When Growing Your Escape Room
When you got something good going, it’s human nature to want to grow it and make it better. You think about how you can make your business bigger and better, more profitable, etc. You want to scale your business. The escape room business has been no different. There are a dozen or so organizations who claim (some accurately) that when they started, there were less than a hundred escape rooms in the country. It was a nascent market. There were very few knowns back then, and everyone was doing their own thing because everything was new and there was nothing to copy.
The escape room market and the industry have matured, a little bit. Some of the early players had business oriented minds, and when they saw the opportunity, they started licensing, selling products, opening multiple locations, and franchising their brands. This has gone well for some. Not so much for some others.
Two types of people in the world
I’ve observed two prominent archetypes in the ER owner world, the creative type, and the business type. Sure, many cross and blur the line, but work with me for a moment. I see the division defined as what the primary goal was when starting their ER business, was it for fun or was it to make money? Don’t say it was both. The owner either saw a business opportunity that looked fun or they saw something fun and thought they could make a living with it. Neither archetype is better or worse, just different.
Back to the premise, if either of these roles are successful, they will each desire to scale their business. Now, this is where the business person has the advantage. They have an edge on knowing (or at least a primary focus on) how to make money. Since this was their priority, they will tend to stay out of roles that don’t make great use of their time or are not effective at. They tend to find a small crew of trusted advisors around them and hire experts to get the work done. They pick and choose what they want to do and delegate the rest.
The creative owner goes about this differently. The scaling job looks like a ton of fun. They get to make more, they get to build more, they get to create more. And here is the problem…
CREATIVITY DOES NOT SCALE.
They were keeping their first rooms going great, they had some staff, they may even be completely hands-off in their ER and freed themselves up to do other things, but it still stands that scaling creativity is not possible. The creative is just one person with limited time and resources (everyone is). Queue the music, “Let it go… Let it go…”. A creative will need to let it go to scale successfully.
This is where one of my favorite business books kicks in: “The E-Myth Revisited” by Michael Gerber (affiliate link). I wrote a blog about it here. In short, it’s a story about a talented baker who is encouraged to open up a bakery and the story of her struggles and resolution. It’s a very easy read and highly suggested for any creative type, really anyone thinking about business.
As the story goes, she opens up a bakery, enjoys early success and the joy of running her own business, but as she grows it, she becomes overwhelmed, unhappy, and making a mess of the whole thing. Worst of all, she no longer bakes. This will hit some readers right in the gut. The blog referenced above mentions the “career dungeon” which is what you’ll be in if you don’t plan accordingly.
So what is a creative type do? I see it as 3 options, but the first step in any decision-making process is to define your goals. Really sit down and determine what you want out of life. There are all sorts of options out there, and this is not the time to lie to yourself. Don’t make your primary goal to live on a private island in the Florida Keys if you aren’t willing to make the sacrifices to get there.
That may mean not seeing your family every evening, missing your kid’s games, losing your significant other, or a heart attack at 40. And money is not a goal, it’s a result. Regarding the business person I mentioned earlier, their goal isn’t money either. Their goal would be to build a business or organization to serve a purpose. Money is the tool people use to get what they ultimately want. Money is useless if there is nothing to buy with it.
Creative Types in Business
The creative types have 3 options for success when it comes to running a business:
1. Don’t scale it. Keep it small.
There is nothing wrong with a small business you can work, have an employee or two or some part-time help, and contract out everything else you can’t do effectively or don’t want to do. After a few years, you might be able to take a vacation. This is a very viable option, and more entrepreneurs should choose this option, but our culture teaches us bigger is better so many will try to climb the mountain to only be unhappy and fail. And there is nothing wrong with failure either. Just start again.
2. Find a co-founder.
I personally wish I had done this when I first started, but it didn’t happen that way. C’est la vie. It’s a story as old as time itself, most successful companies have two or more people to share the workload, and more importantly, have strengths their co-founder does not have. Steve and Steve, Bill and Paul, and Ben and Jerry. While these are examples of pairs with complementary skill sets, there are also plenty of pairs with similar skill sets. There is immense value in having a sounding board who is not your significant other, no matter what the skill set overlap or lack thereof.
3. Learn how to business.
This is far easier said than done and I’m not suggesting getting your MBA. Not many people pick up a new mindset that is diametrically opposed to their creativity in the middle of their lives, successfully. Most get by at some level, and this may be good enough. Only time will tell.
Running a business like a business person WILL BE VERY HARD for a creative type.
I personally suffer from doing things that are fun instead of things that may make money. I know the struggle. It is a balancing act.
Business Preparation for Creatives
What follows are my suggestions for the creative archetype to create an escape room which can scale:
Make the decision that you intend to scale early
It’s very easy to do the fun stuff first and not fully flesh out a plan of execution. Too many times owners get their rooms built and open, then ask questions on the FB groups like, “Is it normal to be this slow?” or “How do you market your ER?”. This is not a good sign. It’s really easy to look around and see people making money in ER. It’s a little harder to see all the ERs closing or being sold off because owners don’t usually brag about their struggles and failures. I thank the few that do, especially on FB.
