Business ideas
8 min read

How to Start a Profitable Escape Room Business [11 Steps]

Learn how to start a profitable escape room business with these 11+ steps. From creating themes to marketing, we cover everything you need to know.

By Nick Cotter
Updated Feb 02, 2024

image of a escape room business
This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
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1. Perform market analysis.

When launching an escape room business, a thorough market analysis is crucial to understand the competitive landscape and identify your target audience. This analysis will provide insights into industry trends, customer preferences, and key factors that can influence the success of your venture. Here are some steps to guide you through performing a market analysis:

  • Research your competitors by visiting their escape rooms, analyzing their offerings, themes, pricing strategies, and customer reviews to identify gaps and opportunities in the market.
  • Identify your target demographic by considering factors such as age, income level, and interests. Understand what motivates them to visit escape rooms and tailor your marketing accordingly.
  • Examine industry trends by attending trade shows, reading industry reports, and staying updated with technological advancements to ensure your escape room remains competitive and innovative.
  • Analyze the economic factors in your region, such as disposable income levels and entertainment spending habits, which can affect the demand for leisure activities like escape rooms.
  • Gather data on the local market size by estimating the number of potential customers within your area and evaluating the population growth to forecast future demand.
image of a escape room business

Are escape room businesses profitable?

Yes, escape room businesses can be profitable. The key is to establish a steady stream of customers through word-of-mouth recommendations and effective marketing. Additionally, maintaining a high level of quality and customer service is important to ensure repeat business.

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2. Draft a escape room business plan.

Creating a comprehensive business plan is a crucial step in starting an escape room business. It will serve as a roadmap for your venture, outlining your business strategy, financial projections, and operational guidelines. Here are the key points you should consider when drafting your escape room business plan:

  • Executive Summary: Summarize your business concept, including the unique aspects of your escape room experiences and your vision for the company.
  • Market Analysis: Research the local market, identify your target audience, and analyze your competitors to understand the demand and positioning of your business.
  • Marketing and Sales Strategy: Outline how you'll attract and retain customers, including advertising channels, pricing strategies, and sales tactics.
  • Operational Plan: Detail the day-to-day operations, including location, facility requirements, equipment, technology, and staffing needs.
  • Financial Projections: Include detailed financial statements, such as income statements, balance sheets, and cash flow projections, to estimate profitability and break-even analysis.
  • Risk Assessment: Identify potential risks and challenges your business may face and provide strategies for mitigation.

How does a escape room business make money?

Escape room businesses bring in money by charging customers admission fees to participate in the puzzle-solving activities. Room designs, props, and puzzles are potentially reusable, greatly reducing operational costs while maximizing profits. An example of a target audience for a successful escape room business could be young adults aged 18–25 who are looking to challenge themselves with unique and exciting experiences. To further target this demographic, offering discounted rates or student nights can help attract more customers to the business.

3. Develop a escape room brand.

Creating a distinctive brand for your escape room is vital in setting it apart from the competition. It's the identity that your customers will come to recognize and trust. Consider the following steps to develop a memorable and engaging brand for your escape room business:

  • Define Your Unique Value Proposition (UVP): Clearly articulate what makes your escape room unique. Is it the storylines, the puzzles' complexity, the thematic elements, or state-of-the-art technology?
  • Choose a Brand Name: Select a name that is catchy, easy to remember, and reflects the experience you're offering. Ensure it's not already in use and trademark it if possible.
  • Design a Logo and Visuals: Develop a logo and visual theme that represents your brand's essence. These visuals will be used on your website, marketing materials, and physical location.
  • Develop a Brand Voice: Decide on the tone and style of your communication. Whether it's mysterious, adventurous, humorous, or professional, ensure it resonates with your target audience and remains consistent across all channels.
  • Build an Online Presence: Create a professional website and social media profiles that align with your brand identity. These platforms should accurately convey the experience and entice potential customers.
  • Engage with Your Community: Participate in local events and online forums to build relationships and increase brand awareness. Word of mouth is powerful in the escape room industry.

How to come up with a name for your escape room business?

The name you choose for your escape room business is an important way to draw in customers and establish your business. It should be something that accurately reflects the concepts and atmosphere of your escape room. To come up with a descriptive yet catchy name, first identify key elements of your escape room theme, such as the story line or time period. Once you have identified these key elements, think of words that remind you of these features and combine them to form a unique word or phrase that sums up the concept. You could also look for inspiration from phrases taken from books, movies, or famous quotes related to your escape room's theme. Finally, view the name from a customer's perspective—the name should be easy to remember and help customers understand what to expect when they enter your escape room.

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4. Formalize your business registration.

