Movie Theater Startup Costs—How To Pave the Path to the Premiere
If you are planning to build a cinema house up from scratch, know that it is a game of massive investment.
In the post-pandemic world, movie theater startup costs include new elements, like business disruption insurance and advanced air filtration systems. We have prepared this guide to give you an updated insight into relevant costs and funding opportunities available to you.
The movie theater industry is brutally capital-intensive and has an existing market size of $6.3 billion in the U.S. If you have a lucrative idea to start your own theater, your initial fund outlay will vary with the type of establishment you choose.
Use this table to get a bird’s-eye view of the estimated total costs for different categories of movie theaters:
|Type of Movie Theater||Startup Cost Mix|
|Cine-complex||You need upwards of $1,500,000 for a multi-screen complex. Introducing high-tech sound or visual aspects can cost you over $350,000. Keep in mind that most cine-complexes in the U.S. are franchises, which can cost you an additional $30,000–$180,000 if you opt for this type of business|
|Single-screen||If your target audience is independent or second-run movie enthusiasts, launching a single-screen theater is a feasible startup solution that will cost you about $300,000–$1,000,000|
|Drive-ins||To start a drive-in theater, the bare minimum you need is a set of equipment and a self-owned or leasehold land. Currently, small-town drive-ins require a capital input of $250,000–$500,000|
To set up a standard medium-scale movie theater, you have to allocate your investment to several areas. We will give you the estimates of the one-off cost heads below.
Setting up your movie theater as a legal entity costs between $500 and $1,000, depending on your jurisdiction. Since theaters are public spots, you will also need to go through inspections and acquire safety permits from the local departments of health, fire, water and pollution control, etc. You can expect your total expenses in this head to be $10,000–$20,000.
If you are purchasing or leasing land, the local real estate prices will impact your investment requirement, which will be upwards of $1,000,000. Leasing premises or renovating an existing theater will cost you less right away but will increase your annual operational expenses.
Movie screening equipment will cost you more than $300,000. Purchasing furniture amounts to $150,000 per screen. You have to set aside another $300,000 for long-term assets like popcorn machines, POS (point-of-sale) machines, software, ventilation, and security cameras.
While marketing will be an ongoing expense, you have to set out at least $10,000 for initial promotion and a grand opening event.
A dedicated movie theater website helps with branding and advertising and may also include portals for easy booking. Considering the multi-functionality of such websites, you have to pay anywhere between $1,000 to $3,000 to web developers.
Anchoring a movie theater is not a one-man job. Throughout the rooting process, you need to hire professionals for one-time services, such as:
- Business plan management
- Legal consultancy
- Interior designing
It is hard to put a number on the abstract expenses involved here. Depending on the quality and quantity of services you use, you may have to spend over $10,000 for various services.
While budgeting the recurring expenses for running a movie theater, etch out a strategy to cover the following:
|Cost Center||Details and Estimates|
|Utility bills||A small-size theater pays about $5,000 in monthly utility bills|
|Personnel salaries and training||Your monthly salary commitment will be a minimum of $20,000 for a basic staff of sales operator, manager, and security personnel|
|Insurance premiums||Most movie theaters pay general liability insurance of about $10,000 annually. With the pandemic hitting the industry hard in 2020, owners are now looking into specific insurance plans that have terms like employee compensation during business disruption. You may have to pay more than $40,000 per year for such plans|
|Marketing and signage||$1,000–$5,000 per month|
|Maintenance||About $10,000 a year|
Going by the movie theater revenue figures for the past decade, about 40% of the total revenue comes from food and beverages. Hosting movies is no longer about the movies but the experience. Many new movie theaters have failed because of the lack of quality sound and amenities. The abundance of streaming services and the negative public outlook toward crowding only worsen the issue.
- Theater amenities
- Sanitation provisions
- High-end advertising that entices movie-goers
Experienced movie theater owners always recommend having buffer funds to cushion major repair expenses or a periodical loss of business.
If you are struggling to gather funds, you can reach out to several lending institutions for long-term loans or short-term credit. Loans facilitated by the SBA (Small Business Administration) and top banks have generous terms for:
The problem with requesting any loan is not the procedural intricacies but convincing the foremost lenders that you deserve to be funded. You need to articulate your profit-making idea on paper and have a good credit score, among other qualifications, to get someone to believe in you and invest.
DoNotPay understands the urgency and anxiety that comes with applying for a loan. With that in mind, we have designed our Business Loan Request Letter product to handle the chunk of the task for you.
Our app can draft and submit a watertight loan application letter on your behalf, and all you have to do is gather your personal and credit scores and follow these steps:
- Log in to DoNotPay and search for Business Loan Request Letter
- Select our product and tell us the following:
- Details about your startup
- The amount you wish to borrow
- The lending institution of your choice
- Upload the paperwork we ask you to, like:
- Cash flow statement
- Profit and loss statement
- Balance statement
Our expert robot lawyer will assess the specifics of your case and draft a formal letter with all the right information before sending the application to the lender. With a professionally structured letter at your disposal, the chances of getting your loan approved will be at an all-time high.
You can also utilize our Find Online Business Loan Lender product to look for financial assistance beyond banks.
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