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How To Start A Pool Hall In 2023

How To Start A Pool Hall In 2023

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How To Start A Pool Hall In 2023

How To Start A Pool Hall

For seasoned pool players, opening your own pool hall can seem like a fun and profitable business venture. Pool halls have been a staple in communities for decades, offering a place for both serious and casual players to show off their skills, socialize, and unwind.

Beyond just installing some tables, however, successfully running a pool hall requires careful planning and preparation. This guide provides an overview of the pool hall business and actionable advice for getting started.

Business Overview

A pool hall, also known as a billiards club, is a venue where people play cue sports such as pool, snooker, and carom billiards. Such establishments often serve food and drinks, making them popular spots for socializing. The primary source of income is usually table rental fees, charged by the hour or game. However, sales from food, beverages, and possibly equipment can significantly boost revenue.

Industry Overview

Pool halls fall under the broader category of “amusement and recreation industries,” which also includes places like bowling alleys and arcades. It’s also worth noting that the industry is relatively recession-resistant. When times are tough, people often look for affordable ways to unwind and socialize, and pool halls fit the bill nicely.

While the industry faced a temporary setback due to the COVID-19 pandemic, it’s showing signs of recovery. There are thousands of pool halls across the country catering to a wide range of demographics, from casual players to professional competitors.

Some notable trends that are expected to influence the industry over the next five years:

  • The continued popularity of league play and tournaments among recreational players is a growth driver. Amateur championships like the APA League and BCA Pool League continue expanding.
  • Billiards interest among millennials and female players has increased, broadening the target demographic. Operators may tailor offerings to these segments.
  • One of the most noticeable trends is the shift from traditional pool halls to more upscale venues. These modern establishments often offer high-quality food, a variety of drink options, and luxurious interiors. The aim is to attract a broader, more diverse customer base, including families and professionals.
  • Advances in pool table materials, cue technology, and ball design by leading brands like Brunswick and Aramith keep the sport innovative and attractive.
  • Rising wages and commercial real estate costs may squeeze operator profit margins if unable to fully pass on increased costs through price increases.

The pool hall industry is on a promising trajectory, with several emerging trends expected to shape its future. Entrepreneurs entering this space can leverage these insights to align their business models with the evolving demands of the market.

Target Market

The target market for a pool hall business generally falls into a few key demographic and interest groups:

  • Avid amateur league players: These are recreational pool players who participate in amateur leagues and tournaments, typically ranging from mid-20s to 40s in age. They frequent pool halls regularly for practice and competitive play.
  • College students: Many college-aged students enjoy playing pool casually for fun as weekend or evening entertainment. Pool halls near campuses can attract this demographic.
  • Local billiards clubs/groups: Most towns have dedicated billiards clubs that gather at pool halls for regular matches, practice, and socializing. Catering to these groups is wise.
  • Gender considerations: Traditionally, pool halls have been male-dominated, but this is changing. As the industry evolves, there’s a growing number of female pool players, and some pool halls even host women-only leagues to encourage this demographic.
  • Nightlife crowds: Bars and restaurants with pool tables attract patrons looking for nightlife, fun, and social activities. Pool halls can tap this market with trendy atmospheres.
  • Casual players: Occasional pool players hitting the tables just for low-key recreation are also potential customers.

The key is identifying the predominant pool-playing groups in your local area and tailoring the venue vibe, amenities, and marketing to appeal to their desires for competition, practice, or mere entertainment.

Checklist To Start A Pool Hall

Starting a pool hall requires more than just technical skills or love for the game. It involves understanding the market, keeping up with industry trends, and managing various aspects of a business, from securing funding to marketing your services. But don’t let this deter you. With our guide, you’re one step closer to turning your dream into reality.

Step 1: Research the Market

Market research is a critical step before launching any business, including a pool hall. It helps to reduce risks by providing insights into various aspects of the market, including competition, trends, customer preferences, and more.

