Thinking About Starting a Business

[Spor_tees]

Ok I used to live in Ohio all my life, but now I find myself in a little town in southern Kentucky called Williamsburg. I visited the local mall (if you can call it a mall it's more like a shopping center) and found out that they have a movie theater inside that has been closed for about 8 years. I caught up with the mall manager (Smoke'n hot chick) and she took me inside to show me around the theater. It's not in too terrible of shape and has 5 screens in it.

So do any of you guys have any experience in this field? I would like to find someone that could give me some good information. Right now I am in the stages of writing a business plan but I still need to compile a lot more information before I can finish it.

[Spor_tees]

Not everyone chime in at once!

Does anyone here own their own business that might have some good suggestions?

[redsbengalsbucks]

Not everyone chime in at once!

Does anyone here own their own business that might have some good suggestions?

Sorry, I have no experience running a business. The only thing I can add is the economy is bad now and getting worse all the time, a movie theater start-up might not make any money for a few years.

[BengalszoneBilly]

The only thing I can add is the economy is bad now and getting worse all the time, a movie theater start-up might not make any money for a few years.

Exactly what I was thinking. Now might not be the best time.

[Spor_tees]

Well I am working on one of those economy stimulus guaranteed small business loans. I just live in a small college town that has zero kind of amusement for any of the students or residents. You have to drive about 20 miles just to get to another movie theater.

And it's a dry county! :frustrated:

[BengalszoneBilly]

Well I am working on one of those economy stimulus guaranteed small business loans. I just live in a small college town that has zero kind of amusement for any of the students or residents. You have to drive about 20 miles just to get to another movie theater.

And it's a dry county! :frustrated:

Kentucky is weird that way.

[BengalPimp]

Although my business is not in movies, a few things I would consider are:

Why did the movie theater go out of business in the first place? If you can gain access to any type of records from the previous owner to get a general idea of the costs.....A profit/loss statement maybe? That might tell you if it was a good business and just run poorly, or it was just a bad business for that area. Also do research to see how the population has grown in the past 8 years.....

Do you have any experience with movie theaters and how they operate besides just being a moviegoer? If not, where would you find someone to help manage or at least give you some operational tips?

You mentioned the movie Theater was closed for about 8 years. That likely means the Theater is very "dated". One of the first things I would do is inspect it and see if it has the capability to show some of the enhanced movies of today, such as 3D, IMAX, or who even knows how good the sound system in the Theaters are? I mean, it's been at least 8 years since they were in operation, who knows when they were put in? Get specs on everything, and see if anything would need to be upgraded, then get estimates.

Also, you mentioned it's not a big town, so you have to expect there not to be "packed houses" but also my concern would be that there are only 5 theaters. That might be enough some times, but say for example in the summer when you have the "summer blockbusters' that need to stay in your Theater about 4-6 weeks (because it's doing like $500 million at the Box Office). if you have like 2 of those movies, and the others you keep for like 3 week average, you don't have enough screens to show the new weekly releases, let alone multiple showings of Blockbusters.

Again, my business is not in movies so I'm sure that there is much more to consider, but being a business owner myself, these are some of the things that would come to my mind first.

Please, don't let this discourage you, as you really can't succeed if you never take risks.....Just make sure it's not too big of one....

[Scottishbengal]

Do some market research - get a list of questions and stop and ask people in the mall (shopping center). Such things like - did you ever go to the previous cinema (if yes OR no - why?). Would you go to the cinema if it was re-opened (yes - no - how often??). The bank would be interested in this info as well as part of your business plan.

Whats the seating capacity? You won't be selling out every viewing so base your figures on a low bum/seat ratio - say 20% - if you can make the figures add up at that rate then anything greater and you're in the $$$$

Look at the cost of purchase/sale of sundries - sweets, popcorn, fizzy drinks etc and see what margains you could make - this will help bump up your overall profir margin as the mark-up will probably be high and the turnaround quite rapid.

Look at advertising costs - local press, billboards, local radio, website etc - you've got to get the message out there on a constant basis so talk to people about longterm (12month) contracts for taking out so many adverts etc - don't be afraid to ask for discounted rates.

Think about "specialist events" (calm down Billy - I don't mean porno marathons!!). Xmas films at xmas, horror nights especially at Halloween , romance at St Valentines Day etc.

How about a kiddy-club?? Cartoons or kiddy films where the kids can be entertained for 2 hours or more whilst the parents do the mall-shopping.

Talk to the banks - who was the banker for the previous business and what advice can they give you as regards your idea as a going-concern from their experience?

Are you looking to lease or purchase the property? If a lease would the building owner consider a peppercorn rental figure for a share of the profit? If you make money they make money, if you don't they don't - DO NOT be afraid of asking for this option, the building hasn't made them any money for 8 years as it is !!!

Is there an option of other useage for a screen or two - seminars, theatrical productions,live bands etc?? Do worry that it's not your specific area (ie, cinematic) just think of getting people through the door and selling the sundries where the high margains are made.

These are just a few ideas of the top of my head - hope it gives some food for thought. PM me if you need/want to.

[Spor_tees]

Thanks for some of the feedback. One thing that I learned that some of you may not know, movie theaters only get a portion of the gate take. They actually have to hire a movie broker to negotiate deals and percentages of take for each film. So as an example take a movie like Avatar. If you wanted to play that movie in your theater you would contact your movie broker and he would then contact the distributor for Avatar. The distributor would give the broker a percentage like 70%/30% whereas the movie production company would get 70% of the gross and the theater would get 30%. The movie broker would then contact the theater to see if they are still interested in the movie, or if they want him to negotiate to a certain percentage and so forth.

This type of deal goes to explain a lot about why some theaters have high ticket prices and why theater food is so expensive. If a theater charges $10 for a Saturday night flick, they might only be getting $3 of that ticket price, which isn't much. I am sure you can now get where I am going with this. With the high cost of overhead and wages how could a theater make any money if they are only getting $3 from each ticket? Well they have to make that up by charging $2 for a 25 cent candy bar that they get to keep 100% profit from. Soda fountain drinks are the biggest profit margin of any item. Most times, the cup the pop comes in cost more than the actual pop! Of coarse popcorn also has a high profit margin once you have the popcorn machine paid off. There is no coincidence that such high profit margin foods are sold at a theater.

And now you know....and knowing is half the battle!