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Key Takeaways
- The average monthly operating cost required to sustain an axe throwing venue is approximately $51,600, totaling nearly $619,140 annually in Year 1 OpEx.
- Payroll ($26,250/month) and fixed rent ($10,000/month) are the dominant expenses, accounting for the majority of the venue's high fixed cost structure.
- Despite a fast projected break-even timeline, a substantial minimum cash requirement of $697,000 is necessary upfront to cover initial capital expenditures and early operating losses.
- Achieving the projected $218,000 Year 1 EBITDA requires aggressive volume targets, as variable costs are projected to consume 133% of the initial revenue forecast.
Running Cost 1 : Venue Rent
Fixed Venue Cost
Your venue rent is fixed at $10,000 monthly, hitting $120,000 annually. This is a significant fixed overhead you must cover before any variable costs come into play. That's a hefty chunk of change to secure the physical space.
Rent Inputs
This cost covers the physical location needed for the throwing lanes and lounge area. The $10,000 estimate derives from local market rates based on required square footage. Since it's fixed, you pay this regardless of ticket sales. It’s one of the first large outflows in your startup budget. It's defintely a non-negotiable baseline.
- Estimate based on square footage.
- Annual cost is $120,000.
- Fixed cost paid monthly.
Rent Optimization
Reducing fixed rent is hard once you sign the lease. Focus on negotiating tenant improvement allowances upfront to shift build-out costs. Avoid signing for space larger than needed; excess square footage directly inflates this fixed burden. Keep your footprint lean.
- Negotiate build-out credits.
- Avoid oversized footprints.
- Lock in longer lease terms.
Fixed Cost Hierarchy
Because rent is fixed, your break-even point depends heavily on volume covering this $10k/month. If your payroll ($315,000 annually) is the largest cost, rent is the second largest fixed commitment you must service before generating contribution margin from axe throws or F&B sales.
Running Cost 2 : Staff Payroll
Payroll Dominance
Staff payroll is your single largest expense category, hitting $26,250 monthly. This amounts to $315,000 annually in 2026 before you even factor in required benefits. You must manage these 75 FTEs like gold.
Staffing Inputs
This cost covers Coaches, Bartenders, and Managers required to operate the venue safely and serve drinks. To estimate this, you need the agreed-upon average wage rate multiplied by the total scheduled hours for all 75 FTEs. This is a fixed commitment that scales poorly if demand dips. Honestly, this number is huge.
- FTE Count: 75 (Coaches, Bartenders, Manager)
- Monthly Cost: $26,250
- Annual Cost (2026): $315,000
Controlling Labor Spend
You control this cost by aggressively matching staff scheduling to expected hourly revenue, especially around your high-margin beverage sales. A common mistake is scheduling too many coaches during slow periods, killing contribution margin. If onboarding takes 14+ days, churn risk rises.
- Tie scheduling to revenue density.
- Cross-train staff to cover gaps.
- Audit overtime usage weekly.
The Break-Even Impact
Since labor is your biggest fixed cost, achieving your revenue targets is critical just to cover payroll and rent. If you can reduce your required FTE count by just two people through better scheduling, you save about $8,400 annually. That’s real money.
Running Cost 3 : F&B and Merchandise Inventory
Inventory Cost Weight
Your total Cost of Goods Sold (COGS) hits 74% of revenue, equaling $57,609 yearly. This is heavily weighted by the 58% share from Food & Beverage sales and 16% from Merchandise. You need tight control here to make the overall model work.
COGS Calculation Inputs
This 74% COGS figure covers the direct costs of items sold, mainly consumables and retail goods. The $57,609 total annual COGS breaks down into 58% for Food & Beverage ingredients and 16% for physical merchandise stock. You calculate this by tracking inventory purchases against sales volume.
- F&B drives the majority of inventory expense.
- Merchandise is a smaller, but still significant, cost.
- Total inventory cost is high relative to other variables.
Managing High Inventory Costs
Manage these high costs by locking in better supplier rates for craft beverages and food plates. Since F&B is the biggest driver at 58% of COGS, reducing waste is defintely critical. Also, track merchandise turnover closely; slow-moving stock ties up cash.
- Negotiate volume discounts with beverage distributors.
- Audit portion control for all shareable plates.
- Set minimum stock levels for fast-moving retail items.
Margin Focus
Your 74% inventory cost dwarfs the 34% spent on axe and target maintenance. This signals that optimizing your bar and kitchen purchasing strategy provides a much bigger margin lever than obsessing over wood replacement schedules.
Running Cost 4 : Target and Axe Maintenance
Axe Maintenance as Variable Cost
Axe maintenance is a significant variable expense, hitting 34% of revenue, projecting to $26,469 annually by 2026. This cost directly scales with customer volume, covering the consumables needed to keep the experience safe and fun. You must track this closely against bookings, as it’s the second largest variable cost after F&B.
