Attempting to Reconnect (A R )

Gaming Lounge
Multiplayer in real life
Level 1: Executive Summary
Company Background

Contact Information
Timothy F. Perez

Business Description: Gaming Lounges are the next level of internet cafes .
Attempting to Reconnect (A R ) Gaming Lounge is equipped
with the latest video game titles for PCs and consoles- the perfect
destination for casual and serious gamers alike. Our dedicated lounge and
staff will change your perspective on gaming experiences with others by
bringing the social aspect of gaming to real life.
Business Model: Gaming Lounges provide the source of social interaction
beyond the screen at home through tournaments, meetups, and live
spectating events. Through monthly membership fees and events our
customers will be obtaining the value of competition, learning, and sharing
their passion of gaming with others.

timfperez@gmail.com
A R Gaming
Lounge

Burlington Plaza
1551 Niagara Falls Blvd
Amherst, New York
14228

Year Founded
2014
_____________
Investment
Opportunity
$270,729

Market Opportunity

Opportunity: In 2013 over 32 million people tuned in to a live World

Championship match for a professional gaming competition. This proves Annual Operating
that the gaming market is skyrocketing with the popularity of competitive Costs*
$467,000
gaming.
Target Market: The average online gamer is between the ages 15-35 which
is defined as the generation Y population. Of the 15-35 population we will
target gaming communities within a 50 mile radius of the business
location.

Annual Sales*
$504,000

*Projected

Industry Overview: The Video Game Industry is a 10.5 Billion dollar

industry. Currently massive multiplayer online games are the most
significant. This market is searching for open communication in strategic
team based games through real life teamwork.
Proposed Financing Plan
The proposed business requires a start-up capital of $300,000. The start-up
will cover all one-time costs such as: the renovation of the facility, equipment,
and licensing. It will also cover the monthly expenses for the first 3 months.
The funds will be achieved through an investor for equity within my company.

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Level 2. DESCRIPTION AND

ANALYSIS OF THE BUSINESS
A. Rationale and marketing research
Attempting to Reconnect Gaming Lounge reaches the untapped
niche market of gaming communities in the United States video gaming
industry, which makes about 10 billion dollars annually. Based off of
secondary research collected, online gaming is continuously increasing in
popularity with top industry games such as League of Legends, DOTA,
Hearthstone, and Counterstrike. Electronic sports (e-sports) industry
leader, Riot Games, recorded over 32 million people watching the League of Legends Season 3 World
Finals competition.
Due to this large scale of popularity, there is not only a substantial
impact of gaming but also growth in gaming communities. According to
ESRB (the company that assigns ratings for video games and apps) the
average gamer is between 18-34 years old; therefore, it is logical to argue
that the average gaming community member is within Generation Y (1835). Gaming lounges have transformed and evolved from the Internet caf
into a social craving for the gaming community. With the new top gaming
industry category, Team Based Strategy, and the demand for real life social
interaction, it has inspired me to start up Attempting to Reconnect Gaming Lounge as a business owner.

B. Introduction
Gaming lounges originated in Asia as internet cafs providing internet access to families who did not
necessarily have internet access at home; however, the internet cafs quickly evolved into gaming
lounges after more of the gaming community used the cafe as the go to spot for meetups and
competitions. The gaming community recognized that internet cafes bring people together because of the
products that they provide such as LAN Centers. This especially appealed to the gamers searching for the
social aspect with online multiplayer games, because of how the gaming industry is turning more into
team based competition and how gaming lounges incubate this teamwork. A R gaming lounge
provides everything these gamers are searching for including an industrial underground look with charcoal
gray walls, and neon red and blue lighting shown above.

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C. Self-analysis
Ive been a gamer for over 10 years now and within those years Ive been a leader in several gaming
communities and competed in many online competitions. My love for gaming came from my loneliness at
home, being the only boy in the family and not being able to connect with the interests of my two older
sisters growing up. Loneliness and the desire for more social interaction with people of similar interests
is the reason behind Attempting to Reconnect Gaming Lounge. Through my leadership roles of the
business organizations within my school and community I have significantly developed and recognized my
strengths in relation, restoration, ideation, and individualization. According to Gallup Strengths Find Test
my strengths contain the following attributes: Putting my thoughts into actions, finding connections
between seemingly disparate phenomena, figuring out how different people can work together
productively, finding deep satisfaction in working hard with friends to achieve a goal, and
recognizing/figuring out problems and resolving them.
Outside of school and clubs I am working part-time which allows me to gain hands on experience
within the work world and integrate the strengths I have developed from ethical business practices.
Working 30 hours per week developed my time management skill to correlate with my rigorous
coursework at school, and continues to bring me to a new learning experience every day through innovative
solutions.

