In the 1970s and 80s, roller skating was considered a great way of passing time.
People would go into roller rinks to socialize and spend time with their friends and family, thanks to the generous labor laws and the disco age.
Unfortunately, the hype went down when inline skating emerged and for the past couple of decades, roller skating only exist among teenagers and young children.
However, that is not to say starting a roller skating rink will be a total failure.
Thanks to the rebirth of nationwide semi-pro leagues, roller derbies, and the recent pandemic, older people are now inspired to get into roller skating again.
This has made many entrepreneurs set up roller rinks as profitable businesses.
But are roller skating rinks profitable?
Are Roller Skating Rinks Profitable?
Today, roller skating is not as popular as it used to be, and this makes it challenging for roller rink owners to make a decent profit.
The greatest barrier to entry is the enormous cost of starting the rink and even if the rink is already set up, the maintenance cost is huge as well.
Additionally, there is a big issue in the turnout of skaters at the rinks. These rinks are mostly busy on weekends, meaning that owners have to find ways of compensating the empty weekends like hosting events such as skating derbies or hockey classes.
To understand the profitability of roller rinks, you must look at the numbers and learn the different ways of making more profit from this business.
How Much Does It Cost To Start Up A Roller Rink?
Most entrepreneurs have a hard time getting the capital for starting up a roller-skating rink.
Depending on whether you want to build your own or purchase an existing rink, the start-up capital ranges between $1-$3 million.
This does not include the renovation, health insurance, and state authority licensing costs. You may end up spending about $30,000 or more on the initial setup of the rink.
Below is an estimated breakdown of expenses that you need to consider:
- Equipment – $8000
- Renovation – $9500
- Legal – $1500
- Rent (if relevant) – $4000
- Insurance – $2000
- Consultants – $2000
- Stationary – $500
- Website – $1500
- Brochures – $1000
If you own a parking lot, you can save yourself a lot of money, but the lot should be twice the size of an actual rink and located in a densely populated area so that people can experience other nearby facilities.
You also need to consider the rink floor that you want to have as it will affect the required capital. Concrete floors are cheaper than wood floors and they offer different experiences.
Wood floors don’t hurt as bad as falling on concrete and they offer more grip, but concrete rinks are easier to do spins and powers.
How Much Does A Roller Skate Rink Need To Break Even/Make Money?
To break even or make your money back, you need to have a turnover of approximately $35,000 per month.
How Do Roller Rinks Make Money?
The good news is you can diversify your roller rink business to bring you at least $1,000 per day. The following are some of the ways your roller rink can make you money:
- Entry fees – this is the main and most obvious source of income for all roller rinks. Entry fees bring a significant amount of money into rinks, after all, you cannot be allowed to enter a roller rink without paying an admission fee.
- Snack bar – most roller rinks have snack bars that sell drinks and food, and people can get something to eat as they skate. Snacks and refreshment stands should be included in any roller rink business plan as they have a huge impact on the profitability of the business. To boost sales, some arcades also have a liquor license.
- Skate rental – most skaters whether beginners or professionals don’t bring their skates to the rink. Therefore, if you offer skate rental to these people for about $10, you can make a lot of additional profit for your rink business.
- Skating lesson – to bring extra income to the business, most rinks provide private coaching on how to excel at hockey or roller skating. This is a good source of income because most skaters are willing to pay a premium to improve their skating skills.
- Skate sale – in addition to renting roller skates, you can set up a shop that sells skates and other skating equipment. Selling skates have a huge profit margin, hence a great addition to the business.
- Birthday parties – most, if not all roller rinks offer birthday services to people who love the sport and want to celebrate their special day in a roller rink. It may be a lot of work, but it is worth the effort because it is profitable enough.
- Video games – you can also add a video game arcade if you have enough space. Even though video games bring about a dollar at a time, the money adds up quickly and will contribute to the overall profits of the business in the long run.
How To Maximize Your Chances Of Making Profit As A Rink Owner?
The following are some of the things that you can do as a roller rink owner to ensure that you are profitable throughout the year:
- Heavy advertising – letting people know that your business exists is the easiest way to get them to your door. Advertising in newspapers, online, and making use of coupons can help increase traffic in your business. Invest in social media marketing too as a great way to attract young customers.
- Understanding your target market – when doing any type of business, you should find your target audience and work towards providing them the best products and services, and a roller rink is no exception. Are you a family-friendly or punk-rock derby rink? Focusing on one demographic works better in terms of profitability than pleasing everyone.
- Choose a location that is at least 30 miles from other rinks – this may not apply to areas that are densely populated. However, if your area is sparsely populated, ensure that you are far apart from another rink because there are not enough people to support more than one rink.
- Choose a place with lower rent rates – most roller rinks that are profitable pay about $4,000 or more per month for rent. This may not apply if you want to open a rink in New York or Los Angeles, but it can work in most suburban areas.
Steps For Opening A Roller-Skating Rink
Now that we have seen how you can make a profit from a roller skating rink, this section will answer the question: how to open a skating rink?
