Pinball Route Business Plan?


By mcbPalisade

4 weeks ago


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  • 39 posts
  • 19 Pinsiders participating
  • Latest reply 2 weeks ago by vid1900
  • Topic is favorited by 8 Pinsiders

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#1 29 days ago

Anyone ever written a business plan for managing a pinball route where you put your machines in someone else's venue?

Or a contract that you could use for same?

Thanks

#2 29 days ago
Quoted from mcbPalisade:

Anyone ever written a business plan for managing a pinball route where you put your machines in someone else's venue?
Or a contract that you could use for same?
Thanks

Yes, all true Route Operators have done so using their Lawyers they have on retainer.
A true, full-service distributor (not ones that typically sell to hobbyists/collectors) helps with business plans as well as your State branch of the AMOA. The National association as well. Join them for the help they offer.

#3 28 days ago

Just draw something up you and the business can agree on and take it to a lawyer.
The things that sound like common sense, still need to be in writing.
Probably the most important thing is
if the business closes and they start to sell off inventory to pay the bank back, you need something in writing, serial numbers receipts etc. saying these belong to you.

Have something in there about a probationary period, so you will be able to get out if it's not working out. Or they will be able to let you go if it's not what they thought for a fee if you just purchased new equipment for the place.

you might want something in there about the length of stay, 2 years, 5 years etc.. that way you can sell the venue to another op if you decided to get out. Not all locations are comfortable with terms though.

If you want to pay off the machines in 2 to 4 years. If your not able to earn enough to do that, maybe the split would go more in your favor after 3 or 6 months.

If the location wants a particular game that you know is not going to earn well, say you will be taking 75% to 100% of the machine.

you don't need to have everything in the world in the contract, it really depends IMO on the location and the owner. Is it a corporation?, is it a mom and pop shop? How well do you know the owner of the location? That being said the more you have in writing the better off you'll be.

I know this isn't what you asked but,
If your really looking to op, I would go with more then pinball unless that's what your specializing in. The only thing good about specializing in just pinball, is you can go in with other ops who don't want to deal with the headache of pinball maintenance. In my area, it seems to be a lot of them. The bad thing about specializing in only pinball is your limiting your venue choices and most locations only want to deal with one op to do everything i.e. vending, atm, pool tables etc...

anyway, good luck.

#4 28 days ago

Don't forget the upfront payment you need to give them as a non-interest bearing loan and how the split will be used to pay it back wording in the "agreement/contract"......

#5 28 days ago
Quoted from MrBally:

Don't forget the upfront payment you need to give them as a non-interest bearing loan and how the split will be used to pay it back wording in the "agreement/contract"......

Huh? Why do this?

Thanks

#6 28 days ago
Quoted from MrBally:

Don't forget the upfront payment you need to give them as a non-interest bearing loan and how the split will be used to pay it back wording in the "agreement/contract"......

Oh and don't forget a little something for the building inspectors. Then there's long term costs such as waste disposal. I don't know if you're familiar with who runs that business but I assure you it's not the boyscouts.

#7 28 days ago
Quoted from TheLaw:

Oh and don't forget a little something for the building inspectors. Then there's long term costs such as waste disposal. I don't know if you're familiar with who runs that business but I assure you it's not the boyscouts.

Not much useful information there.

This guy runs a bowling alley. I've known him for quite a few years. He takes care of the building and the rest of the arcade, I provide/maintain the PB for a 50/50 split.

#8 28 days ago

You can find example contracts of equipment similar to pinball online and modify to suit.

I strongly suggest you negotiate a 60/40 split - this is a tough way to make a living, although I know you are probably just doing this on the side. You should carry liability insurance as well.

#9 28 days ago
Quoted from mcbPalisade:

I provide/maintain the PB for a 50/50 split.

Your going to need more than a 50/50 split.

It's 75/25 in the operator's favor nowadays.

-

Also, you need your OWN liability insurance. Even if you had a contract with the Ally's owner that says he's responsible; when somebody claims that they fell and hit their head on your machine during a fight, you, the business owner, and the company that supplies the rugs, will all be sued in court.

Real court, not Small Claims, so you will need to retain a real attorney for $7,000.

-

Also if the business gets padlocked, you will never get your game back, no matter what your contract with the owner says. Accept this now. I know it's not fair.

-

Also a game's earnings declines after a few months. You have to swap it out with a fresh title. You have to watch for the decline.

-

Also, there is only so much money in a room. If one pin is earning $15 a week, adding a second pin means that each pin will earn $7 a week once the "new game" bounce is over.

#10 28 days ago

Curious, are you an operator? That's a ridiculously high profit share - although I would love that, there's way too much competition in cities with a pinball culture - that would certainly never fly in my area, and other west cost cities!

