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Nearly 5 years ago, I took a job transfer. In my new location, I became extremely discontented. I had nearly 16 years with my employer, but felt the urge to get out and do something on my own.
I had always wanted to own my own business. The question was... what business should I get into? I was educated, but didn't have a specialty or license that would allow me to do something very specialized, like doctor, lawyer, accountant, etc. My line of work did not lend itself to an independent operation. I also feared competition, thinking that as a new entrepeneur how could I compete with large established companies. I looked for my own niche. I wanted something fun that my wife and I could do together. If we would both work together, it would need to be something that would allow for our young children to spend time there too.
I discovered that I had a great interest in movie theaters. I realized that there were many small towns that didn't have a movie theater. It was something my wife and I could do together. And it was something that was pretty kid-friendly, so we could all be there together.
As with most brick and mortar businesses, it takes a lot of money to get into. I didn't have a lot of money on hand. Most of what I had was invested in my home. I had just paid it off. I was living mortgage-free for only a few months, when an idea struck me. We could sell our home to start a theater. This is an extremely risky move, I suppose, but I couldn't see any other alternatives. I've seen lots of people looking for grants or financing for their theater ideas. Typically, for a new entrepeneur that money is not available. If you are going to do something unusual, then bankers and other lenders are not likely to want to help. At least that seemed to be the case.
I looked for many months for a good location... based on population, competition, and facility. I searched for theaters for sale, and also for buildings that could be converted into a theater. I even considered building a new one from the ground up. In the end, I decided to buy an old closed theater and renovate it, including converting it from a single screen to a twin. More than one screen is needed with the way the movie industry currently works. I had located some very educational resources online and did my best to learn everything I could. I did feel pretty well prepared for the undertaking from what I learned, but I knew there was more to learn.
My wife was supportive and we decided to take the leap. The closed theater was a bargain (practically a song) because of it's very poor condition. It was falling apart. We had enough money on hand to buy it, but put our home up for sale immediately. We knew we needed a lot more money to renovate and get the place up and running. Besides, we had to relocate anyway. I hired an architect with hopes that he could tell me how much everything would cost. He had only a guess that was not much different than my own. There is an old saying that remodeling costs you twice as much and takes you twice as long as you expect. This was exactly the case for us. The architect and I were both wrong. There are too many unknown variables in this kind of project for the faint of heart.
Half way through the project, I discovered that I had about half enough money. Luckily, I knew people who gave me a personal loan for the other half. You should definitely not expect someone to be willing to do that, unless you have an agreement with them in advance. I am just blessed. You should do a better job of planning in advance than I did, if you are going to try something like this.
We spent over a year of my (and my family's) blood, sweat, and tears working on the place ourselves to save money. I acted as general contractor, and learned a lot in that process too. That means I hired all the subcontractors and coordinated the work. I dealt with all the regulations and all the payments. Like I said, we did a lot of the work ourselves, too. This will slow you down a lot, but it is a way to do it for less if you have some skills. It's a time versus money decision. If you can open a business sooner, you should be able to start earning an income sooner to pay for the labor you paid for when doing the project faster. Will you earn enough to pay the difference in the months of time you've saved? I didn't believe that we would have. We saved a lot. Besides, I didn't have enough money to pay for it all to be done for me anyway.
We finally opened the business with a lot of excitement in the town that hadn't had their theater open for about 12 years. Business was good in the beginning. There is often a honeymoon period for businesses like movie theaters. Then the realities of business set in. Business is very seasonal at a movie theater, and also dependent on the films.
We had a business plan to operate a cafe out of the concession area during non-film hours to help supplement us in the slow months. We were going to serve lunch, and also dinner before movies in our new dining room. We never fully implemented the cafe concept. There was a disagreement in "management" (family argument) about this idea. Even though, I had built the facilities and bought the equipment, we just couldn't agree on this.
In the end, we just added a few hot foods to the concession line-up to sell during movies. I regret this now. I still think the cafe was the key. TIP: when in business with a family member or partner, be sure to have all important aspects of the business plan not just agreed upon, but fully understood, before you proceed. Everyone needs to understand how you are going to do it, just as much as what you are going to do.
Before long, one of my children had health problems that scared us. We had insurance, but his problem was put under an exclusion by the insurance company, because it was pre-existing and potentially a life-long problem. We were concerned that if he got worse, we would be unable to pay. We were attempting to build our business and our customer base, but it takes time. I'm sure you've probably heard that it takes 2 or 3 years to start making money with a new business. We were open less than a year at that point. Well, we were earning a small living from the theater, but not enough to handle major medical bills. We were just getting by, and we didn't have time to wait for business to improve significantly.
We decided I had to get another job with better insurance and sell our business. I managed to get another job... back with the organization I had been so discontented with before. I had to relocate again. Should I have just stayed put? Maybe, but I'm glad I took my shot. I don't know that I ever will again. Maybe someday...
The problem now is that I still own that Movie Theater. Every potential buyer wants to see financial records. It was not yet fully successful. There isn't a lot to write home about. Selling a business after only one year of operation is tough. I'm still making payments on the building. I'm only trying to sell for the value of the property and assets. I will make no money on it when I finally sell it. I may lose some.
I've offered to owner finance or set it up as lease to purchase to some parties, but so far only people who could walk in without a dime down seem to be seriously interested. I don't like the idea of doing that. There is too much invested in the property to allow someone to play without some skin in the game.
If you know someone that is interested in a nice little 2-screen movie theater in small town Oklahoma, send them my way. They can find me through my website, GentryCinema.com