D. Analysis of the business opportunity, customer and location

A R Gaming Lounge targets middle-class income gamers that live in or travel daily to the western
side of Amherst. According to Movoto, a marketing research real estate company , Western New York is
one of the most vibrant and populated areas for millennials.
New York is the state with the most video game releases- and the best place to open a gaming
lounge, is to open it in a well-known gaming area where there are gaming communities that have formed
their own culture within the community. After calling, Chase Darling from DDR Corp- a realtor in the area,
there is a 7000 square foot storefront that is available for lease at $5400 per month in rent in the heart of

Amherst and Buffalos Highest Traffic Shopping Area.

E. Proposed organization
I

will run my business as a Public Benefit Corporation (PBC) in order to do so I will find an investor. PBCs are
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defined as public benefit corporations and benefit corporations that allow for public benefit to be a charter
purpose in addition to the traditional corporate goal of maximizing profit for shareholders. As a PBC one of
the advantages is that I am only responsible for the amount I invested. It is also relatively easier to raise
funds as a corporation because of equity being a sellable asset to investors. As a PBC I will attract talented
employees because of the size and reputation of public benefit.
First off I will hire one manager whose responsibilities will include reporting back to me on daily
operations and overall workflow. I will hire 10 employees 5 full-time and 5 part-time workers. Next I will
hire two event coordinators with different backgrounds, great at sales, and are competitive they will be
responsible on coordinating the indoor and outdoor event inquires. The process for hiring will first be
conducted through applications, which will be posted on A R s Facebook page. The manager and I will
interview the potential employees. Video Guidelines and an employee handbook will be created for our
employees to read and watch before personal training. As an owner I will still be responsible for any legal
matters or for any debts- but also be a floor manager responsible for daily operations. The employees are
trained prior to the store opening, and employees hired after opening will receive on the job training. Ideal
employees live around the Amherst area, be gamers, and have knowledge of industry trends. All

employees will reflect hospitality, positive customer service mindset, and a cheerful personality for the
clientele. Our mission is to have informative, knowledgeable, cheerful, and people friendly employees.

Figure 1- intended architectural layout interior render

Level 3. PROPOSED MARKETING/PROMOTION PLAN

A. Proposed product or service
All first-time customers will have to create an account in order to use the facility. From there you
either pay by the hour PayPlay (prices shown in figure 2) or purchase a one month membership fee of
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$100 for unlimited hours, discounted meals, priority entry to tournaments, and a members access pass
to a private area in the store. After purchasing the desired amount of hours the
customers then have access to the latest gaming consoles and PCs in different
designated areas shown below (see also figure 1 on page 4).

Figure 2- Pay2Play hours will be

added to account after purchase.

The features of these gaming areas are, but not limited to: high

performing equipment, designated staff for troubleshooting any problems, and a diverse selection of
console games. Some of the benefits include: No interruptions during the game (no lag time),
comfortable/quality equipment, and meeting or exploring different gaming communities. A R will also
offer potential disruptive future technology consoles as well such
as the Oculus Rift- that no other gaming lounge is doing. A
disruptive innovation defined is as an innovation that helps create
a new market and value network, and eventually disrupts an
existing market and value network (over a few years or decades),
displacing an earlier technology. A R Gaming Lounge invests in
disruptive technologies and is an early adopter that significantly

Figure 3- Intended layout of snack bar area

sets ourselves apart from all of the competition, by giving its members an experience that is highly limited
and competitive to obtain.