Here are some cost-effective ways to gauge the market appetite for a pool hall:

  • Search for existing pool leagues and clubs online and via local connections. Reach out to organizers to learn about membership levels. This signals local participation rates.
  • Visit existing pool halls to observe their operations, customer demographics, and peak hours. This firsthand experience can give you invaluable insights.
  • Look at review sites like Yelp to see customer feedback on existing pool halls in the area. This helps identify shortfalls or saturation.
  • Your local Chamber of Commerce or Economic Development office often has resources and data about local businesses and industries. They can provide valuable information about the local market.

Step 2: Write a Business Plan

There are a few key elements that you will need to include in your pool hall business plan in order to ensure its success. First, you will need to clearly outline your business goals and objectives. What are you hoping to achieve with your pool hall? How many tables do you hope to have? What kind of atmosphere do you want to create?

Next, you will need to come up with a detailed marketing plan. How will you attract customers to your pool hall? What kind of promotions and discounts will you offer? How will you distinguish your business from the competition?

You will also need to outline your financial projections. How much money do you anticipate making in your first year of business? What are your start-up costs? What are your operating expenses? How much do you expect to earn in revenue?

Last but not least, you will need to create a detailed management plan. Who will be responsible for what tasks? Who will make decisions about the day-to-day operations of the pool hall? Who will handle customer service?

By taking the time to plan out each of these aspects of your business carefully, you will increase your chances of success and ensure that your pool hall is a profitable venture.

Related: How to write a business plan

Step 3: Secure Funding

Securing startup funding is often the biggest hurdle for new pool hall entrepreneurs. This capital-intensive business requires a significant upfront investment. Here’s an overview of typical funding sources and considerations:

Many prospective owners start by tapping into personal savings. While limited, this allows you to retain full ownership and avoid loan payments. Lenders usually want the owner to contribute 15-25% of the total startup costs anyway.

Seeking loans from family and friends is another common funding avenue. Make sure to put any agreements in formal written contracts to protect relationships.

For larger capital needs, banks can provide small business loans or SBA-guaranteed financing. However, they’ll look at your credit score and collateral before approving a loan. Lenders also expect well-supported projections in your business plan to show loan repayment ability.

If your funding needs are relatively low or if you can’t secure a loan from a traditional lender, consider microloans. These are small loans, often accompanied by business training and other support services, offered by economic development organizations.

Equity funding is also possible if you are willing to give up some ownership. Local high net worth individuals may take an interest in pool hall ventures in their community. But, this type of funding is difficult as most angel investors are looking for high-growth, scalable businesses with a strong potential for return on investment.

Related: Finding the money to start a business

Step 4: Register the Business

Starting a pool hall business involves taking care of several legal steps. These steps can vary by state but typically involve selecting a business structure, registering your business name, and obtaining necessary permits and licenses.

Business structure: One of the first decisions you’ll need to make is choosing a business structure. The four primary types of business structures are sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

  • Sole proprietorship: This is the simplest form of business structure and is easy to set up. It’s suitable for a single owner and has lower startup costs. However, it offers no liability protection, meaning your personal assets could be at risk if the business incurs debts or legal issues.
  • Partnership: If you’re starting the business with one or more partners, you might consider a partnership. Like a sole proprietorship, it’s relatively simple to set up but offers limited liability protection.
  • Corporation: A corporation is a separate legal entity that provides liability protection. It’s more complex and costly to set up and has ongoing requirements like annual meetings and reporting.
  • Limited Liability Company (LLC): An LLC combines the liability protection of a corporation with the simplicity and flexibility of a sole proprietorship or partnership.

Most pool halls operate as LLCs or corporations to limit personal liability.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming a pool hall

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Food & alcohol permits: If you plan to serve alcohol, you will need a liquor license, and establishments selling food will need food service licensing through the local Health Department.

General business licenses and permits: Depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a business license, seller’s permit, and Employer Identification Number (EIN).

Related: State guides for general business licensing

Music and entertainment licensing: If you’re planning to host live music or other performances, you’ll need the appropriate licensing. This ensures you’re legally allowed to play copyrighted material and can save you from hefty fines down the line.

