The business idea of opening a cinema today is very relevant, both for large metropolitan areas and for small towns.
This is due to the rapid development of the film industry throughout the world, and Russia is one of the leading places in the world here. Every year, hundreds of films, both foreign and domestic production, are released in Russian distribution.
Therefore, this market segment is in high demand and, as forecasts of specialists show, its relevance for the next few decades will remain at a fairly high level.
But in order for this idea to be profitable, it is necessary at the initial stage to correctly draw up a cinema business plan, taking into account all the features and specifics of this field of activity.
What is the attractiveness of a business idea for opening a cinema?
The fascination of the business idea for opening a cinema is:
— firstly, in the fact that in many settlements of Russia this niche of entrepreneurship is practically free,
— secondly, it is a high profitability of the business, and thirdly, it is the possibility of conducting other types of business (bars, cafes, billiard rooms, renting out premises).
Cinema business plan: issue price
When compiling a business plan for a cinema, it is immediately necessary to determine the amount of financial costs at the start of the project.
1. The choice of premises for the future cinema plays a primary role here.
There are several options here:
- rental of premises.
- lease with refurbishment and reconstruction.
- building your own space.
- cooperation with shopping malls (shopping and entertainment centers) is still at the design stage.
In addition to choosing the type of room, it is important to consider its location, size and technical condition. It should be noted right away that a number of specific requirements are imposed on such premises:
1) The area of the cinema should be from 400 m2., and the area of the hall — from 80 m2..
2) The room must meet all applicable requirements and standards imposed by the fire inspectorate and SES.
3) The height of the ceilings is more than 4 meters, and the room must be completely soundproof.
4) The cinema must have its own spacious parking lot.
2. The second cost item is the purchase of equipment and furniture for the cinema
This question also requires a professional approach. The cost of furniture will depend on the size of the cinema hall and the number of seats. But in any case, the costs will be at least 600 thousand dollars.
3. The next item is recruitment
At this stage, it is important to initially assemble a team of professionals. First of all, this applies to engineering and technical workers who will be responsible for the operation of the equipment and the screening of films.
Approximate staff for a small cinema:
1) Director.
2) Engineer-technician.
3) 4 service personnel.
4. Next come advertising, administration and legal costs.
It should be noted here that the best option is to open an LLC with the OKVED code 92.13 — showing films. The second option is a simplified taxation system (more suitable for small towns).
5. Expenses for providing cinema rentals
To do this, it is necessary to apply to the distributor for a particular film in advance, while it is important to keep track of all the trends and novelties of the film industry and pay close attention to this issue. The main suppliers of films in Russia are: «CentralPernerShip» and «Kara Film».
In total, the average business plan for a 50-seat cinema should include an initial cost of at least $11 million (new building option).
This amount adds up:
1) Construction of an air support structure — 2-3 million dollars.
2) Internal layout of the premises — $1.5 million.
3) Purchase of equipment — $5.5 million.
Cinema Business Plan: Operating Costs
Also, the cinema business plan should include operating expenses:
- salary is $100,000.
- UST — $45,000.
- advertising — $25,000.
- administrative expenses — $25,000.
- security, accounting, etc. — $25,000.
Total operating expenses will be about $220,000 per month
Cinema business plan: average income, profit, profitability
Income. With a daily revenue of $60,000 (8 sessions at an average ticket price of $150):
Revenue — $ 900,000.
The cost price is 450,000 dollars.
Net income including expenses and taxes (15%) — $153,000.
Moreover, the profitability of such a cinema will be approximately 17%. With options for renting a room, the initial costs will be different, as well as the payback period, but the monthly figures will remain approximately the same.
Cinema business plan: the main risks of the project
When compiling a business plan for a cinema, it is imperative to take into account a number of risks that are characteristic of this type of business:
At the stage of launching a business idea to open a new cinema, one of the main risks is the lack of own and investment funds. At the stage of cinema operation, the main risks are:
— insufficiency of visitors — how to «fight» this risk — read this article .
— a significant increase in costs.
All this must be taken into account at the stage while the cinema business plan is being developed and calculated. In this case, the influence of all these factors can be either completely avoided or significantly reduced.
Cinema business plan: phased implementation of the project
- Decide on a place
- Build or rent a building
- legal clearance,
- Selection and purchase of equipment,
- Pick the staff
- Conclude an agreement with film suppliers,
- Start work.
Thus, with a well-designed business plan and its strict implementation, the payback period for a new single-screen cinema designed for 50 seats will be from two to five years.