Quoted from vid1900:

Your going to need more than a 50/50 split.
It's 75/25 in the operator's favor nowadays.
-
Also, you need your OWN liability insurance. Even if you had a contract with the Ally's owner that says he's responsible; when somebody claims that they fell and hit their head on your machine during a fight, you, the business owner, and the company that supplies the rugs, will all be sued in court.
Real court, not Small Claims, so you will need to retain a real attorney for $7,000.
-
Also if the business gets padlocked, you will never get your game back, no matter what your contract with the owner says. Accept this now. I know it's not fair.
-
Also a game's earnings declines after a few months. You have to swap it out with a fresh title. You have to watch for the decline.
-
Also, there is only so much money in a room. If one pin is earning $15 a week, adding a second pin means that each pin will earn $7 a week once the "new game" bounce is over.

#11 28 days ago
Quoted from pinballkyle:

Curious, are you an operator? That's a ridiculously high profit share - although I would love that, there's way too much competition in cities with a pinball culture - that would certainly never fly in my area, and other west cost cities!

We are 80/20 out here. 5 of us operate.

#12 28 days ago
Quoted from pinballkyle:

Curious, are you an operator?

I was for 30 years.

#13 28 days ago

60/40 seems to be the norm in the PNW area.

#14 28 days ago
Quoted from smokedog:

We are 80/20 out here. 5 of us operate.

Consider yourselves very lucky. If I did that at my barcade locations, I would be replaced by the competition 'instantly'. The bar owners know what's up in my area.

#15 28 days ago

Phase 1 - Collect Pinball Machines
Phase 2 - ???
Phase 3 - Profit

Underpants Gnomes 2 (resized).png

#16 28 days ago
Quoted from Chrizg:

Phase 1 - Collect Pinball Machines
Phase 2 - ???
Phase 3 - Profit

Phase 3 is actually also ???

#17 28 days ago
Quoted from TheLaw:

Oh and don't forget a little something for the building inspectors. Then there's long term costs such as waste disposal. I don't know if you're familiar with who runs that business but I assure you it's not the boyscouts.

Maybe bribes, kickbacks and Mafia payoffs are how YOU do business! But they are NOT part of the legitimate business world! And they are certainly not part of anything that is discussed in this thread. Do I make myself clear, Mr. Law?

Now, moving on, where shall this route be operated?

#18 28 days ago
Quoted from mcbPalisade:

Not much useful information there.
This guy runs a bowling alley. I've known him for quite a few years. He takes care of the building and the rest of the arcade, I provide/maintain the PB for a 50/50 split.

I think that went over your head.

back to school (resized).png

#19 28 days ago
Quoted from vicjw66:

Now, moving on, where shall this route be operated?

How about (aboot) Fantasyland?

#20 28 days ago
Quoted from mcbPalisade:

Huh? Why do this?
Thanks

Because another operator will if it's a location worth having.

#21 28 days ago

I've read enough in this forum to know you don't make money at this. I'm just interested in help paying for the machines. Hopefully they don't get torn up too bad.

As far as things going over my head: if you can't explain please go away.

So: use Google to find examples of suitable contracts. Wish I'd thought of that ( - :

#22 28 days ago
Quoted from mcbPalisade:

As far as things going over my head: if you can't explain please go away.

You must watch Back to School...some of the posts are quoting lines directly from the movie.

» YouTube video

#23 28 days ago

Pinballs are differnt from "common" equipment. Pool tables and jukeboxes have an expected return (tons of data) that can predict future earnings, that type of equipment typically pays for itself within the first year. The "normal" split doesn't account for pinball machines. They are far more maintenance intensive, costly, and typically can't stay in the same spot for extended periods of time. That's why you don't see them everywhere. I am an operator and wouldn't even think about a 50/50 split on pinballs. Jukeboxes, pool tables, darts, ect. can expect a 50/50 split. Proprietors that have not had pins in their business need educated on why a 50/50 split will not work for pins. Most seem to understand after a talk or even after having some pins in their business for awhile and observing the amount of attention needed to maintain a pin.

#24 28 days ago
Quoted from pinballkyle:

Consider yourselves very lucky. If I did that at my barcade locations, I would be replaced by the competition 'instantly'. The bar owners know what's up in my area.

There will ALWAYS be someone willing to do something or sell something cheaper than you, in any kind of business. I'd rather have half the work for twice the money than do double the work for half the money.

The key is to differentiate yourself and your service away from just being a commodity "box of lights" placed in the back corner of the bar.

What kind of value can you offer? How else can you help drive patrons to the bar?

