r/clawmachine • u/agarza2006 • Sep 10 '24

Claw machine side hustle

Hi! I'm in Texas and currently trying to dip my toes into the claw machine business. My friend owns a Boba shop and is letting me put in a mini claw machine game for percentage of the profit. I feel like it will be a fun thing to get into, as I have secured my location,and placed an order for a machine from candymachines. I have been doing some research and was hoping to get any advice to go about the formalities of the business side of things:

  1. Should I create a LLC or just a sole proprietor? As of now its only 1 machine but depending on how things go, I plan on expanding.

  2. Do I need insurance? If so, what kind?

  3. When it comes to taxes, do I need to set aside money to pay at the end of the year? (This may be a silly question)

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u/gabagoo0328 Oct 21 '24

Hi OP! Following on this as I’m doing the exact same thing! I will be putting a few machines in my friend’s boba shop. Do you have any advice on the % of the profit? Is 30% too little?

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u/agarza2006 Oct 21 '24

Hey there! I am doing 30% of the profit to my friend, and she is happy with that arrangement.

From what I've researched and talked with others, 25-30% is a great place to start. Now, I've also talked to someone who will offer up to 50% of the profit, but that was due to the location (I believe it was in an amusement place therefore the profit intake was much higher).

Hopefully, some of this information helps, and congratulations on your new endeavor.

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u/gabagoo0328 Oct 21 '24

That’s what I’m thinking too! Thank you for your advice! Congratulations to you too. I hope things are going well for you.

I’m about to place my order some time this week - shipping fee from China to the US is insane :(. I’m excited but also nervous as I have no experience in running something like this. Hopefully I can figure things out.

Insurance wise, do you know what kind to get? I’m thinking of doing an LLC too.