Saving money is an art form. Some people can take this to the extreme. Have you ever seen extreme couponing shows? They save tons of money and shop for next to nothing…getting many groceries for free. At one point, I decided to take a local class on extreme couponing. I soon discovered that what I would save in money, I would spend in time. Some people devote significant time and effort to saving money. They might be better off earning more instead of trying to save every penny. What is your time worth? 

Striking a Balance

I consider myself frugal, and I often have to strike this balance consciously. I come from an upbringing that celebrated sales and savings. A family is driving across town to fill up at the cheap gas station. I must look at the entire picture and break it down at a certain point. Going 10 miles out of my way will cost me about $1.40 in fuel. If I’m filling up 15 gallons of gas and saving $0.10 per gallon, when it’s all said and done, I only save $0.10, and I waste more of my time.

Now, that doesn’t mean I’ll go to ANY gas station. I still want to save money, but I will limit the distance I travel and utilize technology to achieve this goal. I use the GasBuddy app, which shows me the cheapest gas stations and their distance from me. I will then choose the cheapest one within a certain radius or in the direction I’m heading anyway. 

What does this have to do with your Family Entertainment Center? While traveling, I’ve seen that I’m not the only one who spends a dollar to save a dime in business. We do it all the time! I will mention a few instances when I lost money by being too frugal.

Equipment Purchases

There was more than one instance where I purchased used equipment. Sometimes it worked out in my favor, but many times it did not. I often spent more on parts and labor fixing the equipment than I would have if I had just purchased new equipment. This is a jagged pill to swallow and sometimes hard to admit. I would never buy a new car because it loses value as soon as you drive it off the lot. However, I have found that many other factors affect business. In addition to the cost of parts for repairs, there is also the cost of labor. Plus, there is a loss of revenue. 

How much money am I losing daily because this game or ride is down? This is the main reason that experienced operators will often have many extra parts and will frequently pay a significant amount for overnight parts they need when a game or ride is down. Sometimes it seems ridiculous to pay hundreds of dollars in shipping, but when you run your revenue numbers, you lose more than that each day that you don’t have the machine operational.

This is another reason that experienced operators have a maintenance staff, and they are one of your most valuable staff members. Spending MORE money to hire the right person or persons to maintain your equipment and have a proactive, preventative maintenance program will save you much more than you will pay on their salary. 

Arcad Maintenance

When looking for someone to maintain your arcade games, look for someone who can repair them down to the component level. Again, this is like the fuel analogy earlier…just because it’s cheaper doesn’t mean it won’t cost you more in the long run. Am I saying that you shouldn’t look for a bargain or never buy a used game? Not at all. I purchased a Slam-A-Winner at an auction for $25, and it proved to be a workhorse that generated me significantly more money than that. Sometimes, used equipment is great, but sometimes it’s not. Try to see the WHOLE picture and weigh the risks and all the potential costs before deciding one way or the other.

Redemption products

I’m sure I’m the only one who has done this, but have you ever purchased a large quantity of an item only to find out that half of them don’t work or break shortly after selling them to the customer? My fondest memory was a laser pointer. They would fly off the shelves. Everyone liked them. And the price point was excellent. But I soon discovered why they were so cheap…. because they were cheaply made. I’m sure I had just as many returned as I sold. Although most redemption companies are great about offering credit for damaged or non-working merchandise, sometimes the damage is already done, with your frustrated guest and a lower guest satisfaction rating. Redemption is a balance. You want to have a high perceived value. 

Choosing Products

You are looking for items that people want that are inexpensive but not cheap. This is one of those areas where the few cents you may save on an item will have a prohibitive cost in the long run if you have frustrated guests who feel like you are selling them junk. Buying expensive stuff that never moves from your shelves will also cost you. Just like in a retail environment, you are going out of business if you aren’t selling stuff. You WANT to see customers winning and turnover in your redemption merchandise. That signifies that you are generating revenue and will keep your guests coming back. 

Hiring

This applies to anyone you hire, including staff, vendors, and independent contractors such as consultants and accountants. This often stems from the adage, “You get what you pay for.” I quickly realized that the first time I decided to hire an accountant rather than try to do my taxes, the money I saved in hiring an expert was MUCH more than what I paid him. This can be true with anyone that you hire. Your front-line staff can impact your bottom line and guest satisfaction…. positively and negatively. 

Consider this: a raise of $0.50 per hour comes to $20 per week, based on a 40-hour work week. If that employee worked an entire 52 weeks, 40 hours a week, it would only cost you an extra $1,040. Now, consider how broad your hiring pool becomes and the quality of employees you will find by raising your wages slightly.

I can assure you that a good employee with a strong work ethic will be worth significantly more than the additional compensation you are paying them, and they will contribute substantially to your bottom line. Your place will be cleaner, your turnover will decrease, your customer satisfaction and return rates will be higher, your employee morale will be higher, and you will make more money than the extra you spend on hiring quality employees.

Finding Value

Now, not everyone who demands more money will be of high quality; you still must do your homework and ensure you hire the people who offer you good value. Don’t just hire the most expensive consultant and assume they are the best because they are the most costly. As with anything, research and check references (ask for excellent AND bad references). When hiring anyone, including vendors, consultants, and employees, you will always want to ask negative questions: “Tell me about a project that didn’t make it or turn out right.”  Find people who can own up to problems and not blame others, but learn from life lessons.  

The art of saving money is truly an art form that anyone can learn, but you must realize that it IS a delicate balance. Sometimes, the cheapest option isn’t always the best and can be more costly in the long run. Try to approach each transaction and decision by weighing all the factors, and don’t forget that your time also has value. If you’re wasting too much time shopping around to save a few cents, it may not be worth it.      

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