Step 5: Select a Location

For one, location is key. You’ll want a spot that’s easy to find and close to your target audience. Don’t underestimate the power of foot traffic! Your pool hall might also serve as a venue for local pool tournaments, offer private lessons, or host other social events.

Then there’s the question of atmosphere. Are you going for a family-friendly vibe or a more adult-oriented setting that serves alcohol? This decision not only affects the customer experience but also your licensing needs. Speaking of which, you’ll need various permits and licenses to operate, especially if you’re serving booze or offering live entertainment.

Having sufficient capital prior to signing a lease is highly recommended. Financing can take longer than expected to secure or even be denied, so avoid committing to a costly rental agreement too quickly.

Scouting involves visiting potential spaces and analyzing them based on several factors like size, accessibility, visibility, neighborhood demographics, nearby businesses, and rent costs. Visiting other successful pool halls allows you to gather ideas for layout, lighting, equipment, decor, and ambiance.

Design and floorplan are important. Allow adequate room between tables for players and spectators. Outfit the space with a quality sound system, lighting, ventilation, etc.

Buildout often includes a bar and lounge area, so factor in necessary sinks, refrigeration, stools, and bar seating. Bathrooms should also have the capacity for large crowds.

Meeting building codes and accessibility standards is required. Be sure to work with your building code enforcement office early on to make sure there won’t be any issues that could have been prevented.

Step 6: Purchase Equipment

When purchasing equipment for a pool hall, several key considerations will play into making the best decisions for your business. The equipment you choose should not only meet your operational needs but also align with the expectations of your target market.

First, the quality of your pool tables is paramount. Your customers, whether they are casual players or seasoned professionals, will appreciate tables that offer a smooth and fair game. The number, size, and style of pool tables you choose should reflect the demographic you aim to attract. For instance, serious players might prefer professional-grade tables, while casual players or groups might enjoy larger, more social tables.

Cues, balls, racks, and other accessories also need to be of good quality. These items will undergo regular use (and potentially misuse), so durability should be a top consideration. Offering a range of cues in different weights and sizes can cater to a broader audience, enhancing the playing experience for all your customers.

Something that is often overlooked but is very important for a pool hall, is lighting. Investing in good lighting helps in creating an inviting atmosphere and ensuring the playability of each game. Each table should have its own overhead light, bright enough to eliminate shadows but not so harsh as to cause discomfort. Consider your target market’s preferences – younger audiences might appreciate trendy, modern lighting fixtures, while an older demographic might lean towards classic, traditional designs.

Seating and general furnishings should provide comfort for players between games and spectators. Think about incorporating booth seating, bar stools, or lounge areas depending on your customers’ preferences. If your target market includes families or groups, consider adding other gaming options like foosball or darts to diversify the entertainment offering.

Last, if you plan to offer food and beverages, your kitchen and bar equipment should be efficient, reliable, and capable of producing the menu you’ve designed for your clientele.

Step 7: Prepare a Food & Drink Menu (if relevant)

Creating a food and drink menu for a billiards hall can be essential to ensuring your venue offers an all-around enjoyable experience, and more profits.

Based on your understanding of your customers, space, and staffing, decide on the type of food and drinks you will serve. Are they casual players looking to unwind with friends, or are they serious enthusiasts? Will your menu be more pub-style, with burgers, pizzas, and fries? Or perhaps more sophisticated with gourmet sandwiches and salads? Similarly, for drinks, will you focus on beer and cocktails or also offer a selection of wines and spirits? Understanding this will guide you in crafting a menu that satisfies their cravings.

Oh, and let’s not forget pricing. Costing out each item accurately will help set prices that make sense—for you and your customers. It’s a delicate balancing act but necessary to protect your bottom line. Many food distributors will help new businesses with planning out a menu and costing out recipes, so don’t be afraid to ask for their help. Also, if you don’t have experience in food service, be sure to test your recipes. Make sure they are not only delicious but also feasible to prepare in your kitchen with the equipment and staff you have.

Step 8: Hire Staff

When hiring new employees for your pool hall, it is important to consider the type of person who will be a good fit for the business. There are a few key traits that you should look for in potential candidates:

First, you want someone who is outgoing and friendly. This person will need to interact with customers on a regular basis.

