selling your entertainment center

Selling Your Entertainment Center – Ten Tips to Add Value to Your Center

Ten Tips to Add Value to Your Entertainment Center

As Seen on Page 42 of Tourist and Attraction Parks

Whether you are ready to sell your center now or you are years away from retirement, you should always know what your long term plan is. Here are ten tips to add value and increase the selling price of your business:


ONE | FOCUS ON YOUR EARNINGS VERSUS SALES. Don’t prioritize sales revenue over your business earnings. All things being equal, a company with $3 million in total revenues and $450,000 in net operating income will be poised to sell for the same as a company with $4 million in total revenues and $450,000 in net earnings. While growing your sales, also work on becoming more efficient to increase your earnings and improve the overall value of your business.


TWO | CREATE ADVANTAGES FOR YOUR BUYER. Exploit your points of differentiation. What makes your center more attractive than others? Also, focus on obtaining recurring revenue opportunities such as annual contracted sales and events or exclusive agreements and loyalty programs.


THREE | KEEP YOUR INCOME STATEMENT CLEAN.  For example, expensing capital replacement items such as a POS system could help reduce tax liability, but from a valuation perspective will reduce overall value.  As such, you should keep equipment and asset transactions on the balance sheet.


FOUR | DOCUMENT YOUR ADD-BACKS. If you are writing-off a few personal expenses through your business document these, and at least you’ll be able to negotiate to have them included in earnings. If not, remember that you can’t have both personal write-offs and enjoy the benefit of a high selling price.


FIVE | REMEMBER, TIMING IS EVERYTHING. The best time to be a seller is when your business has three years of increasing sales and earnings.  Be an active participant in the sales initiative and keep the sale process moving forward. Declining sales are the enemy of every business’s future and every deal.


SIX | FIND THE RIGHT BUYER. Know what types of buyers will derive the greatest benefit from the acquisition of your entertainment or bowling center. Once identified, seek out multiple buyers in that group but do not fully discount other interested parties.


SEVEN | NEGOTIATE WELL. Do your research. Learn about each buyer and what motivates them. Understand the entire selling process and what to expect at each milestone and stage. Know how and when to create bargaining “chips.” Understand when to address the negatives in the center. Expect setbacks. Keep your cool. Keep the process moving forward. Resist the temptation to talk first. Never assume. Be hard on issues and soft on people.


EIGHT | WORK WITH THE RIGHT PARTNERS. Trying to sell your business while keeping it running at the same time can be a daunting task. Having trustworthy and knowledgeable partners that are familiar with the process (deal structure, taxes, terms, negotiating, etc.) gives you a sounding board. It will also help make the process more manageable and efficient.


NINE | ASSESS THE OVERALL STRENGTH AND VIABILITY OF YOUR CENTER. Consider the following questions. Answer them honestly. Would you file them under the strength or weakness category for your business? Asses the weaknesses and determine if and how you can improve them before selling. See them as opportunities to increase your strengths. Use your strengths to promote your center to potential buyers.


  • Does your business have a consistent historical record of growth and profitability?
  • How many years have you been in business? Longer is better because you are an established business with a trackable history.
  • Does your business have substantial hard asset value?
  • Do you have accurate and timely financials, tax returns, and records to share?
  • What is your motivation for selling (e.g. retirement)? Make sure it is easy to understand.
  • Do you have a strong and stable management team? Is the Owner critical to operations or not? If your business cannot function without you, this is a weakness.
  • How many family members or partners are in the business?
  • Do you have low employee turnover?
  • Where are your opportunities for growth and improvement? Making changes before selling or having a plan to share can help your buyers.
  • Do you have a broad and diverse customer base (e.g. age, gender, demographics)?
  • Do you have loyal and long term customers?
  • What are your competitive advantages?   
  • Do you offer proprietary or exclusive services?
  • Is your facility, equipment, and other assets well maintained? Are they outdated?
  • Do you have a good location?
  • Does your entertainment center have ongoing marketing and customer outreach campaigns?
  • How much debt does your center have? Could you find better lease terms? Do you have loans that you can refinance with more favorable terms?
  • Is the property (building and land) included in the sale?
  • Are you willing to add value to the deal and wait for the return through seller financing?


TEN | ATTRACT THE BUYER. A good sale offering package is irreplaceable. Have a plan, be prepared, know what you’re offering. Working with Business Broker or a referral source will help extend your network.



About the Author: Ben Jones has owned Family Entertainment Centers for more than 23 years. Prior to joining Live Oak Bank, Ben played a key role with IAAPA expanding FEC programming and counseling FEC members on business practices. His previous experiences include President of RECreation & Entertainment Consultants, Inc. (“REC”), which provides advisory and strategic development, management, and training services to developers and planners operating within the entertainment industry. Ben, as one of the Three Amigos also hosts the EC industry’s most exclusive conference gathering, the F2FEC Experience.