(Topic ID: 276392)

Am I crazy to open a pinball joint in a sleepy beach town?

By spblat

3 years ago


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  • 85 posts
  • 60 Pinsiders participating
  • Latest reply 2 years ago by mbwalker
  • Topic is favorited by 7 Pinsiders

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    #18 3 years ago
    Quoted from spblat:

    Hi friends. So I want people to enjoy pinball. I want them to enjoy my games and I want a venue for expanding my collection. There's a sleepy beach town I love that has zero pinball machines within about an hour's drive in any direction. Because you can't make money on pinball alone in a smallish space without tons of traffic I was thinking about buying a lot near the beach and leasing space to residential tenants or other business owners in a building I'd raise, leaving me around 1000 square feet for a dozen games and a few tables for people to hang out, have a snack, charge their phones or play tabletop games. Behind the modest token revenue and the tenant income would be merchandise sales, snacks and beverages, in-home game rentals and events.
    So I have a business plan. I have my eye on a lot three blocks from the water. I have a rough financial model. I'm looking for funding in a climate where lenders aren't interested in startups. What I'm most apprehensive about is that in order to satisfy my desire to spread the pleasure of pinball, I also need to get excited about managing the real estate and the leasing and the retail and a bunch of non-pinball stuff.
    What do you think? Am I gearing up to do something challenging and fun, or am I setting myself up to fall out of love with pinball? How do you scratch your "spread the love of pinball" itch without a seven-figure budget?

    A friend and I were planning on starting a similar venture pre covid, but without the low traffic issue you have. We both agreed pinball alone just isn't enough to cover expenses and provide enough profit to justify for us. I do think with the right location and business mix (specifically offerings other than pinball) that a profitable business can be established with a heavy pinball focus. Our goal at this point is to find an existing bar with space for games, then just split the earnings. I talked to several bar owners, and it's a bitch of an industry. That was another reason we put our plans on pause.

    #54 3 years ago
    Quoted from V8haha:

    Are you independently wealthy?
    If you can support it from your other income then I’d say go for it. Being able to right off every pinball purchase is a plus. Specially if you have income from other sources that you need to shelter

    Just keep in mind that as an operator of pinball machines (not a distributor), the games would be depreciated over 5 years under the IRC. Yes, with current bonus depreciation rules you would "write off" the entire purchase in the first year. But what everyone forgets about is recapture. If you turn around and sell that pin the next year, you have to recapture the depreciation in the form of income. So yes, the initial year would likely be a significant write off, but in future years I would anticipate new pin purchases and the recapture from the sale of old games would essentially be a wash.

    #60 3 years ago
    Quoted from Honch:

    It would be tough to recapture anything on a cash deal for an item that isn't registered or titled in anyway that the govt can track.

    Well the OP is talking about running a business, not committing tax fraud. Just keep in mind that the statute of limitations for an audit when you commit tax fraud is non-existent. So maybe the best advice isn't to tell someone to pay cash and not report it.

    #62 3 years ago
    Quoted from Honch:

    That wasn't advice to the OP. I was merely pointing out the fact that things like that aren't tracked. And if you truly believe that cash businesses actually report all of their income, I have a bridge I could sell you. Cash deal of course.

    I do plenty of work for cash heavy businesses. I'm sure that they don't report everything, but that's their decision. Plus to the original point of my post, how is someone going to "write off" an asset if they never report it? Your post is non-sequitur and pointless.

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