Gamers always get hungry whenever they're playing games to meet

this demand A R will provide a snack bar (Figure 3) that includes food
and drinks. Example menu items include the following: hotdogs, paninis,
pizzas, chips, candy, soda, Arizona teas, juice, and energy drinks.
Furthermore, A R will also be hosting large events such as corporate
outings, bachelor parties, birthday parties, tournaments, and live
streaming events. All staff members will be trained on troubleshooting
any equipment issues provided to the customers and will be knowledgeable to answer any information
about the equipment.

B. Proposed pricing policy

Sample of interior design

A R s pricing policy is listed as four different categories of products: PayPlay hours (see Figure

2), the monthly membership fees, indoor/outdoor events, and in-store purchases. Our convenient prices
are subject to vary due to the seasonality of gaming releases and pro gaming competitions. The main
source of revenue in our first year will be from membership fees. One unit of a $100 membership fee is
equal to one month. On average there are 30 days in a month, which means a membership fee will be
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paying me $3.33 per day. While $2 is going into variable costs per day from a membership fee $1.33 is the
profit per day. Overall, $60 goes towards variable costs and my contribution margin is $40 (profit) each
month for one membership fee. Currently there is no other gaming lounge using this pricing policy. Lastly, I
will train my staff to sell membership fees to meet an annual goal of 300

memberships, which means $12,000 in profit off each member per month.

C. Personal promotion
The key advantage to personal promotion is the ability for the message sender to

Figure 4- promotional flyer

adjust the intended message as they gain feedback from message receivers. If the
customer does not understand something in the first time (e.g. unclear of how the process works) the deliverer of the
message can modify the promotion to address any questions or concerns. Below are examples of A R s personal
promotion activities, responsibilities, and estimated costs.

Invite local gaming communities and corporations to grand opening of A R

(Managed by Event Coordinators, $200 budget, flat rate commission of $10 per reference)
Get involved within the community such as Hack-a-thons and computer science programs along with
Science, Technology, Engineering, and Math (STEM) education fundraisers and events.
(Managed by Event Coordinators and all employees, $750 budget)
Fusion marketing campaign with the local GameStop for instance, every 3rd purchase at GameStop will
get you 1 free hour at A R . After every 10 hours at A R you will receive 10% off your next purchase at
GameStop. (Managed by Owner, $50 budget)
Personal Selling: Store-front employees will be trained on selling connected memberships (1 st year

membership) and reconnected memberships (2nd year memberships) (Managed by Owner, $500 budget)
Live Chat with A R on our website during hours of operation for any questions or concerns. ($200 budget)

D. Non-personal promotion

Rainy Day Discounts - Show up on a rainy day and get 30 minutes free! (Managed by Employees)
T- Shirt Raffle: A number between 1-10 will be drawn each day. If the number seven is drawn , the seventh
person with an A R T-shirt will get 2 free hours of game time or a free menu item
from the snack bar. (Managed by employees)
2,000 NPR emails will be sent out in the second year of each quarter to corporations
and people with similar gaming interests. (Managed by Owner)
Refer a Friend Friday: Refer a friend to A R Facebook page on Fridays and receive +2
hours for both you and your friend, shown earlier. (Managed by my manager)
Create Twitter, Facebook, Instagram, and Twitch accounts - Social Media outlets that are highly successful
and popular which are commonly used among the target market; source for announcements, news, and
information out to customers. (Maintained by Owner and Manger)

E. Place

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New York is the number one state with the most game releases each year. Burlington Plaza in Amherst, NY
is located in the busy retail corridor of Niagara Falls Boulevard, Maple Road, Sheridan Drive and the I-290
interchange. This area has one of the highest total traffic volumes in the Buffalo/Niagara Falls Region.
Burlington Plaza is adjacent to the Boulevard Mall, which is anchored by Macys, Sears and JCPenney. The
city also holds a T1 bandwidth, which will be able to host a gaming lounge based off of documentation
from Ignite Gaming Lounge in Chicago, IL. Just a few minutes down from the plaza is the State University
of New York (SUNY) at Buffalo campus with a total enrollment of over 28,000 students. According to
event gathering websites, Meetups.com and Eventbrite.com, there are many gaming groups and
communities within 50 miles of Amherst (two major examples below). On average, either sports bars or
the event leader hosts the event in his or her house. Gamers in New York will have to travel to Ignite
Gaming Lounge in Chicago, IL if they want to experience a gaming lounge similar to A R . Other than this
direct competition, A R only has consistent indirect competitors such as: sports bars, Boomers, and
arcades. The demand for a gaming lounge is in New York and with the skyrocketing popularity in esports, now is the perfect time to open A R Gaming Lounge.