What other venues can you approach besides a highly competitive "barcade"? What bar would LOVE to add a new attraction to some unused space at the bar and bring in new patrons? (here's a hint: Everyone loves making more money, and there are thousands of bars out there).

Don't get fixated on the one "perfect" location. Work with owners that see value in what you are offering and are appreciative of your effort improving their business.

These are basic business principles. I'd let the dogs take the scraps and work on finding new venues that worked best for me.

#25 28 days ago
Quoted from mcbPalisade:

I've read enough in this forum to know you don't make money at this. I'm just interested in help paying for the machines. Hopefully they don't get torn up too bad.
As far as things going over my head: if you can't explain please go away.
So: use Google to find examples of suitable contracts. Wish I'd thought of that ( - :

You know what - screw the naysayers who provide opinions who haven't done this. It is a tough way to make a living, BUT doing it correctly it can be done! Even at a 60/40 profit share I've been doing this for about 4 years full time now.

I am VERY selective on my approach to operating. If I put in games at a bar, and it doesn't do a certain quota within a month or two - that's it - I pull them out. It doesn't matter if you have a 60/40, 75/25 or 80/20 profit share, a crappy location is a crappy location.

For me, the biggest expenses are:
- Cashing out and driving around locations
- Swapping games
- Repairs are NOT costly for the most part

I selectively only operate at locations where I can put a large amount of games (generally 3 or more). My route is small, but I have a lot of games out. I have a 12 game location, 7 game location, 5 game location, 3 game location and a couple other small ones. I try to bring people out to my locations, as they have more games, and better playing games compared to putting 1 or 2 games out at a bar in a corner.

Putting these games in clusters cuts down LOTS on cash outs, driving, and swapping games as there are many games at the location. Also, I price all my games at $1 a play, anything less is just crazy! Also, you have to turn and burn your games - games that don't earn, get rid of them and buy something else.

If you treat your games like it's a hobby, the business will follow that road. If you treat the games like they are vending equipment intended to make money, that's how you will succeed.

#26 28 days ago
Quoted from mcbPalisade:

I've read enough in this forum to know you don't make money at this. I'm just interested in help paying for the machines. Hopefully they don't get torn up too bad.
As far as things going over my head: if you can't explain please go away.
So: use Google to find examples of suitable contracts. Wish I'd thought of that ( - :

I read the comment as 50/50 split, at a bowling alley. Bowling a split. Play on words...Maybe that was it?

#27 28 days ago

Don't forget about leagues and tournaments. People put money in the machines, keep the people happy.

#28 28 days ago

I was pretty clear that tournaments would help. Plus signage as this is an existing arcade (mostly kiddy redemption stuff) The owner actually advertises the arcade on local TV and says it brings in $10k/month

The site does have a bar but it isn't very well run and on the other corner of the building so I wouldn't consider it a barcade although there are drinks available.

It was recommended that if I were to have 3 machines, they should be MMR, New Star Wars Pro, Walking Dead Pro

#29 28 days ago

I'm curious about this too, I have an open opportunity to place some pinball machines in locations owned by the city, however they are talking about public bids and such before they can agree on a contract for me. I'm not even familiar with this sort of thing, when dealing with a public government entity, anyone have advice on what to be wary of? The split was the first thing we agreed on, they immediately accepted Vid's suggestion so apparently they are decently aware of maintenance vs profit. They also shared with my what previous arcade games have made in locations so I have a general idea of what it might pull in. Only issue is because it is city-owned these places are always public and rarely if ever supervised.

#30 28 days ago

That's REALLY high risk. Break in's of your games, or outright theft of the machines.

Quoted from Isochronic_Frost:
I'm curious about this too, I have an open opportunity to place some pinball machines in locations owned by the city, however they are talking about public bids and such before they can agree on a contract for me. I'm not even familiar with this sort of thing, when dealing with a public government entity, anyone have advice on what to be wary of? The split was the first thing we agreed on, they immediately accepted Vid's suggestion so apparently they are decently aware of maintenance vs profit. They also shared with my what previous arcade games have made in locations so I have a general idea of what it might pull in. Only issue is because it is city-owned these places are always public and rarely if ever supervised.

#31 28 days ago

Even when supervised, games get stolen all the time.

In broad daylight, two guys with uniforms will walk into the laundromat, grunt to the bored employee that they are bringing in the new machine, and walk out with the Walking Dead.

The owner, if he even notices that the game is gone, will be told by the employee that "they are bringing a new game".

When the Op finally comes to empty the till two weeks later and finds the game gone, the employee will say "Two guys, hats, uniforms, dark hair, that's all I remember" .

You turn it in to your insurance, and buy the latest game.

