40% Margins: How This Entrepreneur Built A Profitable Smash Room Business

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You know the beloved tradition of sports fans throwing TVs out of their windowafter a loss?

Not demure. Definitely not mindful.

But there are moments in life where we get mighty close to acting that way. And rage rooms were invented for those moments.

Source: Google Trends, six-month rolling average

Also known as "smash room" or "anger room," these are places you can pay to de-stress by destroying objects, from plates and bottles to full-sized appliances.

They're not "new," but demand remains high - 184k+ people around the world search for it every month, per Ahrefs (and its difficulty to rank is only 4/100).

A Trendster's Rage Room Venture

Trendster Vincent Serpico started Breakthrough Smash Roomin 2021, after his daughter spent three days in the ICU following a suicide attempt.

He spoke with us back then on how he took that idea to fruition. I caught up with him recently, where he told me that the business is still growing strong - it's got a healthy 40% profit margin and several thousands of foot traffic every month.

Here are his tips on running a successful business in the experience economy.

1) Analyze The Market and Learn From Others

He tracked down and studied 100+ smash rooms in the US, Europe, and Latin America, and set a Google alert for terms related to the industry to stay on top of new developments.

He found out what he didn't like about existing ones, and used them as opportunities to diversify.

For instance, many brand their experience around rage, and while he admits there's a market for that, Vincent wanted to focus on health and positivity.

Most smash rooms called the things they use to destroy objects "weapons," but Vincent instructed employees to call them "tools" instead.

"Weapons implies violence, and we are 100% not about violence. We're about transmuting your inner tension and stress, and getting it out," he said.

Out with the anger. Source: Trending Gifs

2) Put Customers Before Profit

"I wanted to create something like Disney," he said, "where the experience is really what makes it."

Like a scene out of The Founder, he and his wife/business partner Melissa spent days mapping out their customer flow on the floor of their new shop before they did any renovations.

They also made sure each stage of the experience favors human connection, even if it sacrifices efficiency.

Case in point: rather than watching a safety video, customers get a live safety briefing that allows employees to engage them on an emotional level and determine whether they're working through something, or just looking to have fun.

"Ask yourself, 'what can you do for the customers so that they're the happiest they can be?' Vincent said. "Focus on the value prop, and not how much money you can make."

3) Build Multiple Revenue Streams

Base fee: For the regular experience (1-5 people), Vincent simplified their pricing to one tier only. A $39 flat rate gets you a crate of smash-ables, and safety gear.

Here's the kicker: every crate is different. There are 40-50 curated crates on the floor for people to choose from - Vincent even throws in extra crunchy stuff if you're going through a divorce.

Upsells: Since the sessions aren't timed, people usually opt for "add-on" smash-able (e.g., appliances, windows, printers, etc.), making the average spend $50 per customer.

"We look like a thrift store or a pawn shop," Vincent said. "We've got keyboards, monitors, windshields, toilets, sinks, confetti bottles… whatever you need."

The most popular upsell? The "office space" bundle.

IYKYK. Source: GIFDB

Events: Breakthrough also makes money through group events and corporate events. Popular event packages include:

• Bachelor and bachelorette parties
• Birthday parties
• Family gatherings (a shocker to Vincent)

Notice how none of these revolve around rage?

To cater to evolving needs, Vincent even converted one of the four smash rooms into a "splatter room," where the experience gets a little more artistic.

He keeps the investment on supplies around 10% of revenue. They partner with local restaurants, bars, and thrift stores to get excess supply, and also bid on Public Surplusauctions.

4) Hire For Attitude and Retention

Some customers go to Breakthrough to work through difficult personal challenges, and emotions can run high. It takes a special kind of employee to handle those situations well.

Vincent says that he and Melissa hire for attitude first, and designed compensation packages to attract and retain quality talent:

• Managers → Salary + profit-share
• Hourly employees → $15-19/hr. + 10% commission on any upsells they make with no cap

"If people are your business, and they're going to make you a successful business, you've got to share with them," he said.

5) Use Influencers for Marketing

Vincent has tried a variety of marketing strategies for Breakthrough - print and online publications, billboards, LinkedIn ads, etc. - but none has worked as well as influencers.

And we're not talking about those with millions of followers.

Even influencers local to Arizona who have ~50k followers are knocking it out of the park.

They're invited to "come smash for free" and film the experience. Sometimes they bring friends, but most of the time their content attracts big crowds online.

Why Smash Room Can Be Good Business

Vincent believes that smash rooms will do well even in a recession, because people will need ways to de-stress.

Besides, 75% of their customers are women in their 30s and 40s, who have:

• Quite a bit of bottled up anger, and
• Tons of spending power they're willing to use on mental health-oriented experiences

The best part about running a business like this?

You get to feel people's transformation pretty damn fast.

"It doesn't fix your problem, but it creates that space where you can say, 'if I feel this good after smashing things, that means that I have the possibility of feeling good, that I have the possibility of getting past my problems.'" Vincent said.

Topics:Entrepreneurship

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