Second, you want someone who is reliable and responsible. This person will be in charge of handling money and equipment, so you need to know that they will take their job seriously.

Finally, if you can find someone with experience in the pool hall industry or as a manager, that would be optimal. This person can help run the business’s day-to-day operations and teach new employees the ropes to free you up to focus on running the business.

Once you have identified a few potential candidates, be sure to conduct a thorough interview process. This will help you determine if the person is a good fit for the job. You can also check references and background information to get a better idea of their character.

If you are looking to hire employees for your pool hall, keep these things in mind. By finding someone with the right personality and skills, you can ensure that your business runs smoothly and provides a great customer experience.

RelatedHiring your first employee

Step 9: Create a Marketing Plan

There are a number of ways to advertise your pool hall, and the type of advertising you choose will depend on your budget and target audience. Some effective methods of advertising a pool hall include online advertising, print advertising, word-of-mouth marketing, and hosting events.

Online advertising is a great way to reach a large number of people quickly and efficiently. Start off by creating a professional-looking website showcasing the tables, amenities, events calendar, and menu. Regularly posting high-quality images and videos of your venue, special events, and promotions can engage potential customers and foster a sense of community around your business. Also, claiming your business on relevant online directories, such as Google Business Profile, Yelp, and others, can improve your visibility in local search results and provide potential customers with essential information about your business.

Print advertising is another option to promote a billiard hall, and you can place ads in local newspapers and magazines. Word-of-mouth marketing is a more personal way to promote your business, and you can encourage friends, family, and customers to spread the word about your pool hall. Forge partnerships with local leagues, colleges, and community centers to be their official practice and tournament venue can be effective as well. Also, having tournaments and pool leagues will encourage consistent, repeat business for your pool hall.

No matter which type of advertising you choose, be sure to make your pool hall look attractive and inviting. People will be more likely to visit your business if they feel like it’s a fun place to be. With a little effort, you can successfully market your pool hall and bring in more customers.

Related: Low-cost ideas to market a new business

Step 10: Prepare to Open!

So you’ve got a solid plan, found a great location, and you’re almost ready to break the first rack. But hang on, there are likely still some steps to take before you officially open those doors. Every business has its unique challenges and requirements, and a pool hall is no exception. Here’s what you might still need to tackle:

Business insurance: You’ll want to get your hands on some good business insurance. At a minimum, this should cover general liability, property damage, and potentially even liquor liability if you’re serving alcohol. If you have employees, you will likely be required to have worker’s compensation insurance.

Bookkeeping: Proper bookkeeping is essential for any business. You’ll need to track all income, expenses, and transactions. Consider hiring a professional bookkeeper or using accounting software like Wave Accounting (FREE) or Quickbooks.

Bank account: A separate business bank account is a good idea for keeping your personal and business finances separate. It makes tracking easier and is essential for maintaining clean financial records.

Management software: Management or point-of-sale (POS) software can streamline operations. Examples include systems like CuetPOS, Square, and Clover.

Credit cards: If not already integrated into your POS system, you’ll also need a reliable credit card processing system. Popular options include Square or Stripe.

Preparing for the grand opening

Think about promotions, special offers, or events to draw people in. Maybe a tournament with prizes or special deals on the first week could stir up some excitement.

Greg’s Tip: Many pool hall owners recommend learning from others that have owned their pool halls. Finding a successful pool hall owner to mentor you can be invaluable in starting your business.

Greg's Business Tip

Common Questions When Starting A Pool Hall

How much does it cost to start a pool hall?

Starting a pool hall is not a venture for the faint of pocket. It’s not uncommon to be looking at initial costs ranging from $80,000 to $250,000, depending on factors like location, size, and the quality of amenities you want to offer. Let’s break down these numbers so you get a glimpse into where the money’s going.

Property and lease: Rent or property purchase is one of your most substantial expenses. In a high-traffic area, you could pay upwards of $4,000 in initial deposits just for the space. Some owners opt to buy property, and that’s a whole different ball game, often requiring a hefty down payment.

