Start a drive-in by following these 10 steps:
- plan your drive-in
- turn your drive-in into a legal entity
- register your drive-in for taxes
- open a business bank account & credit card
- set up accounting for your drive-in
- get the necessary permissions & licensing your drive-in
- get drive-in insurance
- brand your drive-in
- create your drive-in theater website
- set up your company phone system
Starting a business involves more than simply registering it with the state. We’ve put together this simple guide to get your drive-in theater up and running. These steps will ensure that your new business is well planned, properly registered, and compliant with the law.
step 1: plan your business
A clear plan is essential to success as an entrepreneur. It will help you map out the details of your business and uncover some unknowns. Some important issues to consider are:
- what are the start-up and ongoing costs?
- who is your target market?
- how much can you charge customers?
- what name of your business?
Luckily, we’ve done a lot of research for you.
what are the costs involved in opening a drive-in theater?
You’ll need 10-14 acres of land ready to develop or you may find an abandoned drive-in for sale. you won’t be able to use old projection equipment, as the industry switched to a digital platform in the last decade. expect to spend between $250,000 and one million to develop the property, including building a screening room, concession stand, sound system, and playground.
How many acres do I need to lease or buy? The typical drive-in theater requires 10-14 acres of land. this should allow up to 500 cars to park in your theater. You’ll also need to consider the space required to funnel cars off the road and through the ticket booth. some locations have zoning requirements to prevent traffic from building up along the road or highway leading to the theater.
What type of projector do I need? Because most movie studios have begun to release movies exclusively digitally, digital projectors have become essential to the success of drive-ins. this will be one of your biggest expenses, since digital projectors typically cost between $75,000 and $150,000 per screen and must be professionally installed and calibrated. Barco, Christie and NEC are the top three manufacturers of cinema projectors today. Since not all old movies are available digitally, if you plan on showing classic movies, you can also buy a 35mm projector. you can often find them used.
How much does a projector screen cost? A quality projector screen for your drive-in theater can cost anywhere from $50,000 to $250,000 depending on your area and specific local requirements. most screens are made of steel and anchored in concrete. Typically, you will need a professionally constructed and installed screen to meet wind load requirements.
how do i get an fm station to play the audio? The most common way to handle audio in a drive-in theater is the use of an fm radio transmitter. To use this system, you must select an FM frequency that is not in use and connect your FM transmitter to the audio output of your projector. this allows you to deliver movie audio to users through their car radios. You will also need to have a supply of portable radios to rent to those who cannot receive sound through their car radios. you will need a different radio frequency for each screen. to remain fcc compliant you will need to purchase a 15 piece fm transmitter.
what are the running costs of a drive-in movie theater?
Your payroll will be a major expense. Movie rentals are a controllable expense, as you can opt for second-run movies at a much lower price. will place weekly orders for concession supplies. lot maintenance will also take up a large portion of your expense spreadsheet.
How much does a new movie license cost? The license fee for a new movie will vary from movie to movie. the license fee is usually paid as a percentage of total ticket sales, with a minimum flat fee required. it will usually be around 50%, but big-name releases will often fall on the higher end during opening days or weeks and the fee will gradually drop over the life of the theatre.
How much does a classic movie license cost? The cost of a classic movie license will also vary depending on the specific movie, but will generally be lower than new releases. Classic and second-run movies can be a good fit for drive-ins, as they are often easier to get hold of than new releases. however, you need to consider the level of demand in your area and how profitable old movies will be, even with lower license fees.
How do I obtain a license to show films? Cinemas obtain licenses to show films through film distributors. Because this process can be complex, it’s best to hire a reservations agent to help you in the first few days of your theater’s operation. Over time, you may choose to take this responsibility on yourself. As a small theater, booking new releases can be difficult. This is because many studios place specific requirements on the rental of their movies to theaters. often a new release will only be rented to a theater that can show the film seven days a week. If your drive-in theater isn’t open every day or only has one screen, it can be difficult to meet these requirements. Also, if you’re located near an indoor movie theater, these theaters will usually get priority because they can show movies day and night.
who is the target market?
Your preferred customers will be those looking for an old-fashioned movie experience. Drive-in movies peaked in popularity in the 1950s and 1960s, so many of your customers will be looking for a sense of nostalgia for entertainment in those times. Adapting your theater theme and décor to such a historical period can help meet the wants and needs of your patrons.
How does a drive-in movie make money?
You earn income by selling tickets to your movies and by selling concession products. most of their profits are generated through the sale of food and beverages, as movie distributors take a significant portion of ticket sales for new movies.
How would you manage ticket sales? your specific locker configuration will depend on your location. you can choose to sell from a single window or set up multiple entry lanes to manage more traffic. some theaters even use carhops to sell tickets from window to window. Although many older theaters maintain a cash-only system, today many movie distribution companies require electronic sales to accurately record ticket sales and revenue.
