As an escape room enthusiast, you may have dreamed about becoming the mastermind of the game by opening an escape room business of your own. Believe it or not, establishing your own escape room and making your dream a reality is more realistic than you might imagine.
If you’re ready to start the process of turning your hobby into an income source, the step-by-step guide below provides all the information you’ll need for how to make an escape room and turn a profit.
How to make an escape room: First, develop a business plan
A detailed business plan lays the foundation for your business; without it, your escape room (or any other business you might start) is almost certainly destined to fail. Developing your business plan involves in-depth research that starts online and may require you to consult with other escape room operators in your state or region. The research phase of starting a business can be tedious, but don’t rush through it—it will provide you with critical information on which to base your future decisions.
Your business plan should include specific information related to the following components:
- Costs: You’ll need to consider both the start-up and ongoing costs for running your escape room business. These costs include leasing space for your business, purchasing décor and props, obtaining a business license and insurance, employee payroll, utility costs, marketing expenses and more.
- Target market: Determine who your customers will be. Escape rooms typically attract individuals who value memorable experiences over tangible goods, as well as sports teams and corporate clientele using the escape room as a team-building activity.
- Pricing: You’ll need to set the cost of admission for individuals and groups and also decide the maximum number of people allowed to participate in a one-hour game. Where you set prices will largely determine your profit margin and how long it will take your escape room business to break even.
- Name and logo: The name you select for your business will become your customers’ first impression of your escape room, so take the time to land on the right one. Most online searches for escape room games will include the term “escape room,” so it’s advisable to include the phrase in the name of your business. Make sure the name you choose is available as a web domain and take steps to secure it right away. If you desire an eye-catching logo for your escape room, consider hiring a graphic designer unless you have skills and training in this field. A logo that’s unattractive, overly complicated or unmemorable can be worse than not having a logo at all.
Establish a legal entity and register with the IRS
Forming a legal business entity can help protect you from being personally liable in case of future lawsuits against your business. The most common small-business structures tend to be LLCs (limited liability companies), corporations and DBAs (“doing business as”). The easiest and most affordable way to establish your business entity is through an online service like LegalZoom, IncFile or ZenBusiness.
Once you’ve established your business entity, you’ll need to apply for an Employer Identification Number (EIN) with the IRS to enable federal and state agencies to monitor your tax reporting. If your business is structured as a sole proprietorship without any employees, you may not be required to get an EIN, but having one benefits you by making it easier to open credit and bank accounts for your business and reduce the risk of identity theft.
Open a bank account and credit line for your business
You should always open separate bank and credit accounts for your business, since blending your personal and business finances leaves you vulnerable to losing personal assets if your business were to be sued. It also simplifies accounting and filing taxes. Having a dedicated business credit card builds credit for your business that can help you obtain loans and other services in the future.
Find a location for your escape room
Location is one of the most important factors in determining whether your business succeeds or fails. Look for a location that gets substantial foot or drive-by traffic, offers adequate safe parking and is accessible by public transport. You may wish to consider locating near your most successful competitors, since their location has already been proven to work well for an escape room business.
Rent will be one of your main expenses, making it important to find the most affordably-priced location that still meets your needs and most of the above criteria. You may be able to save money by finding a basement space or a space with few windows or inconvenient entrances, since these features won’t impact the quality of the escape room experience. Be sure you have the flexibility to open multiple games within the space, even if you only plan to start with one.
Apply for local permits and licenses
If you open your escape room business without obtaining all the required permits and business licenses for your area, you may be slapped with a hefty fine or even shut down completely. Contact your city or county clerk’s office to find out what kind of licenses and permits you need to legally do business in that jurisdiction. Most municipalities also require an inspection of your site before they will issue an occupancy permit that confirms all building codes, zoning laws and other regulations have been met.
If you plan to play music as part of your escape room game, you will probably also need to obtain permission from the composer or license holder of each song. Most businesses opt to obtain a broad license from performance rights organizations like ASCAP or BMI allowing them to play songs from an entire catalog of artists or studios.
Protect yourself legally
Expenses add up fast when you’re launching a business, but business insurance is one area where you don’t want to scrimp. Business insurance protects you in case of an injury or other lawsuit filed against your company and is well worth the added cost.
You will also need to develop a liability waiver for customers to sign before they participate in your escape room game. A good liability waiver includes the following elements:
- Players acknowledge that they are about to engage in a physical activity that could result in injury.
- Players agree to hold you harmless should such injury occur.
- Players acknowledge having read the terms of the waiver and understand the agreement established when they sign it.
Before accepting your first customers, have an attorney review your waiver to ensure it meets local requirements and provides the necessary information to protect you in case of an incident.