Pool tables and equipment: Quality pool tables can cost anywhere between $3,000 and $10,000 each. If you plan to have ten tables, you’re already looking at a minimum of $30,000. Don’t forget other equipment like cues, balls, racks, and chalk. You could end up spending an additional $2,000+ on those.

Furnishings and decor: From seating to flooring to lighting, you’ll need to invest in the atmosphere. These costs could set you back anywhere from $5,000 to $25,000, depending on the look you’re going for.

Licenses and permits: Liquor licenses, food service permits, and business licenses are required to make a business legal to operate. Costs vary by state, but you could be looking at $1,000 to $5,000 just for the permits.

Initial inventory: Stocking your bar and kitchen will be another significant outlay. Initial inventory costs could be around $5,000 to $10,000, including both alcohol and food.

Staffing: While it’s an ongoing cost, hiring staff requires an initial investment for training and uniforms, usually around $1,000 to $2,000.

Insurance: For initial insurance costs like liability and property insurance, you’re looking at around $2,000 to $4,000.

Marketing: Initial marketing, including your grand opening event, social media ads, and local partnerships, can cost between $2,000 and $5,000.

Utilities: Electricity, water, and other utility hook-ups often require deposits or initial fees. Set aside about $1,000 for these.

In addition to these costs, consider budgeting in a financial buffer. I can’t stress enough how essential it is to have three to six months of operating expenses on hand. Unexpected costs always pop up, and having that cushion can be the difference between sailing smoothly and hitting the rocks.

How profitable is a pool hall?

To estimate potential revenue, let’s consider a small pool hall with ten tables. If each table is rented out for an average of five hours per day at a rate of $10 per hour, that’s $50 per table per day. Over a month, this amounts to $15,000 in revenue from table rentals alone.

Additional revenue can be generated from food and beverage sales, as well as other services like lessons or equipment sales. For example, if your hall sells an average of $200 in food and beverages per day, that’s an additional $6,000 per month.

So, the total estimated monthly revenue would be around $21,000 ($15,000 from table rentals + $6,000 from food and beverage sales).

On the expense side, costs can include rent or mortgage payments, utilities, employee wages, insurance, maintenance, and supplies. These costs can vary widely, but using industry averages as a rough estimate, they might amount to around 60-70% of the gross revenue. Using the higher end of this range, expenses might total around $14,700 per month (70% of $21,000).

Subtracting expenses from revenue leaves a monthly net profit of around $6,300 ($21,000 – $14,700). Annually, this would equate to a profit of approximately $75,600.

It’s important to note that these are very rough estimates and actual figures can vary significantly based on many factors. There are various ways to boost these numbers, of course—like hosting events or offering memberships—but the bottom line is, a pool hall can turn a profit if you play your cards right.

What skills are helpful when running a pool hall?

Running a pool hall successfully isn’t just a game of chance; it takes a particular skill set. Here are some common skills that will be useful for the owner of a pool hall.

Business management skills: You need to understand how to manage a business effectively. This includes financial management, operations management, and strategic planning.

Customer service skills: A pool hall is a service business, so excellent customer service is crucial. You need to ensure that your customers have a great experience every time they visit your hall.

Industry knowledge: Understanding the game of pool and the pool hall industry is essential. This can help you choose the right equipment, set appropriate prices, and attract the right customers.

Marketing skills: You need to know how to effectively promote your pool hall to attract customers. This could involve traditional advertising methods, social media marketing, or hosting events and tournaments.

Networking skills: Building relationships with local businesses, pool leagues, and other community groups can help increase your visibility and customer base.

Problem-solving skills: Running any business comes with challenges, and a pool hall is no different. Being able to effectively solve problems as they arise is crucial.

All these skills, combined with passion and dedication, can contribute significantly to the success of a pool hall business.

What is the NAICS code for a pool hall?

The NAICS code for a pool hall is 713990, which is classified under All Other Amusement and Recreation Industries.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

How To Start A Pool Hall In 2023

How To Start A Pool Hall In 2023

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