Do I charge per vehicle or per person? movie studios require a per-person ticket price for new movies. however, you may want to consider booking per-car specials on classic movie showings during slow periods.
how much can you charge customers?
The average ticket price per person is about $10 a piece, with discounted rates for children and seniors. You may want to offer a car load price of $30 to $40. Concession items will sell for $4 to $10. if you offer alcoholic beverages and a full menu, expect to charge between $12 and $20.
Can you make deals with local restaurants to deliver to parked cars? Although it is possible to establish an agreement with local restaurants to cater to moviegoers, it may not be profitable. Because concessions will make up such a large part of your theater’s profits, it can be counterproductive to give such a large part of these profits to outside companies.
How much profit can a drive-in theater generate?
You could earn as little as 10% of every ticket sold when you show new releases during the summer blockbuster season. Concession items offer a 50-80% profit, but your operating expenses will eat up all those extra dollars. if you’re selling all season, you could see a total profit of $100,000 to $150,000.
how can you make your business more profitable?
The key to success is filling your drive-in every time you open the doors. running obscure or old movies that don’t attract customers can be fun, but not profitable. new trends in the movie industry are focused on offering premium services for regular customers instead of offering tickets on sale to increase profits for each carload that buys the ticket.
what will you call your company?
Choosing the right name is both important and challenging. If you don’t already have a name in mind, visit our guide on naming a business or get help brainstorming a name with our drive-in name generator
If you operate a sole proprietorship, you may wish to operate under a business name other than your own name. visit our dba guide for more information.
When registering a company name, we recommend researching your company name by checking:
- your state business registrations
- federal and state trademark registrations
- social media platforms
- web domain availability.
It is very important to protect your domain name before someone else does.
step 2: form a legal entity
The most common types of business structures are sole proprietorship, partnership, limited liability company (llc), and corporation.
Establishing a legal business entity like an llc or a corporation protects you from being personally liable if your drive-in is sued.
You can form an LLC yourself and pay only the minimum state LLC costs or hire one of the best LLC services for a small additional fee.
step 3: register for taxes
You will need to register for a variety of state and federal taxes before you can open your business.
To register for taxes, you will need to apply for an ein. It’s so easy and free!
learn how to get an ein in our what is an ein guide or find your existing ein using our ein search guide.
small business taxes
Depending on the business structure you choose, you may have different options for how your business will be taxed. For example, some LLCs may benefit from paying taxes as an S Corporation.
You can learn more about small business taxes in these guides:
- llc taxes
- sole proprietorship vs llc
- llc vs corporation
- llc vs s corp
- how to get started an s corporation
- a corporation vs a c corporation
There are specific state taxes that may apply to your business. Learn more about state sales taxes and franchise taxes in our state sales tax guides.
step 4: open a business bank account & credit card
The use of dedicated business bank and credit accounts is essential for the protection of personal assets.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is known as piercing the corporate veil.
plus, learning how to build business credit can help you get credit cards and other financing in your business name (rather than your own), better interest rates, higher lines of credit, and more.
open a business bank account
In addition to being a requirement when applying for business loans, opening a business bank account:
- separates your personal assets from your business assets, which is necessary for the protection of personal assets.
- makes accounting and tax reporting easier.
open 30 net accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses purchase goods and pay the full balance within 30 days.
netmany net 30 credit providers report to the major business credit bureaus (dun & bradstreet, experian business and equifax business credit). this is how businesses build business credit so they can qualify for credit cards and other lines of credit.
get a business credit card
getting a business credit card helps you:
- Separate personal and business expenses by putting all of your business expenses in one place.
- Build your business’s credit history, which can be useful for raising money later.
step 5: set up business accounting
Recording your various expenses and revenue sources is critical to understanding your company’s financial performance. Keeping accurate and itemized accounts also greatly simplifies your annual tax return.
make llc bookkeeping easy with our llc expense cheat sheet.
Step 6: Obtain the necessary permits and licenses
Failure to obtain the necessary permits and licenses can result in heavy fines or even the closure of your business.
federal business license requirements
There are federal regulations regarding what can and cannot be added, sold, and processed with food. Attached is a Food and Drug Administration resource that details the process of starting a food business: how to start a food business
status & local business license requirements
Certain state permits and licenses may be required to operate a drive-in business. Learn more about licensing requirements in your state by visiting the SBA Reference for State Licenses and Permits.
for information on local licenses and permits:
- check with your town, city, or county clerk’s office
- get help from one of the local associations listed in the us small business association directory. uu. of local business resources.
