Valuing an Arcade and Entertainment Complex
The arcade and entertainment industry took a hit during the COVID-19 pandemic. Since then, the industry has experienced growth. But, home-based entertainment has also risen in popularity. As such, it is essential to know how to increase the value of an arcade and entertainment complex. If you are looking to buy, sell, or grow an arcade and entertainment complex, it is important to understand how a valuation expert looks at valuing an arcade and entertainment complex.
As a business appraiser, Peak Business Valuation often works with arcade and entertainment complexes. As part of a business valuation, Peak looks at key factors that impact the value of an arcade and entertainment complex. For more detailed information about valuing an arcade, schedule your free consultation with Peak Business Valuation, business appraiser.
Market Multiples for an Arcade and Entertainment Complex
Below are average valuation multiples for an arcade and entertainment complex. A valuation analyst uses multiples when determining the value of an arcade and entertainment complex.
- SDE Multiple Average Range: 1.65x – 3.30x
- EBITDA Multiple Average Range: 2.49x – 3.85x
- Revenue Multiple Average Range: 0.43x – 1.40x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article.
How is an arcade and entertainment complex most often valued?
A valuation expert uses a variety of business valuation approaches when valuing an arcade and entertainment complex. Often cash flow multiples – SDE and EBITDA multiples are most applicable. However, the valuation expert uses their knowledge and expertise to determine what methods and multiples for an arcade are most applicable.
Expanding your knowledge of the value of your arcade and entertainment complex will help you take steps to increase it. Here are ideas to increase the value of an arcade if you would like to grow, sell, or buy an arcade and entertainment complex. For a detailed business valuation, schedule a free consultation with Peak Business Valuation, business appraiser.
Key Success Factors
Peak Business Valuation frequently values arcades and entertainment complexes. The following success factors will help increase the value of an arcade and entertainment complex. Be sure to also check out Value Drivers for an Arcade and Entertainment Complex.
Diverse Revenue Streams
The arcade and entertainment industry is seeing increasing competition. Both within the industry as well as with home-based entertainment. Multiple streams of revenue add value to your business and increase revenue.
A strategy to increase revenue streams is becoming a multi-use facility. Ideas include activities such as bowling, laser tag, and ax throwing. In addition, many arcade complexes are becoming event centers for celebrations such as birthday parties. It is also becoming popular for arcade and entertainment complexes to have a restaurant or bar. Food and alcohol sales increase revenue.
Peak Business Valuation, business appraiser, looks at revenue streams when valuing an arcade and entertainment complex. The most valuable arcades attract more customers by offering a variety of entertainment, food, and beverages. We are happy to answer any questions you may have. Schedule a free consultation to get started.
The popularity of social media is increasing. Awesome social media pages and a helpful website add value to your arcade and entertainment complex. Potential customers turn to Google and maps to find places of entertainment. Having good SEO will increase traffic to your business. For ideas on how to increase your SEO read The Value of SEO for a Business.
Next, make sure you are the go-to place for entertainment! Locals especially loyal ones are the highest source of revenue for arcades and entertainment complexes. Increase customer loyalty by posting specials, running giveaways, and promoting various activities. Interacting with your customers frequently whether that be through social media, text messaging, or emails will increase customer loyalty. See the Value of Customer Loyalty for more ideas.
When valuing an arcade and entertainment complex, Peak Business Valuation looks at online presence, brand reputation, and SEO. These all increase the value of an arcade.
Current Economic Environment
The COVID-19 pandemic was impactful on the arcade and entertainment industry. After the decrease in revenue due to the pandemic, arcade and entertainment complexes are seeing a rise in revenue. Other economics such as the employment rate, disposable income, time spent on leisure and sports, and the cost of goods impact the arcade and entertainment industry.
A business appraiser such as Peak Business Valuation will analyze current economic conditions when valuing an arcade and entertainment complex. The business appraiser will analyze the success and risk of the arcade and entertainment complex in the current economic environment when determining the fair market value. In addition, they assess how your arcade and entertainment complex is doing compared to other businesses in the industry.
When valuing an arcade and entertainment complex there are many things to consider. Thus, if you are looking to sell, expand, or buy an arcade and entertainment complex it is essential to understand its value. A business analyst at Peak Business Valuation can provide you with a business valuation for an arcade. We are also happy to help identify opportunities to maximize the value of an arcade and entertainment complex! You can reach out to us by scheduling a free consultation!
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