Table of Content

    Do you want to start movie theater business plan

    A movie theater is a business in which you make contact with the film distributors, buy their movies and play them on a big screen for your audience in a comfortable and enjoyable environment. This business requires continuous serious work, money and time investment, resulting in the production of huge profit.

    If you are looking for a complete guide on how to open a movie theater, thoroughly read this sample business plan for movie theater including financial and marketing analysis, written for a movie theater startup named, ‘The Arena’.

    Executive Summary

    2.1 The Business

    The Arena will be a registered and insured movie theater company located in El Paso, Texas. Business will be owned by a husband and wife, Zac Martin and Enna Martin. All type of movies such as second run and first released will be played in The Arena.

    2.2 Management

    To open a movie theater and run it successfully, one should either have strong management skills or should hire an efficient manager. From the distribution of tickets to the proper seating of the audience in the hall, it’s all about management.

    Zac will be responsible for upgrading the building, managing finances of the business, and supervision. However, Enna will manage stuff like the selection of the movie, hiring staff, theater marketing, and snacks. For managing day to day tasks efficiently they have decided to hire a general manager to help them run the business.

    2.3 Customers

    After a busy and a hectic day, everyone resorts to some entertainment place to spend their evenings. So every young and adult, child and old living near to our theater will fall into the category of our customers.

    2.4 Target of the Company

    The company aims at balancing the startup costs by earned profits within just three months of the launch and generate huge profits afterward by providing the best film, best food, and best drink all in one seat.

    movie theater business plan - 3 yeaes profit forecast

    Company Summary

    3.1 Company Owner

    Zac and Enna, a husband and wife who were previously acting as managers in a multiplex company, will be the owners of The Arena. They both are graduates in management regarding domains from the same university and are skilled in their respective domains.

    3.2 Why the Business is being started

    After a three-year valuable experience in management, Zac and Enna have decided to start a movie theater of their own to serve the audience in the best way they have explored and of course to avail the opportunity of running their own company.

    3.3 How the Business will be started

    Zac and Enna will work in coordination with each other, however, they have decided to have a clear work division to avoid any sort of mismanagement. The Arena will be a movie theater comprising of four movie halls with a capacity of at least 250 people in each hall.

    A building which previously was a marriage hall, will be restored to its fullest glory and upgraded to fulfill a theater requirement. And lastly, highly customer care-oriented staff will be hired for undertaking day to day chores.

    movie theater business plan - startup cost

    The detailed start-up requirements as included in The Arena’s movie theater business plan  is given here:

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875

    Services

    To provide the services in a way you actually want to provide, you need to map their implementation even before researching on how to run a movie theater busines. Knowing the importance of preplanning Zac and Enna have enlisted their services with a little detail in their business plan for a movie theater  as given here:

    • First & Second Run Movie Presentation: During the early stages of the startup, The Arena will present already released movies to its customers.
    • Animated Movie Presentations: Animated movies will be played according to the demands of the public.
    • Sales of Snacks & Drinks: To provide its customers with a great experience, The Arena will serve them with instant and delicious snacks and drinks.

    Marketing Analysis of Movie Theatre Business

    After you have decided to run a movie theater business, the next step is to do its accurate and detailed marketing analysis. Before opening a movie theater, you have to make sure whether you are selecting the convenient location or not. Or whether you have to opt for a drive in theater business plan  or a movie theater business plan for an auditorium. In either case, this sample on starting a movie theater business plan will be a great help for you.

    5.1 Market Trends

    Despite a large competition, movie theater business has been growing since the past few years by the annual growth rate of 3.1 percent and is expected to follow even a faster growth rate in the future. According to IBISWorld, movie theaters have generated a revenue of $18 billion in 2018, employing more than 155,400 people in the United States.

    The business has its scope around the year in any climate or in any economic conditions, indicating that you won’t be at loss provided that you plan it successfully.

    5.2 Marketing Segmentation

    Before thinking about how to start your own movie theater business, you must be very clear about who will be your audience. Zac and Enna had divided their customers into three groups to focus on the demands of each group separately as given here:

    movie theater business plan - marketing segmentation

    5.2.1 Families: As The Arena will mainly be a second run released movie theater so its main target group will be the families who want a light entertainment within a walking distance or a short drive from their homes. People who seek family-oriented entertainment experience usually don’t care about watching a movie on the very first run. They just want quality and inexpensive entertainment.

    5.2.2 Young & Adults: The second category which we look up as our customers will be the young and adults who want entertainment for a slight break in their daily routines, or as a good chance to enjoy with their friends and mates.

