Master.

But it’s fair to say that escapism companies are also going through a process of reinvention. For example, they propose online alternatives to have fun without leaving home, using a computer or tablet and mobile phone. They are also looking for other target groups, beyond groups of friends: families with children, children, schools. They even organize activities in the open air or at customers’ homes, for example on the occasion of a birthday. And finally, some companies have discovered another type of customer that is also very attractive: companies that are hiring more and more escape games to assess the skills of their employees to strengthen teams in activities team building or as proof in selection procedures.

What the customer appreciates the most is the game itself, the difficulty of the tests, the setting and the game master’s treatment. Designing an escapism session requires a multidisciplinary team, and buying a medium-quality game can cost around $30,000.

There are games for all tastes with a variety of themes, from heists and murders to history or science challenges. The segmentation of the public that we address with each of them is therefore a key strategy for entrepreneurs entering this sector.

Challenges and opportunities in the industry

Alba Gutierreztogether with his partner, a computer scientist and “craftsman” – an escape room is maintenance-intensive -, founded in May 2018 in Palencia escape room One hour. Together they designed and built the game The Hermit’s Revengeabout saving the city. Having weathered the difficulties caused by the pandemic, they resume the path of growth and explore opportunities. While groups of friends used to be their main audience, today they are well received by families and also offer outdoor activities for children and for festivals in the surrounding towns.

To new entrepreneurs Alba Gutierrez recommends patience, resilience and an “economic cushion”. It also emphasizes the importance of moving into other spaces, being an “outlier” and weaving collaborations and good relationships. There are flyers with other games in his room. Loyalty cannot exist in this activity due to its intrinsic nature. The good news is that there are several roommate professionals. Rooms cooperate and merge and even offer routes or leagues, generate discounts to play in other rooms, create search engines and directories where escapists can find games, get information and rate them.

At the side of marketingIn addition to being recommended by other rooms and customers, an appropriate brand image is necessary, starting with a good name and ending with constant new customer acquisition through SEO as well as online and offline advertising.

Alba Gutierrez She also points out the importance of legitimizing their field of activity, which does not even have its own IAE heading, let alone a specific legal framework, employment contract or common procedures.

Venue and Facilities

An escape room occupies about 20-30 square meters, to which still need to be added a reception area, a game master’s control area through a video surveillance system, bathrooms and lockers. Depending on the number of participants and if you want to make a second room possible, you would need a space of 100 square meters or more.

And the truth is, not every place is worth it. You must get the building and opening permit from the town hall. To do this, the premises must comply with regulations on accessibility, ventilation, signage and fire evacuation, electrical installation, systems and safety measures.

You must also obtain liability insurance, occupational risk protection and data protection. And of course a professional decoration to match the chosen theme and with the necessary accessories.


OUR ASSUMPTION: INVESTMENT, FINANCING AND OPENING BALANCE SHEET

Author: Luis Sendino

Rita wants to open her own escape room. He knows that the sector has suffered greatly during the pandemic, but he believes that it will soon regain the growing trend of recent years and that other income opportunities are also emerging, such as B. Outdoor games, those that take place online, and those that are aimed at companies as a team building resource or in selection processes.

Rita worked at one during the “golden years”. escape room and she is confident that her game, which she has already designed and tested, will be a success. As before, he will be responsible for receiving, guiding and discharging clients, as well as managing the communication strategy.

The premises have an area of ​​120 mtwo (could host a second game) and includes a rental fee of 800 euros per month (plus two months deposit). The conditioning requires an investment of 12,000 euros, plus expenses for computers, video and audio equipment (3,000 euros) and a further 12,000 euros for furniture, equipment, equipment and signage. In total, the investments in fixed assets amount to 27,000 euros plus the corresponding VAT (21%).

He knows he has to start with a treasury that will allow him to face the first few months of liquidity that should have fewer payments and he estimates that 5,730 euros will be enough.

The total investment of 40,000 euros will be financed 75% from the developer’s own funds and 10,000 euros from a five-year loan at an interest rate of 5%. Rita prefers not to include in these initial calculations the subsidies to which she may be entitled, which, if granted (and collected), would serve to reduce debt.

OUR ASSUMPTION: FORECAST REVENUE, EXPENSES AND INCOME STATEMENT

In order to simplify the necessary calculations to assess the profitability of the business, Rita assumes an average price per session of 50 euros including VAT, regardless of the number of participants they hire, knowing that it is more profitable to groups of 5-6 people to charge members as from a couple.

It will open from Tuesday to Sunday with 8 possible sessions per day and we expect it to start with 60 contracts in the first month and continue with a growing trend allowing it to close December with 130 groups.

We are very cautious about the impact of novelty, holiday seasonality and consumer endorsement.

Considering that as long as there is only one game, Rita will not hire anyone, the biggest expenses are related to communication, both in the launch phase and in the maintenance, online and offline: her own website (which she will design herself , with a domain and server costs about 120 euros/year), profile management in social networks, advertising mainly on specialized websites and social networks (Instagram and Facebook), flyers, brochures and presentation materials for companies. In the first year, he invests at least 3,000 euros for this.

Additional costs are incurred in connection with the operation, e.g. B. the self-employed remuneration (flat rate 60 euros per month for the first year), consumables (electricity, water, telephone, internet) for 200 euros/month, liability insurance premium of 300 euros per year, repair and maintenance expenses in the rooms ( 2,400 euros/year) and depreciation of fixed assets.

The income assumed in this way would lead to a settlement of around 48,000 euros, which, with expenditures of 24,000 euros, would generate a pre-tax profit of 24,000 euros in the first year, which should serve to pay Rita and allow the activity to grow.

The Balance Point

In this section we have to add to the fixed costs (24,079 euros) the desired salary advantage that Rita wants, let’s say 18,000 euros. How many games must be sold for 50 euros each (incl. VAT) to cover these costs and receive this remuneration?

The solution is simple: we divide the sum of fixed costs and expected profit (42,079 euros) by the unit price of the game. The quotient, 1,026, is the number of games per year to be contracted, averaging 85 per month, about 22 per week.

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