Formalizing your business registration is a crucial step in establishing your escape room business as a legal entity. This process will vary depending on your location, but generally involves registering with state and local agencies. Here's what you typically need to do:

  • Choose a Business Structure: Decide whether your escape room will operate as a sole proprietorship, partnership, LLC, or corporation. Each has different implications for liability and taxes.
  • Register Your Business Name: If your business name is different from your own name, you'll need to file a 'Doing Business As' (DBA) name.
  • Obtain an Employer Identification Number (EIN): This is required for tax purposes and is obtained from the IRS. It's necessary if you plan to hire employees.
  • Register for State and Local Taxes: Depending on your location, you may need to register for state taxes, including sales tax and unemployment insurance tax.
  • Acquire Permits and Licenses: Check with your city or county government to find out what specific permits and licenses are needed to operate an escape room in your area.
  • Understand Zoning Laws: Make sure your chosen location is zoned for an escape room business to avoid legal issues with local authorities.

Resources to help get you started:

Access indispensable resources curated for escape room entrepreneurs featuring market analyses, operational strategies, and growth tactics:

  • Room Escape Artist: This blog and resource hub offers reviews, design insights, and industry trends crucial for understanding the escape room market. -
  • Escape Front: Dedicated to escape room owners, this site provides in-depth guides on business operations, marketing strategies, and industry reports. -
  • RECON (Reality Escape Convention): An annual convention bringing together escape room industry professionals for networking, workshops, and talks on the latest trends and best practices. -
  • Escape Room Master: This platform offers software solutions for booking and game management but also provides valuable resources and community engagement for business owners. -
  • The Escape Room Guys: A blog that reviews escape rooms globally and offers a behind-the-scenes look at successful escape room operations and design ideas. -
  • NowEscape: Offers articles and guides focusing on the operational, marketing, and technological aspects of running an escape room business. -

5. Acquire necessary licenses and permits for escape room.

Starting an escape room business requires compliance with various regulations to ensure safety and legality. It's essential to acquire the right licenses and permits before opening your doors to the public. Below are key steps to guide you through this critical process:

  • Research local regulations: Check with your city or county government to understand the specific licensing requirements for an escape room business in your area.
  • Business license: Apply for a general business license, which is the basic permit needed to operate a business in your municipality.
  • Fire safety permit: Since escape rooms often involve locked spaces, obtaining a fire safety permit is crucial to ensure all safety measures are in place and regulations are met.
  • Building permit: If you plan to modify your space with construction, you'll need a building permit. This ensures that all changes comply with local building codes.
  • Special amusement permit: Some jurisdictions may require a special amusement permit for escape room businesses due to their interactive and entertainment nature.
  • Insurance: While not a permit, obtaining liability insurance is vital to protect your business from potential claims and incidents.

What licenses and permits are needed to run a escape room business?

It depends on the state and city in which you will be located. Generally, you need a business license, an occupancy permit, and specific safety permits to operate an escape room. You may also need to obtain special permits or licenses if you plan on serving food or alcohol at your facility.

6. Open a business bank account and secure funding as needed.

Starting an escape room business requires careful financial management from the outset. Opening a business bank account is essential to keep personal and business finances separate, while securing funding is critical for covering the initial costs of setting up your escape room. Here's how to move forward with these vital steps:

  • Research banks and credit unions to find one that offers favorable terms for small businesses, including low fees and good customer service.
  • Prepare the necessary documents to open a business bank account, such as your business license, EIN, and incorporation papers.
  • Consider the type of account that best suits your business needs, whether it's a checking account, savings account, or both.
  • Explore various funding options if you need additional capital, such as small business loans, investors, crowdfunding, or personal savings.
  • Develop a solid business plan to present to potential lenders or investors, showcasing the viability and profitability of your escape room concept.
  • Investigate any grants or local small business programs that may offer financial assistance or resources for new entrepreneurs.

7. Set pricing for escape room services.

Setting the right price for your escape room services is crucial for attracting customers while ensuring profitability. It's important to consider factors such as your costs, target audience, competition, and perceived value. Here are some key points to guide you in setting your pricing:

  • Analyze Costs: Calculate your operating costs, including rent, utilities, staff wages, and marketing, to determine the minimum price you need to set to break even.
  • Research Competition: Look at the pricing of other escape rooms in your area to ensure your prices are competitive. Adjust for any differences in the experience or quality you offer.
  • Value Perception: Price your services based on the value customers perceive. Unique themes or high-tech puzzles may allow for higher pricing.
  • Dynamic Pricing: Consider implementing dynamic pricing strategies, such as offering discounts during off-peak hours or increased rates during peak times.
  • Package Deals: Create package deals for larger groups or corporate events to encourage bulk bookings.
  • Test and Adjust: Start with an introductory price, gather customer feedback, and adjust your pricing as needed based on demand and customer satisfaction.

What does it cost to start a escape room business?

Initiating a escape room business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $$24,000 (startup costs) for launching such an business. Please note, not all of these costs may be necessary to start up your escape room business.

