How to Start a Pool Hall

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Quick Reference

Pool is a fun and popular game played in homes and bars across the country.  If you are a pool player, you can turn your passion for the game into a business and start your own pool hall.  It’s a great opportunity to get into a niche market, have fun, and make a living as your own boss.

Business Overview

A pool hall offers pool tables and equipment to customers for a fee in a fun setting and usually has a bar and food service.  Some have events and tournaments and pool leagues for customers as well.

Industry Summary

According to IBIS World, the market size of the pool hall industry is $742.4 million as of 2021 and expected to grow 1.1% during the year.  The market has declined 7% per year over the last five years.  The industry was affected by the pandemic in 2020 due to social restrictions but is expected to rebound moderately.

Industry Trends

Pool halls became popular in part due to movies such as “The Hustler” and “The Color of Money” but have declined in popularity in the last 5 years.  Post pandemic, however, they are expected to rebound.  Because the popularity has declined, you will need to have unique marketing and branding to attract customers.

Target Market

Your target market will be people who enjoy playing pool in a social setting, however, younger males under 35 tend to make up a majority of the customer base.

Skills, Experience, and Education Useful in Running a Pool Hall

There are several specific skills that you will need to open a pool hall.

  • Experience.  Experience working in a pool hall or a bar will be valuable so that you already know the ins and outs of the business.
  • Business knowledge and experience.  You will need to have some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.

Costs to Start a Pool Hall

Here are the typical costs you will face when you open a pool hall. It will take a significant amount of capital.

  • Setting up a business name and corporation costs approximately $200.
  • Business cards, brochures, postcards for marketing $200 – $300
  • Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $2,000 for a professional site
  • Pool tables, snooker tables, and equipment $30,000 +
  • Bar, lighting, space preparation $25,000 +
  • Initial inventory of food and alcohol $5,000 +
  • Space rental $1,000 – $5,000 per month
  • Liability insurance, worker’s comp, property-casualty insurance $600 – $1,000
  • Initial marketing such as Facebook ads or search engine optimization for your website, flyers, and postcards, $500 – $1,000

Steps to Starting a Pool Hall

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your business should be to write a pool hall business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related:
How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect pool hall name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Related: Tips and ideas for naming a pool hall

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

A good location for a pool hall tends to be in an entertainment-focused area near restaurants and other bars.  It will cost more money to rent a space in that kind of area, but it will pay off.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Check with your state for specific license and permit requirements for your pool hall. You will need a liquor license for your bar.  Some other common local, state, and federal registrations a pool hall may need include a sales tax permit and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a pool hall is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

Common marketing techniques for a pool hall can involve hosting tournaments and running special offers to get more people in the door. Social media marketing and online advertising can be an effective way to reach your customer base, as well as flyers and postcard mailers.  Developing a website can also be a significant expense, but it can also give your pool hall greater visibility online.  Your outdoor signage will also be important to attract attention.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A pool hall owner needs several types of insurance to protect the business:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You will need to hire employees to help you run your pool hall.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your pool hall is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a Pool Hall?

Prices for pool table rentals are usually around $8-12 per hour.  If you have 10 pool tables, you could make $200,000 or more in revenue.  Liquor and food sales will add to your potential revenue.

Things to Consider Before Starting a Pool Hall

Running a pool hall or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Marketing and acquiring customers will be your biggest challenge and an ongoing expense.  You will need to make your pool hall unique and create a fun, energetic atmosphere.  Your location is absolutely critical but expensive, so you need to consider that cost when making your plan.

If you live in a state that allows video gaming, a pool hall can be an excellent source of customers and tends to be a good money maker without having to do much work.

If selling alcohol, bartender theft can be a problem if not correctly managed.

The costs to start a pool hall are significant. You are putting your time and money at risk if you don’t succeed.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other pool halls to see what they offer and what prices they charge.

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