You can't lose sleep over it, games are going to get stolen.

#32 28 days ago

The moment you deploy your new games, make sure you put the word out.

Update the Pinside PinMap that same day.

Update PinMap every few months when you change the games.

Update your local Facebook pinclub that the new games are up and playing.

Update https://pinballmap.com/ the same way.

Put up some signs and have a tournament. Make sure 1/2 the proceeds go to a children's charity so you can avoid being charged with gambling. PROMOTE on every social media you can.

#33 28 days ago

Make sure you check with the city to see if you need a license. Many large cities charge a per machine fee, and have stickers that need to be displayed.

#34 28 days ago
Quoted from vid1900:

The moment you deploy your new games, make sure you put the word out.
Update the Pinside PinMap that same day.
Update PinMap every few months when you change the games.
Update your local Facebook pinclub that the new games are up and playing.
Update https://pinballmap.com/ the same way.
Put up some signs and have a tournament. Make sure 1/2 the proceeds go to a children's charity so you can avoid being charged with gambling. PROMOTE on every social media you can.

It would just be for fun in my case. I'm looking to put some games out to spread pinball, if I break even that's good enough for me. Lots of kids come to these areas for multiple reasons. I'm just curious if the insurance is going to be more expensive than the machines and everything involved with them... There are some arcade games currently on location and they've been there for a few years now with no issues. They have cameras and all that.

#35 27 days ago
Quoted from vid1900:

Even when supervised, games get stolen all the time.
In broad daylight, two guys with uniforms will walk into the laundromat, grunt to the bored employee that they are bringing in the new machine, and walk out with the Walking Dead.
The owner, if he even notices that the game is gone, will be told by the employee that "they are bringing a new game".

Or to leave no suspicion whatsoever, come in with a SFII to replace the new Stern. Noone would think that a thief would actually swap out games.

#36 27 days ago
Quoted from vicjw66:

Or to leave no suspicion whatsoever, come in with a SFII to replace the new Stern. Noone would think that a thief would actually swap out games.

Ooh that's crafty!

#37 27 days ago
Quoted from vicjw66:

Maybe bribes, kickbacks and Mafia payoffs are how YOU do business! But they are NOT part of the legitimate business world! And they are certainly not part of anything that is discussed in this thread. Do I make myself clear, Mr. Law?
Now, moving on, where shall this route be operated?

I have been in the Coin-Operated Amusement business for 25 years . It is a rough business. My competitors have attempted to bribe my accounts many times. One such offering of $ 10.000.00 to throw me out of my largest account happen about 10 years ago. I had to counter the location owner with $ money of my own to retain the account. It was a very large and profitable account . I sill have equipment to this day and three owners later . The issue is that location owners do not want to sign a binding contract . And I had to migrate my small niche market 0f Pinball into doing all amusement devises . And take over the entire account providing all forms of coin -op devises to be competitive . Good luck . Just remember your on call 24/7 and be ready to make your Coin Operated business your life .

1 week later
#38 20 days ago
Quoted from vid1900:

Your going to need more than a 50/50 split.
It's 75/25 in the operator's favor nowadays.

is this just for pins or everything?

Quoted from vid1900:

Also, there is only so much money in a room. If one pin is earning $15 a week, adding a second pin means that each pin will earn $7 a week once the "new game" bounce is over.

new game bounce? you mean adding the latest every time?. wish I could, pinball is to expensive nowadays. I'm learning to wait till it's a recognizable license that's generally liked by the majority. Wish I could get what I wanted, but most the time the two don't coincide.

games with longer ball times seem to do a lot better. Most casual players (which make up 90% of my drop) aren't very good, which means they don't want to feel like they have been cheated when the game is over in 30 seconds.

sometimes unlicensed can do good to, but when your spending 6-8k per machine I'm finding it harder and harder to take that chance.

Though I did buy TNA which does the exact opposite of what I'm going for.

Quoted from smokedog:

We are 80/20 out here. 5 of us operate.

holy shit

#39 20 days ago
Quoted from hocuslocus:

is this just for pins or everything?

You can do a lower ratio on pool tables and crane games, but on Keyhole, Raz-or-cut and Pins, get at least 75% or you will lose money.

Quoted from hocuslocus:

new game bounce? you mean adding the latest every time?.

A new game will have a **bounce** that makes it have a larger than normal draw for the first month or so.

We used to put 4 KISS games side by side when they were new, and players would be 4 deep behind each machine. As the novelty wore off, we dropped it to 3, then 2 and finally a single machine per location.

After about 6 months, even a great earner like KISS would start to decline, and we would move that game to another location and bring in **fresh meat** to the existing one.

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