Inputs for Maintenance Budget
This line item covers all physical wear and tear on the throwing lanes. To forecast accurately, you need the cost per replacement axe head, the average lifespan of a lane's backer wood, and the frequency of professional sharpening services. It’s a direct function of lane utilization, so model it as a percentage of gross transactions, not just fixed time.
- Cost per replacement axe head.
- Backer board replacement cycle time.
- Sharpening service fees per unit.
Controlling Wood and Steel Costs
Managing wood replacement is key since it's the bulk of this 34% cost. Negotiate bulk pricing for your lumber supplier or look into alternative, longer-lasting wood treatments for the targets. Also, train coaches to spot early damage, preventing minor wear from becoming catastrophic failure requiring premature replacement. Don't defintely let staff use substandard materials.
- Bulk buy lumber contracts now.
- Standardize wood treatment protocols.
- Train staff on early damage ID.
Efficiency Check
Since this cost is 34% of revenue, it acts as a strong indicator of operational efficiency. If your maintenance costs spike above the $26,469 projection without a corresponding revenue jump, you’re likely wasting materials or your equipment lifespan estimates are too aggressive. Watch this ratio against competitor benchmarks.
Running Cost 5 : Utilities and Insurance
Fixed Overhead Hit
Your fixed utility and insurance overhead locks in $2,000 monthly, totaling $24,000 annually, regardless of how many axes you throw. This predictable cost must be covered by your hourly ticket sales before you see any real profit.
Cost Breakdown
This $24,000 annual commitment covers necessary operational inputs like electricity for lighting and HVAC, plus mandatory property insurance coverage. To budget accurately, you need firm quotes for insurance based on venue size and finalized utility estimates for the specific square footage. This is pure fixed overhead.
- Utilities estimate: $1,500 per month
- Insurance estimate: $500 per month
- Total fixed annual cost: $24,000
Managing Fixed Spend
Since these are fixed, direct cuts are tough, but you can manage them through diligence. Always shop insurance quotes annually; don't auto-renew your policy. For utilities, invest early in LED lighting and efficient HVAC maintenance to keep the $1,500 estimate from creeping up next year.
- Shop insurance quotes every year
- Focus on energy efficiency upgrades
- Don't let estimates become defintely higher
Overhead Context
Compare this $2,000/month against your $10,000 rent; utilities/insurance are 20% of your base occupancy cost. If revenue dips, this fixed spend immediately pressures your contribution margin, making payroll and COGS the next levers to watch.
Running Cost 6 : General Marketing Budget
Fixed Marketing Pool
General marketing receives a fixed allocation of $2,000 monthly, totaling $24,000 annually for promotion efforts. This spend is strictly separate from paying the Marketing Coordinator's salary. You need to track this spend against customer acquisition goals closely.
Budget Scope
This $24,000 yearly budget covers external promotion, like local ads or digital boosting, distinct from personnel costs. It's a fixed commitment, unlike variable costs like COGS, which are projected at 74% of revenue. If you hire a coordinator, their salary is an additional fixed operating expense.
Optimization Tactics
Since this is fixed, performance tracking is key to justifying the spend. Avoid spreading it too thin across too many channels. Focus on high-intent local searches targeting young professionals for better ROI. You should defintely test small digital campaigns before committing the full amount.
Reallocation Risk
If initial marketing tests fail to drive traffic, you must reallocate this budget fast. Don't let $2,000 per month sit idle on ineffective ads. Consider shifting funds toward local partnerships or referral incentives to boost immediate bookings for your axe throwing venue.
Running Cost 7 : Administrative Overhead
Fixed Overhead Baseline
Your baseline administrative overhead for essential back-office functions is fixed at $1,300 monthly. This covers compliance, operations tech, and site safety basics, totaling $15,600 annually before considering major costs like rent or payroll. That’s your floor.
Cost Breakdown
This fixed administrative cost is the minimum required to operate legally and securely for your axe throwing venue. It bundles compliance services with necessary technology subscriptions. You need firm quotes for legal retainer and security monitoring to lock this number down. Here’s the quick math:
- Accounting/Legal retainer: $800/month
- Essential software subscriptions: $300/month
- Basic site security monitoring: $200/month
Controlling Admin Spend
Don't let these small fixed costs balloon through scope creep or unnecessary upgrades. If you pay for premium software tiers or over-engineer compliance when starting small, this overhead eats into contribution margin fast. Defintely review software licenses quarterly against actual usage. Good operators keep this lean.
- Bundle legal and accounting services.
- Negotiate annual software contracts.
- Ensure security covers only necessary zones.
Covering Overhead
Since this $15,600 is non-negotiable, you must cover it with revenue before paying staff or buying inventory. Aim to cover this cost using revenue generated from your first 100-120 throwing sessions monthly, assuming average ticket prices hold. That’s the minimum sales volume needed just to break even on compliance.
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Frequently Asked Questions
Typically $51,600 per month, with payroll ($26,250) and rent ($10,000) being the largest components Total annual operating costs are projected at $619,140 in Year 1, yielding an EBITDA of $218,000;