Design your escape room
Designing an escape room is an incredibly daunting task. A good escape room must be challenging yet solvable, with enough complexity to keep multiple players engaged throughout the hour-long game. It should have a compelling theme that draws players into the world of the game and should include quality props, furnishings, costumes and other sensory elements to enhance that theme.
First, brainstorm some themes that you find intriguing. You could focus on a distinct historical period, such as the Revolutionary War or the groovy 1960s, or you could go with a genre like horror, fantasy, or science fiction. You should also research your nearby competitors to see what kinds of themes they are using, since you don’t want to duplicate their efforts exactly.
Once you’ve settled on a theme, it’s time to design the game. If you have no experience designing any kind of interactive game or role-playing activity, consulting with a professional is strongly advised. Many of the most successful escape room businesses in the U.S. offer consulting services for escape room startups, and they can help you avoid the most common pitfalls that can sink your escape room business. This is another area where the added cost is likely to pay off in the long run.
If you opt to do it yourself, you’ll need to take your broad theme and drill down into the smaller components of the game:
- Story or script legend: This is the overall narrative of your escape room, and all components need to stay within the boundaries of your story. For example, a Civil War-themed escape room shouldn’t include highly technological props that wouldn’t exist yet during that time period.
- Props and décor: You can shop for individual items in costume shops, antique and thrift stores and online; you can also purchase fully-equipped escape room packages with everything you need to get started.
- Puzzle plan: An escape room puzzle plan outlines each puzzle and solution and how the solutions connect to solve the overall game. To add variety to the game, include different types of physical and mental puzzles, such as hidden objects, four-digit combination locks, words with hidden messages, magnetic switches, black light puzzles, symbol substitution and codes, riddles, pattern identification, mirrors, mazes and more. Puzzles should also incorporate multiple sensory elements, including sight, sound and touch.
Install your props, furnishings and puzzles
Next, arrange your furniture, props and puzzles in the escape room to create your game. Your reception area or lobby should also be incorporated into the theme, since players’ experience begins as soon as they walk in the door. Use music, lighting, wall décor and other elements to get players excited and begin their immersion into the world of the game.
Develop a well-defined brand and marketing strategy
Your brand is more than just the name of your business—it’s your mission statement, the experience you provide to your customers and your reputation in the community. Establishing a strong brand will help differentiate you from your competitors and attract new and repeat customers.
Coming up with a mission statement clearly establishes the purpose of your escape room business and sets the standard for future business decisions. It doesn’t have to be formal or full of business jargon, but it should be clear, consistent and actionable. It should answer why your escape room exists (for example, to offer a fun, challenging and memorable experience to every customer, every time) and how you plan to achieve that vision (by providing unique and interactive puzzles, exciting themes and excellent customer service).
Remember, a mission statement doesn’t accomplish anything on its own—you and every member of your staff must know it, believe it and reflect it in all you do.
As part of your marketing strategy, you’ll need to establish a quality web presence with a well-designed, easy-to-navigate website. Unless you have experience creating websites, we strongly recommend outsourcing this task to a professional. Building good websites is harder than most people think, and too many small business owners try to cut corners by doing it themselves and end up with a jumbled mess of poorly arranged pages, bad clip art and illegible text.
A professional digital marketing consultant can develop an attractive, informative website that’s SEO-optimized to drive web traffic to your business and customers to your door.
Creating and maintaining social media accounts on Facebook, Instagram, TikTok and other popular platforms is also essential to effective escape room marketing. Be sure to add new content regularly to keep your business visible in followers’ feeds, and consider spending some money to advertise on these platforms, which can get your business in front of thousands of potential new customers.
Hire great employees and treat them well
Unless you plan to do everything yourself—which is almost impossible to do well—you’ll need a well-trained and enthusiastic staff to represent your brand and guide your customers through an outstanding escape room experience. If possible, recruit employees who share your passion for escape rooms and have experience in customer service, supplementing these traits with comprehensive training in your mission statement, values and operation.
Providing your staff with fair compensation, ongoing training and strong leadership over time will help minimize turnover and ensure a consistent experience for your guests. Remember, happy employees lead to happy customers.
Keep your customer base growing
Because players are unlikely to return to play the same game a second time, working with other escape room operators in your area to generate mutual referrals can benefit everyone’s business. You’ll also need to update your games regularly to give customers a reason to come back.
Consider offering an incentive (such as a free or reduced-price game or branded merchandise) to customers in exchange for filling out a post-game survey with feedback on their experience; use that feedback (especially any negative comments) to make changes that will improve the game for future players.
That does it for our in-depth look into how to make an escape room. We have covered the major steps that are usually required for how to make an escape room and turn a profit. Now, it’s up to you to turn that passion into a reality!