1. Research your business
There are lots of ways to skin a cat if you are into skinning cats, that is. Every nugget of wisdom you gain from people you interview or every article you read is a data point, not a rule, including this data set here. Everyone has their own individual experiences, skill sets, backgrounds, etc. What worked for one person has a 50/50 chance of working for you. Learn from everyone, develop your own plan, test your theories, and execute. Find the hard data online, talk to at least 100 people in your area about escape rooms, and go to the tradeshows.
2. Execute, evaluate, learn, and repeat
Many plans fail due to poor execution. Starting an ER is just like starting any other business. It’s a lot of work and a lot of suck, and statistically, with little reward. Be prepared for a lot of work and doing a lot of things you don’t want to do. My best advice to execute well is to plan well and make sure the execution machine (you) is in good health. Exercise, eat right, get enough sleep, and take breaks. This will all help with focus which you will need. My book suggestion is “The One Thing” by Gary Keller (affiliate link). It is also an iterative process, you will try things that don’t work. Learn from your mistakes and try again.
3. Plan your finances
Gone are the days in ER when you can build a room for $10K (counting all labor), and people will show up. I can’t fathom where that would work anymore. Two things are working against you. If you are in a healthy market, you just won’t be able to compete with a room of that stature. $40K to $150K rooms are standard these days. If you are in an undeveloped market, no one will know what you are, and you won’t have customers. You will need to spend your money on marketing, education, and a spectacle.
Make sure you are adequately funded. Do not try to do this on a shoestring budget, open just one game and try to pay for the next with the profits of the first, or open with less than a few months of expenses in the bank. Your mileage may vary, but you are not likely to be profitable for a few months and likely longer.
4. Require quality construction
One of the fascinations of ER for creative people is that they get to be makers. They get to make stories, art, electronics, gadgets, mechanisms, etc. There is a large DIY contingent in ER, and this is a double-edged sword, especially to the creative person. They will be inclined to do many things themselves that they probably shouldn’t do because of their desire to create and learn.
My advice, don’t do anything for your ER that you were not proficient or expert in before you started your ER. Soapbox time. My personal background and skills are technology and entrepreneurship, so I tend to get on a big soapbox about tech in ER, especially the stuff that catches fire. I’m constantly amazed what ER owners will do tech wise in their businesses. ER owners (and sometimes the ex-fast-food employee who dropped out of high school and once played with ‘duinos a few times and is now in the prop business the owner hired) have done some downright dangerous things that put people in danger routinely. I have other blogs about this you can read. Don’t do it. Hire a professional, like someone who does this for a living.
The last scary thing I saw was a relay, spliced into an indoor extension cord (not sure if it was the hot or not), wrapped in electrical tape, run through a wood box (this was an enclosure the tech built for this purpose), in the attic of a drop ceiling, plugged into another power strip, and many other low voltage lines spliced in said wood box. To boot, the rest of the electronics were run from an old PC supply lying there next to said wood box. Hire professionals if you are not one. I’ll extend this to get permits and all the proper licenses applicable to your area.
5. Create and develop the process
This is what really determines your ability to scale. If you can develop a process to make money, and you can effectively convey that process (via documentation, videos, content, etc) and people will pay you for that process. It’s as simple as that. This may be for a game, concept, plans, a prop, software, operation, etc. This is how you scale and the earlier you start developing and documenting your processes, the more valuable your product will be.
This still applies even if you want to replicate your product yourself. Assume you wanted to make a sister ER 100 miles away. Without process, you’ll be splitting your time between the two of them training the new manager. What about a third? Are you going to constantly visit them all to make sure they are up to snuff? When you have a process, your training, your build, your operation, the way to do everything is defined, ideally to a degree where you are no longer needed. As in an ER franchise/license or product case, scale and profits could be as simple as cash in exchange for a set of documents or product. And in the former case, the product is the documents.
If you don’t have your business right, when you scale, you’ll scale your problems, not your profits.
If all of this sounds like too much work and you think you got a good handle on it, then great, it’s a hobby! I hope it’s not your only source of income, but have fun with it. It might work, it might not, but don’t try to scale it later without a lot of preparation, expense, and work. Or maybe sell smaller components that you can expertly manage. Make it your own thing and have fun with it.
In case you don’t want to scale your ER (as defined above) but want to take it seriously, then act on all of the suggestions above as if you were going to scale it. It will be a well-oiled machine, and you’ll have a profitable business, not a job.
Read part 2: How to Do Your Tech Right the First Time.
About Escape Room Techs
Founded by Gabriel Goldstein, Escape Room Techs is focused on bringing professional level tech products and services to the escape room industry and beyond for the entertainment industry. We build room and prop control electronics as well as fabrication integration, and installation services for all escape room owner needs.