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Key Takeaways
- Axe throwing venue owners can achieve substantial EBITDA, potentially exceeding $565,000 by Year 3 and growing past $1 million by Year 5.
- Starting an axe throwing venue requires significant initial capital, demanding approximately $363,000 in CAPEX plus a minimum $697,000 cash reserve for startup operations.
- High profitability hinges on near 99% gross margins on core throwing sessions, significantly boosted by optimizing high-average-value revenue streams like private events and F&B sales.
- Ongoing profitability is heavily influenced by controlling the largest expense categories: labor costs (reaching $485,000) and managing substantial annual fixed overhead of $191,600.
Factor 1 : Revenue Mix and Scale
Scale Drivers
Overall scale hinges on hitting 25,000 sessions annually by 2028 and maximizing high-value private events, projected at $1,325k that year. Your immediate focus must be lifting the average revenue per guest beyond the core $3,700 session fee through strategic beverage and food attachment.
Revenue Inputs
Calculating total revenue requires tracking two main inputs: volume and average spend per transaction. You need precise daily session counts to hit the 25,000 annual target. Also, track the mix between standard sessions (priced at $3,700 in 2028) and private events, which generate $1,325k.
F&B Upsell Lever
To boost the overall take, focus ruthlessly on the F&B attachment rate, aiming for the $1,600 AOV benchmark. This upsell is crucial because the core throwing revenue is relatively fixed. Here’s the quick math: if you sell 25,000 sessions, even a small increase in per-guest spend defintely impacts the bottom line before considering fixed overhead.
Guest Value Calculation
To understand true guest value, calculate the average revenue per guest (ARPG) by combining the session fee with F&B spend. If the $3,700 session fee covers a group, the $1,600 AOV attachment must be carefully allocated across that group size to determine per-person profitability. This ARPG drives your marketing spend limits.
Factor 2 : Gross Margin Efficiency
Gross Margin Efficiency
Your overall Cost of Goods Sold (COGS) looks very lean at just 11% of revenue by 2028. This margin is fragile because F&B inventory costs are high relative to its sales mix. Keep a tight leash on food and beverage stock levels to protect the near 99% gross margin you get from core throwing revenue. That margin is where the real profit engine sits.
COGS Breakdown
COGS covers the direct costs for items sold, mainly F&B inventory. While throwing revenue has almost zero direct cost, F&B inventory makes up 57% of F&B sales costs. Since total COGS is only 11% of total revenue, F&B sales must be a small slice of total income, but its internal margin is thin. You need to watch this closely.
Controlling F&B Waste
You must manage F&B inventory like it's gold, honestly. Excess spoilage or theft directly attacks your overall gross margin, which is currently excellent. Focus on optimizing ordering cycles for perishables; if you don't control F&B waste, that 11% COGS figure will creep up defintely fast. That’s a real profit killer.
- Track F&B waste daily, not monthly.
- Ensure bartenders log all comps immediately.
- Negotiate better terms for non-perishable stock.
Margin Protection
The core business runs on high-margin activity fees. If F&B inventory management slips, you risk turning a 99% margin activity into a 95% margin activity just by absorbing unnecessary food and drink costs. Control the stockroom, control the profit.
Factor 3 : Fixed Operating Costs
Fixed Cost Hurdle
Your $191,600 annual fixed costs create a high hurdle rate for profitability. Rent alone consumes $120,000 of that yearly spend. Because the base cost is high, every session sold after you cover overhead contributes significantly to your operating profit.
Cost Inputs Defined
Fixed costs represent expenses that don't change based on how many axes you throw or drinks you sell. The biggest input here is the lease agreement. You need the signed lease terms to lock in the $120,000 annual rent figure. Other fixed items include insurance and core management salaries, totaling $71,600 outside of the lease.
- Rent: $10,000 per month.
- Other Fixed: $5,967 monthly average.
- Total Base Cost: $15,967 monthly.
Managing High Overhead
You can't easily cut rent once signed, so the lever is maximizing volume. High utilization spreads that fixed cost base thin across more revenue streams. Focus on filling prime weekend slots first; if you miss that window, the week gets tough. You must manage utilization defintely.
- Maximize private event bookings.
- Drive weekday traffic aggressively.
- Ensure high session conversion rates.
Breakeven Leverage
This cost structure means your breakeven point is high and non-negotiable. If utilization dips below the required threshold—say, if you only hit 80% capacity instead of the planned 95%—the resulting profit margin erosion is swift. Every session sold after breakeven is pure operating income.
Factor 4 : Staffing and Labor Costs
Labor Cost Warning
Labor is your top expense risk, hitting $485,000 in total wages by 2028. You need tight scheduling for your 50 Axe Coaches and 30 Bartenders to ensure every hour worked drives strong contribution margin per session.