8. Acquire escape room equipment and supplies.

Starting an escape room business requires careful selection of equipment and supplies to create an immersive and challenging experience for your customers. To ensure your escape room is engaging and operates smoothly, you'll need to acquire a variety of items, from puzzles and props to technical equipment. Here are some key components to consider:

  • Puzzles and Props: Stock up on locks (combination, key, directional), hidden compartments, and thematic decorations that align with your room's storyline.
  • Technology: Invest in electronic gadgets like tablets, computers, or specialized software for digital puzzles and room automation.
  • Surveillance Equipment: Set up cameras and microphones to monitor players and offer hints, ensuring a safe and controlled environment.
  • Lighting and Sound Equipment: Create atmosphere with adjustable lighting systems, sound effects, and background music for an immersive experience.
  • Furniture and Set Pieces: Find durable furniture that fits your theme and can withstand frequent use, as well as larger set pieces for key focal points in the room.
  • Safety Equipment: Include emergency exit signs, first aid kits, and fire extinguishers to comply with safety regulations.
  • Operational Supplies: Stock up on office supplies, walkie-talkies for staff communication, and maintenance tools for daily operations and repairs.

List of software, tools and supplies needed to start a escape room business:

  • Escape room software - Est. $200-1,000
  • Locks and keys for escape room - Est. $150-600+
  • Puzzles and props for escape room - Est. $100-500+
  • Security camera system - Est. $500-2,000+
  • Set up for physical puzzle components - Est. $50-300+
  • Electronic components (sensors, buzzers, etc.) - Est. $50-500+
  • Decorations (lighting, furniture, etc.) - Est. $200-2,000+
  • Construction materials (drywall, framing materials) - Est. $50-400+
  • Computer and network hardware (router, switches, etc.) - Est. $200-1,000+
  • Lighting fixtures and wiring supplies - Est. $100-1,000+

9. Obtain business insurance for escape room, if required.

As you embark on the exciting journey of starting an escape room business, it's crucial to consider the protection that business insurance can provide. Ensuring that you have the right coverage can safeguard your investment from unforeseen events and liabilities. Here are some guidance points to help you obtain business insurance:

  • Research different types of business insurance policies such as general liability insurance, property insurance, and professional liability insurance to understand which coverages best fit the needs of your escape room business.
  • Consult with insurance providers or brokers who specialize in entertainment or small business insurance to get tailored advice and competitive quotes.
  • Consider additional policies such as business interruption insurance, which can cover lost income in case your escape room must close temporarily due to a covered event.
  • Ensure that your policy limits are sufficient to cover potential claims and that you understand any exclusions or conditions of the insurance policy.
  • Regularly review and update your insurance coverage to reflect any changes in your business, such as expansion or the addition of new rooms or themes.

10. Begin marketing your escape room services.

Once you have your escape room set up and ready for adventurers, it's time to spread the word and attract customers. A strategic marketing plan can make all the difference in a competitive landscape. Here are some effective strategies to market your escape room services:

  • Utilize social media platforms to create buzz by sharing intriguing puzzles and behind-the-scenes content.
  • Offer opening discounts or bundle deals to encourage initial visits and word-of-mouth referrals.
  • Partner with local businesses and organizations for cross-promotion opportunities.
  • Invest in search engine optimization (SEO) to increase your visibility online when potential customers search for entertainment options in your area.
  • Encourage reviews and feedback from players and use their testimonials in your marketing materials.
  • Host special events, such as themed nights or challenges, to attract different customer groups.
  • Implement a loyalty program to reward repeat customers and encourage recurring business.
  • Engage with influencers or bloggers in your community to reach a wider audience through their networks.
  • Use targeted online advertising, such as Google Ads or Facebook ads, to reach potential customers based on their interests and location.
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What licenses and permits are needed to run a escape room business?

  • Escape room software - Est. $200-1,000
  • Locks and keys for escape room - Est. $150-600+
  • Puzzles and props for escape room - Est. $100-500+
  • Security camera system - Est. $500-2,000+
  • Set up for physical puzzle components - Est. $50-300+
  • Electronic components (sensors, buzzers, etc.) - Est. $50-500+
  • Decorations (lighting, furniture, etc.) - Est. $200-2,000+
  • Construction materials (drywall, framing materials) - Est. $50-400+
  • Computer and network hardware (router, switches, etc.) - Est. $200-1,000+
  • Lighting fixtures and wiring supplies - Est. $100-1,000+

11. Expand your escape room business.

After establishing a solid foundation and achieving success with your initial escape room venture, the time comes to consider expansion. Growth can take many forms, from increasing the number of rooms and themes to scaling the business model to new locations. Here are some strategies to guide you through the process of expanding your escape room business:

  • Analyze your success: Before expanding, assess what aspects of your business are working well. Use customer feedback and financial data to inform your growth strategy.
  • Introduce new themes and technologies: Keep your current customers engaged and attract new ones by regularly updating your rooms with fresh themes and incorporating the latest technology.
  • Franchising opportunities: Consider offering franchising options to entrepreneurs who want to open their own escape rooms under your established brand.
  • Explore partnerships: Collaborate with local businesses or entertainment venues to create pop-up escape rooms or themed experiences that can broaden your market reach.
  • Invest in marketing: A strong marketing campaign can help you reach new customers and markets, essential for successful expansion.
  • Scale operations: As you grow, streamline operations with standardized procedures and training programs to maintain quality across multiple locations.
  • Diversify revenue streams: Think beyond the room - merchandise, mobile escape games, and online puzzles can provide additional income sources.