Does this business violate any strong standards? although fm radio broadcasting has significantly reduced the overall ambient noise coming from drive-ins, housing large numbers of people in their vehicles can still produce a great deal of noise. Noise ordinances will vary significantly from place to place, so check your specific location for applicable regulations. It’s also important to note that even if there are no restrictions in place now, if your theater produces nuisance noise levels, you may face new ordinances in the future. this is especially true if your theater is in close proximity to residential housing.
how do i get a license with pepsi or coca-cola to provide soft drinks? To serve Pepsi or Coca-Cola products in your theater you will need to make a distribution agreement with one of these companies. To start the process, visit Coke Solutions or Pepsico Partner to submit a request to serve your products. someone from the company will contact you to develop a contract. You should consider contacting both companies to see which offers you a better deal.
Do I need licenses to serve food? Any business that serves food must have a food service license. the details of this requirement will vary by state. Often the cost will depend on your specific business and how many people you plan to serve. check with your local business authority for the requirements in your state.
Can I serve alcoholic beverages? Although the sale of alcohol is becoming more popular in movie theaters, this issue is more complicated when it comes to drive-ins. most drive-ins prohibit guests from bringing alcohol and do not sell it. those theaters that offer alcohol at their concession stands generally require that it be consumed within the concession area or bar. If you want to serve alcohol in your theater, you will need to obtain an alcoholic beverage license that allows you to serve alcohol outdoors.
How many bathrooms do I need? Restroom requirements vary by state, but most are based on how many customers you have. for example, you may need to have one bathroom for every 40 guests. Be sure to check the specific requirements in your area, including those related to handicapped accessible restrooms. there are also restroom requirements when it comes to employees. For example, OSHA requires businesses with 16 or fewer employees to have a bathroom for their staff.
Can I only have one entrance and one exit, or is it a fire hazard? Specific egress requirements will depend on local zoning laws in your state or community. many require at least two exit points.
certificate of occupancy
A drive-in business usually runs out of much. Businesses that operate out of a physical location generally require a Certificate of Occupancy (CO). a co confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a co.
- Before you lease, confirm that your landlord has Or you can get a valid CO that applies to a drive-in business.
- After a major refresh, it is often necessary to issue new code. If your place of business is to be renovated prior to opening, it is recommended that you include language in your lease that states that lease payments will not begin until a valid co is issued.
- if you plan to buy or build a location:
- you will be responsible for obtaining a valid co from a local government authority.
- review all building codes and zoning requirements for your business location to ensure your drive-in business is compliant and able to obtain a co.
When you sell food, you will need a license from the local health department; all establishments that serve food must pass a sanitary inspection. Tips to succeed in a health inspection
Step 7: Get Business Insurance
As with licenses and permits, your business needs insurance to operate safely and legally. Business insurance protects the financial well-being of your business in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re not sure what types of risks your business may face, start with general liability insurance. This is the most common coverage small businesses need, so it’s a great starting point for your business.
Another notable insurance policy that many businesses need is workers’ compensation insurance. If your business will have employees, your state will most likely require you to have workers’ compensation coverage.
step 8: define your brand
Your brand is what your company stands for, as well as how the public perceives your business. A strong brand will help your business stand out from the competition.
if you already have a logo you can also add it to a qr code with our free qr code generator. choose from 13 types of qr codes to create a code for your business cards and publications, or to help spread the word about your new website.
how to promote & market a drive-in theater
It’s a good idea to develop a website that is updated weekly and talks about the latest releases, offers trailers, lists menu options and maybe offers online ticket sales. You’ll need to make sure your movie is listed on major online ticket outlets like Fandango and MovieTickets.com. Spread the word about the new location by participating in local festivals, fairs and conventions. you may also want to sponsor local art and food festivals.
how to get customers to come back
With so many options available to watch movies, you need to offer a unique experience. some drive-ins now offer beer, wine, and even fine dining options. the latest in projection and sound often attracts avid moviegoers. families will appreciate bouncy houses or supervised play areas to allow mom and dad to enjoy the show without having to constantly watch the kids.
step 9: create your company website
After defining your brand and creating your logo, the next step is to create a website for your business.
While creating a website is an essential step, some may fear it’s out of their hands because they don’t have website building experience. While this may have been a reasonable fear in 2015, web technology has seen great advances in recent years that make life much easier for small business owners.
These are the main reasons why you should not delay the creation of your website:
- all legitimate businesses have websites – full stop. the size or industry of your business doesn’t matter when it comes to getting your business online.
- social media accounts like facebook pages or linkedin business profiles are not a replacement for a business website that you own.
- Website building tools like godaddy’s website builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website you can be proud of.
Using our website creation guides, the process will be simple and painless and will take you no more than 2-3 hours to complete.
Other popular website builders include: wordpress, wix, weebly, squarespace, and shopify.
Step 10: Set up your business phone system
Setting up a phone for your business is one of the best ways to help keep your personal and business lives separate and private. that is not the only benefit; it also helps you automate your business more, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to business owners who want to set up a business phone system. we’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the best business phone systems 2022 to find the best phone service for your small business.
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