Staff Cost Structure
This $485k projection hinges on managing 80 full-time equivalents (FTEs) across two key roles. The target salary for Axe Coaches is $40,000, while Bartenders are budgeted at $35,000 annually. If you staff up to the full 50 Coaches and 30 Bartenders, the potential gross payroll is much higher than $485k, meaning utilization must be low or the $485k is for a partial year/lower utilization. Here’s the quick math on the structure:
- Coaches: 50 FTE at $40k salary basis.
- Bartenders: 30 FTE at $35k salary basis.
- The gap between potential payroll and the $485k budget shows scheduling efficiency is paramount.
Scheduling Efficiency Levers
To keep labor costs under $485k while scaling to 25,000 sessions annually, you can't afford idle time. Since coaches are paid a fixed rate, their cost must be directly tied to revenue-generating activity. Overstaffing during slow weekday afternoons will crush your contribution margin. What this estimate hides is the cost of benefits and payroll taxes, which will add 20-30% to the base wage. You need to track this defintely.
- Tie Coach hours directly to booked sessions.
- Use Bartenders for F&B upselling during peak times.
- Avoid scheduling full staff for low-volume weekday slots.
Watch Utilization Closely
If onboarding Axe Coaches takes 14+ days, churn risk rises, forcing you to pay overtime or rush training, which impacts safety standards. You must model labor cost as a percentage of revenue per hour staffed, not just a fixed annual number, to protect your margins.
Factor 5 : Pricing Strategy
Pricing Leveraged Growth
Raising the standard session price from $3,500 in 2026 to $3,700 by 2028 directly increases top-line revenue without touching fixed overhead. Also, capturing corporate volume via strategic private event pricing at $530 per session in 2028 locks in high-margin cash flow.
Margin Protection
Core throwing revenue enjoys nearly 99% gross margin because Cost of Goods Sold (COGS) is almost zero. The main variable cost related to volume is maintenance. You must track maintenance at 34% of revenue closely, as wear and tear scales defintely with 25,000+ annual sessions.
Boost Per Guest
Maximize revenue per guest by focusing on F&B attachment, aiming for the projected $1,600 Average Order Value (AOV) across all streams. Since F&B COGS is 57% of F&B sales, tight inventory control is essential to keep overall COGS near 11% of total revenue.
Fixed Cost Leverage
Since annual fixed costs total $191,600, mainly driven by $120,000 in rent, every dollar earned from the $200 session price increase flows almost directly to profit once breakeven utilization is hit.
Factor 6 : Variable Maintenance Load
Maintenance Cost Check
Target and Axe Maintenance is a major variable drain, hitting 34% of total revenue, meaning it scales defintely with volume. Since you project over 25,000 sessions yearly, this operational expense requires constant, granular tracking to protect margins.
Inputs for Maintenance
This cost covers replacing axes and repairing the wood targets themselves due to high impact. To model this accurately, track the average lifespan of an axe head versus the number of sessions run. You need unit cost data for new axes and lumber estimates tied directly to throughput volume metrics.
- Track axe replacement rate.
- Log lane board repairs.
- Link cost to session count.
Controlling Wear and Tear
Managing this 34% cost requires operational discipline, not just bulk purchasing. Aggressive coaching standards reduce premature breakage, which is a common hidden cost driver. Focus on coach training to ensure proper throwing technique is taught immediately to minimize damage.
- Improve coach technique training.
- Source durable, cost-effective targets.
- Negotiate bulk pricing on replacement axes.
Maintenance as Variable COGS
Treat this expense like Cost of Goods Sold (COGS) for your core activity, even though it’s often classified as OpEx. If your session price increases by 3% but high traffic pushes maintenance costs up by 5%, your actual margin per thrower declines. This expense directly eats into your contribution margin.
Factor 7 : Ancillary Revenue Streams
Ancillary Uplift
Ancillary income streams are small but mighty contributors to your bottom line. By 2028, Arcade Games, Locker Rentals, and Sponsorships combine for $5,100 monthly revenue. Since these streams carry very low variable costs, they significantly boost overall profit margins. That’s pure upside.
Ancillary Input Needs
These three streams—Arcade Games ($1,400), Locker Rentals ($700), and Sponsorships ($3,000)—are projected to hit $5,100 in 2028. Estimate requires tracking usage rates for lockers and arcade play, plus securing specific local sponsorship deals. This revenue is separate from your main session fees.
Boosting Small Income
Because these streams have near 99% gross margin potential, focus on maximizing volume, not nickel-and-diming. Ensure sponsorship contracts clearly define deliverables and payment terms upfront. For lockers, price them based on perceived convenience, not cost. You’ll want to defintely bundle these with high-value private events.
Margin Multiplier
This $5,100 monthly ancillary revenue is crucial because it hits the bottom line hard. Since variable costs are minimal, this income flows almost entirely past your $191,600 fixed overhead, directly boosting net income from the 25,000 sessions you run.
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Frequently Asked Questions
A stabilized Axe Throwing Venue can generate $565,000 in EBITDA by Year 3, based on $136 million in revenue Profitability is high because gross margins approach 99%, but you must cover $485,000 in wages and $191,600 in fixed costs before calculating owner distribution