Everyone enjoys a good movie. But consumers' definition of "good," and
their willingness to pay for it, are up in the air. That can make the
prospect of starting your own movie theater daunting. For film buffs
looking to own a cinema, plenty of considerations have to be taken into
account and the decision made to not only start a movie theater, but
also start one that is popular and profitable.
Step 1
Consider the benefits of franchising versus owning your own theater. Many prospective theater owners franchise a theater from a large company such as AMC or United Artists. Owning your own theater gives you far more control over your business and a bigger share of the profits, but requires a lot of start-up capital.Step 2
Shop around when franchising. Each theater company that franchises to prospective theater owners has a different set of rules governing the theater's operations, including how much money is paid to the company, what films are shown and advertising issues. Once you've picked a parent company, grab your checkbook and give them a call.Step 3
Decide on a theme for your theater if you want to go the independent route. Unless you hit upon an area without a movie theater, you are going to need an identity that sets your theater apart from the multiplexes and other independents in the area. Themes for your theater include showing only foreign and independent films, showing mostly classic films, or screening blockbusters long after their release dates at budget prices.Step 4
Secure
sources of distribution if you go the independent route. Remember that
one of the big advantages of franchising is that the parent company
secures the screening rights to films. As an independent, you will have
to secure those rights yourself. This step is essential before you break
ground on your theater; without films to screen, your theater becomes
just another building.Step 5
Evaluate the local market before you jump in. You will have to do some extensive research on local film preferences, desires and dislikes. Then you need to determine if you can deliver those films to a regular audience, while still making money. If you strike upon a profitable business model, then it's time to buy property in your desired area and begin the permit process with your local government.Step 6
Obtain a theater license. Most cities or municipalities have a licensing office that handles business licenses. These license offices will require you to present documents and the address of your business. For instance, to obtain a license in Pittsburgh, Pennsylvania, theater owners need to present identification and the address of the business being licensed to the City Licensing and Permits Office.Step 7
Secure funding. Owning a movie theater is like owning any other independent business: The most prevalent source of funding is a bank loan. For that, you are going to need to prove to a loan officer that your business is profitable, sustainable and that your credit can handle the loan obligations.Step 8
Advertise
and attract customers. Even if you secure permits and funding, your
theater is going to tank if no one knows about it. Those who franchise
may be required to run certain advertising campaigns as part of the
their franchising agreement, but generating word of mouth is far easier
with a parent company behind you. Run opening night promotions, film
festivals and daily deals when you open your independent theater to
bring in an audience. Make sure your name is everywhere in the weeks and
months leading up to the first screening. Connect with business owners
in the surrounding area to see if you can run joint promotions with
their cafes, bars or restaurants.
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