So, you’ve been bowling; you’ve paid the lane fee and the shoe rental fee, you bought tokens for the arcade games and a pitcher of beer, and maybe you even shelled out a little extra for additional games.
At some point along the way, we’re sure you thought, “I should open a bowling alley– this place is a goldmine!”
Well, are bowling alleys profitable? In this article, we’ll address just that. Keep reading to learn if a bowling alley would be a good investment.
Contents
- 1 Are Bowling Alleys Profitable
- 2 Three Reasons Why Bowling Alleys are a Good Investment
- 3 Three Reasons Why Bowling Alleys are a Bad Investment
- 4 How Much Does It Cost to Open a Bowling Alley?
- 5 Costs Associated with Building a New Bowling Alley
- 6 Costs Associated with Buying an Existing Bowling Alley
- 7 Three Things to Consider Before Opening a Bowling Alley
Are Bowling Alleys Profitable
The bowling industry has seen somewhat of a decrease in interest in recent years, but not to the extent that owning a bowling alley is no longer a profitable investment.
In fact, the reality is quite the contrary.
As of 2022, bowling is a 10-billion-dollar industry. There are currently 12,000 bowling alleys (ranging from traditional to luxury) across the globe, with an estimated 67 million customers who visit them at least once a year.
A conventional bowling alley includes 30 or more lanes in the facility, and statistics show that a single lane averages around $36,700 in yearly revenue.
Three Reasons Why Bowling Alleys are a Good Investment
If you’re looking for a push in the investment direction, there are many convincing arguments for why opening your own bowling alley is a good investment. They include the following:
1. Bowling is an Activity That You Can enjoy Year-Round
Since all alleys are indoor bowling centers, weather conditions do not affect whether you can enjoy a game of bowling.
Even in summer’s blistering temperatures or winter’s frigid conditions, a bowling alley offers the perfect climate-controlled environment for a little recreational fun.
2. Bowling Is Suitable for All Ages
Bowling is a popular family activity because every member can participate in and enjoy it.
Most bowling alleys offer features to assist young children participating in the game and keep their ball out of the gutter, such as bumpers and ramps, as well as alcoholic beverages for the adults to enjoy responsibly.
3. Bowling Alleys Have Low Inventory Costs
Operating a bowling alley does not require frequent ordering of new inventory, considering that the supplies for the game are used repeatedly.
Bowling pins, for example, only need to be replaced every two years on average, and resin bowling balls can withstand approximately 300 games before their quality degrades.
Some bowling alleys even opt to sell the pins no longer in circulation as souvenirs for bowling leagues or birthday parties.
Three Reasons Why Bowling Alleys are a Bad Investment
When tossing around the idea of opening a bowling alley, consider any downsides along with the upsides. Some of the downsides to owning a bowling alley include:
1. Low Gross Profit Margins
A healthy gross margin is in the range of 50% to 70%, but bowling alleys typically fall in the ballpark of 25% – 30%.
Profit margins dictate how much money is available to cover business expenses, with low gross margins resulting in less money for said expenses.
2. High Overhead Expenses
The expenses associated with starting a bowling alley can be steep, especially if you are building an alley from the ground up.
Costs of utilities, payroll, insurance, and general facility maintenance can add up very quickly.
3. Recreational Sports Centers are a Liability
Bowling alleys may seem like a low-risk investment in terms of potential injury when compared to skating rinks or trampoline parks, but the risk is still there.
Regardless of whether your patrons are seasoned professionals or complete amateurs, the risk of injury is ever-present, making liability insurance an absolute must. This, of course, is an additional cost to consider.
How Much Does It Cost to Open a Bowling Alley?
We’re sure you’re wondering what the actual numbers are when getting a bowling alley up and running.
The average bowling alley cost of opening a bowling alley starts at around $80,000 and skyrockets up to $3,000,000.
There are several factors at play when estimating this final cost, a major one being if you are building an alley from the ground up or buying an alley from its previous owner.
Costs Associated with Building a New Bowling Alley
Building any commercial space is associated with a handful of costs, and a bowling alley is no exception.
Of course, actual prices will vary from location to location, but some expenses to keep in mind when building a bowling alley are:
- Purchasing a plot of land big enough to accommodate the facility and five parking spaces per lane.
- Construction of the facility.
- Licenses (Operating license, business license, liquor, and food permits, employer identification number, etc.)
- Purchasing the equipment and machines needed for the game (ball returns, pin replacement, etc.)
- Investing in bowling supplies such as balls, pins, and shoes.
- Purchasing furniture, including seating around bowling lanes for those waiting their turn to bowl or customers enjoying refreshments.
You will need to cover all of these costs before considering the price of employee recruitment, payroll, and marketing for your business.
Costs Associated with Buying an Existing Bowling Alley
Buying a bowling alley from its previous owner is a great way to spend less money, as the remodeling is far cheaper than building a brand-new structure.
Additionally, you will be able to open the doors of your alley and start generating revenue much more quickly than if you had to wait for construction to complete.
However, there are still some things to keep in mind when taking this route, including:
- Why is the bowling alley being sold? Maybe the facility isn’t generating enough revenue to still be profitable, which you will want to know before investing.
- Are there any renovations needed? The bowling alley could probably use a bit of a facelift once it’s under your management, so make sure to keep remodeling costs in mind.
- What is the condition of the supplies and bowling equipment? Can you take ownership and go into business the next day, or do the pins and machines need an upgrade?
Buying an existing bowling alley could be a way of fast-tracking your dream of owning a bowling alley, but make sure to do your due diligence so that dream doesn’t become a financial nightmare.
Three Things to Consider Before Opening a Bowling Alley
You should not make business decisions lightly.
Bowling alleys are associated with high overhead costs and lower-than-average gross profit margins, so some considerations must be made to determine your venture’s success.
These factors include:
1. The Population Density of the Surrounding Community
While it’s not the only factor that will cause your business to sink or swim, consider how many potential patrons surround the area of your bowling alley.
A sparsely populated community will require repeat customers for your business to stay afloat, while a denser population will allow you to rely on one-time customers.
2. Are There Nearby Competitors?
Market saturation is a possible issue and not at all your friend when owning a niche sports facility.
If there are other bowling alleys near your potential alley, this is something to think about carefully, as you will have to find a surefire way to set yourself apart from the competition.
3. What Sets You Apart?
You can roll a ball down a lane and knock down pins at every bowling alley. So, what makes your bowling alley different from the others?
Will you have a state-of-the-art scoring system? Will you offer the most comfortable bowling shoe money can buy?
Or will you have a chef-inspired kitchen? Find a way to take your bowling alley from “a” bowling alley to “THE” bowling alley.
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Every business decision comes with a degree of risk and reward, a bowling alley being no different.
Bowling is a multi-billion-dollar industry, meaning there is plenty of potential to turn a significant profit should you choose to invest in a bowling facility.
Of course, many factors need to be considered that affect both the cost to operate and the popularity of your business, but if well-thought-out, a bowling alley can be a profitable investment.
Kira Byrd, who holds a B.S. in Accounting and operates as an Internal Auditor during the day, has been an enthusiastic bowler since she was a small kid. She’s passionate about the sport and has been a member of several bowling clubs. Kira’s passion for helping others learn how to bowl as she realized how much her family and friends enjoyed the sport. Kira started Bowling for Beginners to teach new bowlers the game and help them improve their skills.