Scaling an Event Entertainment Business

Franchise or Otherwise?

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Let’s dive in…

This week we are looking at a pretty unique kind of business. Nick Muzzatti owns Snap Entertainment which provides games, photo booth, and other entertainment rentals for corporate events and social gatherings like Bar and Bat Mitzvahs, Sweet 16s, and other celebrations in the Washington, DC area. 

Fast Facts

  • More than 85% of companies spent between $100,000 and $5 million on their events in 2023.

  • The global events industry is expected to reach $2 trillion by 2028, with a compound annual growth rate (CAGR) of 11.1% between 2022 and 2028.

  • Entertainment is the third most important reason for attending corporate events, with 38% of attendees emphasizing its significance.

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The Story

Nick has worked in the event entertainment industry for over 10 years. He managed to grow the business to about $750k in revenue and was on a great growth path until the pandemic struck.

Snap Entertainment was devastated and quickly went to zero as corporate events, Bar and Bat Mitzvahs, and birthday parties were postponed and then cancelled. He didn’t think pivoting to virtual offered many real business opportunities.

Nick used all the money he could get from various relief programs to try to keep going. He did side gigs and opened another business for a while but his heart was still in entertainment.

Nick invested early as soon as the Covid vaccines were available and it has paid off. Snap has grow every year since 2021.

Snap exceeded its pre pandemic performance doing $1.2 million in revenue in 2023. Currently projections are trending 40% higher to $1.5 - $1.7 million in 2024. 

It’s a truly inspiring story and it’s also a great business. With Gross Margins in the 50-60% range and Net Profit in the 20-30% range after Nick pays himself a market wage.

This is a great life style business but Nick is continuing to invest for the future. Snap recently expanded warehouse space from 3,000 to 7,100 sq ft and added 3 trucks.

Now Nick is looking at expanding to nearby cities like Richmond, Baltimore, and Philadelphia.

So what does it take to scale an events business like Nick's? Let's break it down.

Acquiring New Customers

Up to the $1 million revenue mark, Snap Entertainment relied heavily on referrals and relationships with event planners and venues.

As they began to max out that network, Nick invested in SEO to get the company ranking on the first page of Google searches. More recently, he's expanded into Google Ads and social media advertising to drive awareness and leads.

Expanding to New Markets

To fuel further growth, Nick is eyeing expansion to nearby cities like Philadelphia. While Washington remains his main focus, he's testing the waters in Philly with a new website and traveling for events that are booked.

Key considerations include:

  • When to establish a physical presence (warehouse, dedicated equipment, local staff) 

  • Potential to service smaller markets like Baltimore and Richmond from the DC hub

  • Documenting the expansion process and metrics to create a replicable model

Longer-Term Growth Strategies

As Nick looks to the future, potential avenues for scaling Snap Entertainment include:

  • Franchising: Systematizing the business model and providing turnkey solutions for franchisees in new markets

  • Developing proprietary games/equipment: Creating unique offerings exclusive to Snap Entertainment locations

  • Acquiring competitors: Buying out smaller players in target markets to shortcut expansion

While Nick enjoys a "lifestyle business" now, he's excited by the challenge of figuring out the best ways to scale. His passion for the industry, which helped carry him through pandemic lows, continues to fuel his growth ambitions.

The Takeaways:

1. A great lifestyle business is nothing to sneeze at. Expansion can turn a lifestyle into a nightmare if not done right. Think through growth before pursuing it.

2. Growing location based business like Snap requires a lot of documentation and processes. You need a great playbook if the owner can’t be at the new location 24/7.

3. Test demand before jumping in. Nick is smart to get his web presence set up first and to travel back and forth for events that come in. In the short term it is taxing to commute but Snap can’t afford to dump too many resources into a new location without some demand signals first.

We'll be eagerly following Nick’s journey and rooting for Snap Entertainment's continued success. Who knows - maybe you'll be playing skee-ball at a Snap franchise in your hometown sometime soon!

Keep growing,

Alan

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