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Written by: Natalie Fell
Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 24, 2022
Investment range
$378,500 - $1,309,600
Revenue potential
$585,000 - $1.6 million p.a.
Time to build
1 - 3 months
Profit potential
$117,000 - $312,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here are the most important factors to think about when starting your drive-in movie theater:
Before starting a drive-in movie theater, it’s important to consider the pros and cons.
Trends in the drive-in movie theater industry include:
Challenges in the drive-in movie theater industry include:
Startup costs for a drive-in range from $380,000 to $1.3 million. Costs include land lease or purchase, projection and sound equipment, and the cost to license the films you feature. You may be able to keep costs low by purchasing used equipment and licensing older films instead of new releases.
You’ll need a handful of items to successfully launch your drive-in movie theater, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Licenses and permits | $100-$300 | $200 |
| Insurance | $100-$300 | $200 |
| Marketing and advertising | $500-$1,000 | $750 |
| Website | $1,000-$2,000 | $1,500 |
| Software | $500-$1,000 | $750 |
| Land & Development | $250,000-$1,000,000 | $625,000 |
| Digital Projector & Sound Equipment | $125,000-$300,000 | $212,500 |
| Film Licensing Fees | $300-$2,000 | $1,150 |
| Concessions | $1,000-$3,000 | $2,000 |
| Total | $378,500 - $1,309,600 | $844,050 |
The average cost to attend a drive-in movie is $20 per vehicle. If food and drink are available, patrons spend an average of $10 on concessions. Your profit margin after the costs of land, equipment, film licensing, and supplies should be about 20%.
In your first year or two, you could hold three screenings per week for 125 cars each. You could charge $20 per vehicle and sell $10 worth of concessions to each, bringing in $585,000 in annual revenue. This would mean $117,000 in profit, assuming that 20% margin. As your drive-in theater gains recognition, you could increase your screenings to four per week to 250 cars each, bring in $1,600,000 in annual revenue, and make a handsome profit of $312,000.
There are a few barriers to entry when starting a drive-in movie theater. Here’s what you can expect:
Now that you know what’s involved in starting a drive-in movie theater, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research drive-in movie theaters in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a drive-in theater with a full-service bar or restaurant onsite.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as only showing children’s movies or classic films.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You can choose to show a variety of different films at your drive-in movie theater. New releases are more expensive to show than older films. Consider offering concessions like food and alcoholic beverages to increase revenue.
You could price your tickets at $10 to $15 per person, or charge a per-vehicle rate of $20 to $40. Depending on what you offer for concessions, you could charge between $5 and $15 per item. Alcoholic beverages might cost $10 to $20.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be movie-goers looking for an alternative to the traditional movie theater experience. You’ll have customers spanning a wide age range, so focus your marketing efforts on popular social media platforms like Facebook, TikTok, and Instagram.
You’ll need to acquire a piece of land that’s big enough for a drive-in theater, somewhere between 10 and 15 acres. Zoning requirements in your local area may limit your choices, so check with your municipality.
In the early stages, you may want to run your administrative operations from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Discover over 320 unique drive-in movie theater business name ideas here. If you want your business name to include specific keywords, you can also use our drive-in movie theater business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to drive-in movie theaters.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your drive-in theater will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a drive-in movie theater. You might also try crowdfunding if you have an innovative concept.
Starting a drive-in theater requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your drive-in movie theater as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as SimpleTix, Veezi, or Big Tickets, to build event webpages, assign parking spaces, and collect payments.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your drive-in movie theater meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your drive-in movie theater could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a drive-in, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in movies for years and can offer invaluable insight and connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in drive-in theaters. You’ll probably generate new customers or find companies with which you could establish a partnership.
As your business grows, you will likely need workers to fill various roles. Potential positions for a drive-in movie theater include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Drive-in movie theaters are making a huge comeback as more people resume social activities. Becoming a drive-in movie theater owner takes a lot of work, but you’ll be putting smiles on your customers’ faces and good money in your pocket!
Now that you’ve learned the business fundamentals, it’s time to get out there and build your brilliant drive-in business.
Yes, a drive-in movie theater can be a profitable business. Ticket sales alone won’t be enough to drive revenue, so make sure to offer attractive concessions for purchase.
To stand out from competitors in the drive-in movie theater industry, create a unique experience with themed movie nights and a welcoming atmosphere. Provide excellent customer service and delicious concessions to keep customers returning for more.
Most use FM radio frequencies to transmit sound. In the old days, you used to hook up a speaker to your car.
You need a central location where people can purchase food and beverages. You’ll manage it just like you would a cafe.
Once you build a brand, you can find new locations in your area. In theory, you can even franchise your theater.
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