Step 1: Plan the Business
The first step to owning a successful roller rink business is to have a clear plan. This will help you to come up with the specifics and discover the unknowns of the business.
There are various things that you need to consider when creating a business plan such as the following:
- The costs involved in setting up a rink.
- The ongoing expenses for maintaining a rink.
- The target audience for your rink.
- Ways in which the rink will bring you money.
- How much are you going to charge the customers for products and services in your rink?
- The amount of profit the rink can bring and how to increase the profit.
- The name of your roller rink business.
Step 2: Form a Legal Entity
You should establish the type of business structure your rink is going to be so that you are protected from being personally liable in case the business is sued.
It can be a sole proprietorship, partnership, corporation, or limited liability company (LLC).
Step 3: Register for Taxes
Before opening your roller rink business, you need to register for various federal and state taxes. To register for taxes for your business, you need to apply for an Employer Identification Number (EIN) through the IRS website.
Depending on the type of business structure you choose for your business, there are different options in which your business will be taxed.
Step 4: Open a Business Bank Account and Credit Card
To ensure that you have personal asset protection, you need to use dedicated business banking and credit systems in your rink venture.
When you mix business and personal accounts, your assets such as your car and home are at risk if the business is sued.
Additionally, getting credit cards in your business’s name means that you have access to higher lines of credit, better interest rates, and many more.
Opening a business bank account separates your business’s assets from personal assets and makes tax filing and accounting much easier.
Getting a business credit card helps you separate business and personal expenses by putting your rink’s expenditure in one place.
A business credit card also builds the credit history of your venture which is useful for investment and raising money later.
Step 5: Set Up Business Accounting
Recording the various sources of income and expenses is important in understanding the financial performance of your roller rink.
Keeping detailed and accurate accounts also makes your annual tax filing simple and easier.
Step 6: Obtain Permits and Licenses
If you fail to get the necessary licenses and permits, you may end up paying huge fines or the business can be shut down.
Research on how you can register your business in your local area by checking with your city, town, or county clerk’s office.
If you will be selling food in your rink, you need to pass a health inspection and get licensing from the local health department.
If you intend to sell alcohol, you should get a liquor license. To play music at the rink, get yourself music licensing.
You also need a liability waiver because customers will be in a high-risk environment. Finally, a Certificate of Occupancy (CO) will confirm that all the zoning laws, building codes, and government regulations have been met.
If you are leasing the rink, it is the job of your landlord to get a CO but if you own the rink get a valid CO from the local authority.
Step 7: Get Business Insurance
Your roller rink business needs to be insured for you to operate lawfully and safely. Getting Business Insurance will protect your business’s financial status in the event of a covered loss. Different insurance policies cover different risks for businesses.
If you do not know where to start, go for General Liability Insurance. Another insurance policy to invest in is the Workers’ Compensation Insurance especially if your rink will have employees.
Step 8: Define Your Brand
Your brand refers to what your business stands for and how the public perceives the business. You must have a strong brand so that you can stand out from your competitors.
Begin with a grand opening celebration by advertising it on fliers, mailers, radio stations, and community newsletters and offer special prices for a specific period.
For long-term success, build relationships with church groups, civic organizations, and school representatives. It is also good to be a member of the International Roller-Skating Association.
Find ways to keep customers coming back to your rink such as offering a safe, clean, and wholesome experience, as well as prioritizing customer service.
Step 9: Create a Business Website and Social Media Accounts
After defining your brand, you should create a website for your business. You will use the website for bookings, selling skating products, posting important information and upcoming events in your rink as well as recording customer feedback.
The best brand awareness tools are through social media marketing. Create Instagram, Facebook, Twitter and Tik-Tok accounts and start posting content to attract new potential customers.
Step 10: Set Up the Business Phone System
To successfully separate your personal life from the business, you need to get a phone set up.
A phone system will give your business legitimacy, make it more automated, makes it easier for your customers to reach you, and book spaces.
Skills And Experience For Building A Successful Roller Skating Rink
To ensure that all your customers have a safe and positive experience, you need to understand all the various facets of skating.
You should design the rink so that all skaters can interact without getting in the way of each other. Expect beginners to have questions about everything including the different types of skates and skating techniques.
A roller rink business requires you to interact and communicate with day throughout the day, therefore, you should be good and patient with people. Most rinks benefit from providing extra recreational activities as well as drinks and food.
So, experience in the service industry and a creative mind would be beneficial. Strong marketing and business skills will also be important to your business success.
Starting and running a roller-skating rink can be overwhelming and unlike a regular business, there are a lot of challenges that you need to overcome to make a decent living out of it.
Even though diversification can attract more customers and bring in more profits, you cannot break even in under one or two years.
However, this does not mean roller skating rinks are not profitable. Roller skating is here to stay, and most people will be looking for roller rinks in the coming years.
All you need to make your roller rink profitable is to acquire an in-depth business and skating knowledge and take a long-term interest in the sport.