Level 4. PROPOSED
FINANCING PLAN
A. Projected income/cash flow statement
The table below showcases the start-up costs for this business, which is approximately $300,000.
This startup covers the finances and supply for the first three months of opening the business including:
employee salary, insurance, and rent. Onetime costs are also included such as employee training, wireless,

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grand opening, and licenses specifically for the city of Amherst, NY.

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B. Projected three-year plan

In year two of business there will be a one hundred membership increase, which is a 50% increase in
revenue. Year three of sales revenue was calculated on the bases of a 5% increase in membership every
three months. All other revenues were calculated on a 10% increase for every following year. A R
anticipates being profitable in year two and three, the profit will go towards an increased salary, and more
money for the loans or capital repayment plan.

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C. Capital and repayment plan:

Loans guaranteed by the SBA are assessed a guarantee fee. This fee is based on the loans maturity
and the dollar amount guaranteed, not the total loan amount. The lender initially pays the guaranty fee
and they have the option to pass that expense on to the borrower at closing. The funds to reimburse the
lender can be included in the overall loan proceeds. On loans under $150,000 the fees will be set at zero
percent. On any loan greater than $150,000 with a maturity of one year or shorter, the fee is 0.25 percent
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10

of the guaranteed portion of the loan. On loans with maturities of more than one year, the normal fee is 3
percent of the SBA-guaranteed portion on loans of $150,000 to $700,000, and 3.5 percent on loans of
more than $700,000.
Overall I am searching for an angel investment of $20,000 for my company. The $20,000 will be a
third of $60,000- which is 20% of a $300,000 dollar loan. To qualify for the loan the applicant must have
the 20% of the loan amount they are asking, in their business savings account. I will be contributing
$20,000 myself and crowd fund through kick-starter for the remaining $20,000.

Level 5. BIBLIOGRAPHY
Online articles:

McCormick, Rich M. "'League of Legends' ESports Finals Watched by 32 Million People." The Verge. The Verge, 19
Nov. 2013. Web. 14 Jan. 2015.

"Business Licenses Online for the Entire U.S." Business License, Get Every Business License Online 1-800-679-3611,
Business Licenses Compliance Software and Services. N.p., n.d. Web. 16 Jan. 2015.

Beesley, Caron. "6 Options for Financing Your Small Business Marketing Plan." SBA. SBA.gov, 14 Dec. 2014. Web. 16
Jan. 2015.

"How to Calculate How Much an Employer Pays in Payroll Taxes." Small Business. N.p., n.d. Web. 16 Jan. 2015.

"How Do I Calculate Payroll Taxes? [Update] - The Payroll Blog." The Payroll Blog RSS. N.p., 07 Feb. 2014. Web. 16
Jan. 2015.

"Interaction Type: Personal vs. Non-Personal - KnowThis.com." Interaction Type: Personal vs. Non-Personal KnowThis.com. N.p., n.d. Web. 14 Jan. 2015.
"How to Finance a Franchise Purchase." Small Business RSS. N.p., n.d. Web. 16 Jan. 2015.
Interaction Type: Personal vs. Non-Personal (2015). From Types of Promotion Tutorial. KnowThis.com.
Retrieved February 24, 2015 from http://www.knowthis.com/types-of-promotion/interaction-type-personalvs-non-personal
Online tools:

"Loan Calculator." - Bankrate.com. N.p., n.d. Web. 13 Jan. 2015.

"Search Commercial Real Estate." Commercial Real Estate. N.p., n.d. Web. 16 Jan. 2015.

Secondary Resources:

"5.00." Ignite Gaming Lounge in Chicago. N.p., n.d. Web. 16 Jan. 2015.

"Video Game Industry Statistics | Entertainment Software Rating Board." Video Game Industry Statistics | Entertainment
Software Rating Board. N.p., n.d. Web. 14 Jan. 2015.

"DDR Properties." DDR Corp. N.p., n.d. Web. 16 Jan. 2015.

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