    5.2.3 Children & Teens: The children and teens who want to have experience of watching movies in the cinemas like the other members of their families will also be our target customers. We’ll play our collection of animated and children movies for them.

    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Families 32% 11,433 13,344 16,553 18,745 20,545 13.43%
    Young & Adults 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Children & Teens 20% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    5.3 Product Pricing

    In the initial stages, we’ll price our tickets and snacks a little less than our competitors to get introduced to a wide audience. However, the prices may vary depending on the seat allocated and the price of movies.

    Strategy

    After identifying the market trends, the market demand, and the potential customers of the startup, the next thing to cater in movie theater business plan is to develop a strategy to attract those customers toward us.

    6.1 Competitive Analysis

    In all out research about how to start a cinema theater, Zac and Enna have thoroughly analyzed the market and the competitive edges they have to come up with, also given here for your help if you are formulating your home theater business plan.

    Our biggest competitive advantage is that we are starting our business in an excellent locality in El Paso, as rest of the cinemas are very far from us, and several people would prefer to have a good entertainment near to their homes and offices. We’ll have excellent management, comforting environment, and good quality snacks to serve our customers.

    Lastly, we have come up with a competitive edge which most of the others in the same business lacks. We will develop a website for our theater not for just looking at the schedule of movies but also for buying tickets and making reservations through online payment. We will make a poll every week, in which people could vote for the movie they want to see, the movie with the largest votes will be shown on every Sunday.

    6.2 Sales Strategy

    Sales strategy is the plan of how you will introduce your new business to your target customers. Considering the importance of advertisements, Zac and Enna had also included advertisements’ costs in their movie theater startup costs.

    To advertise ourselves:

    • We will sell discounted tickets for the first few months of our launch.
    • We will offer a 20% discount on the purchase of snacks and drinks for the first three months.
    • We will offer a free ticket to our customers after the purchase of six tickets in a month.

    6.3 Sales Monthly

    movie theater business plan - sales monthly

     

    6.4 Sales Yearly

    movie theater business plan - sales yearly

     

    6.5 Sales Forecast

    Considering our competitive advantages, our lower rates, and the quality of our services, our sales pattern is expected to increase with years. Our sales forecast on a yearly basis are summarized in the column charts.

    movie theater business plan - unit sales

    The detailed information about sales forecast, total unit sales, total sales is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Families 32% 11,433 13,344 16,553 18,745 20,545 13.43%
    Young & Adults 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Children & Teens 20% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    Personnel plan

    In your movie theater business plan selection, distribution of tickets, proper seating arrangements and selling of delicious snacks have great importance. What’s more important is the dedicated and customer care oriented staff which will ensure the smooth running of your business for you.

    7.1 Company Staff

    Zac and Enna have decided to initially hire the following people for the startup:

    • 2 Accountants to maintain financial records
    • 2 Sales Executives responsible for marketing and discovering new ventures
    • 4 Cleaners for cleaning the facility
    • 4 Assistants for operating the facility and regulating day to day operations
    • 1 Inventory Manager to manage the inventory needed for events
    • 1 Front Desk Officer to act as a receptionist
    • 2 Security Officers

    To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.

    7.2 Average Salary of Employees

    The following table shows the forecasted data about employees and their salaries for the next three years.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    Financial Plan

    After you have decided each and everything about your business, the last step is to estimate start up cost for a movie theater and make a detailed financial plan. Your financial plan should depict how much does it cost to open a movie theater, what are your investment group for business plan, how you will be able to balance your investments with the earned profits and much more.

    The detailed financial plan for The Arena is given here for a rough estimate.

    8.1 Important Assumptions

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    8.2 Brake-even Analysis

    movie theater business plan - brake-even analysis

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    8.3 Projected Profit and Loss

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    8.3.1 Profit Monthly

    movie theater business plan - profit monthly

    8.3.2 Profit Yearly

    movie theater business plan - profit yearly

    8.3.3 Gross Margin Monthly

    movie theater business plan - gross margin monthly

    8.3.4 Gross Margin Yearly

    movie theater business plan - gross margin yearly

    8.4 Projected Cash Flow

    movie theater business plan - projected cash flow

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    8.5 Projected Balance Sheet

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

    8.6 Business Ratios

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountants $85,000 $95,000 $105,000
    Sales Executives $152,000 $159,000 $166,000
    Assistants $240,000 $270,000 $300,000
    Cleaners $210,000 $240,000 $270,000
    Inventory Manager $50,000 $54,000 $57,000
    Front Desk Officer $41,000 $50,000 $54,000
    Security Officers $145,000 $152,000 $159,000
    Total Salaries $260,000 $294,000 $327,000

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