What are the costs to start and maintain an ice skating rink?

The startup costs involved in opening an ice skating rink can be over $2.5 million: Construction: $1.34 million Electrical and mechanical work: $523,000 Site finishing: $109,000 Equipment: $180,000 Project management and salaries: $255,000 Project development costs: $215,000 Cutting costs will likely lead to more frequent maintenance and upkeep, so it is advised to pay more early on so you can replace less later. Visit our How to Start an Ice Skating Rink guide to learn more about the costs of starting and maintaining this business.

Should I Start an LLC for My Ice Skating Rink?

Starting a limited liability company (LLC) for your ice skating rink can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For an ice skating rink, lawsuits can arise from things like customer’s falling on the ice due to its substandard maintenance or accusations of unfairly dismissing former employees.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your ice skating rink seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for an Ice Skating Rink?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for an Ice Skating Rink

By starting an LLC for your ice skating rink, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Ice skating rinks will benefit from liability protection because of the risk of being sued for personal injuries, property damage, trademark infringement, and other things.

Example 1: Your skating rink’s logo shares many similarities with another rink in a different state and they are suing you for copyright infringement. Since your business is an LLC, limited liability protects your assets so they won’t be taken in the settlement.

Example 2: The snack bar at your rink sells food to a customer and they have a severe allergic reaction. They sue for medical expenses, pain and suffering, and loss of income. Business assets can be liquidated by the court but not personal ones, as they are protected by limited liability as an LLC.

Example 3: While moving some skates, an employee drops a pair on a customer, cutting their leg. They are rushed to the hospital and you are sued for medical expenses and loss of income. Limited liability as an LLC protects your personal assets so they cannot be taken to pay for this.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for an Ice Skating Rink

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if an ice skating rink owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Ice skating rinks rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because limited liability protection from being an LLC protects your personal assets, not your business assets.

While ice skating is relatively safe, customers can still be injured in a skating rink and may attempt to take you to court. Having insurance on your rink can help with the legal costs and protect your business assets should you find yourself in court.

Common Situations Business Insurance May Cover for an Ice Skating Rink

Example 1: One of your customers falls and breaks her arm on the rink and decides to sue your business. While your company may ultimately not be found liable because customers assume a level of risk when they participate in ice skating, it is still advisable to hire an attorney to protect yourself. The general liability insurance you have will pay for your legal defense costs, including the cost of a settlement if necessary.

Example 2: A customer is walking into the restroom when he slips in some standing water and falls, breaking his wrist. He asks that your company pay for his medical treatment. General liability insurance would likely cover this expense.

Example 3: A competing ice rink sends you a letter informing you that your new logo is too similar to theirs. The competing company files a lawsuit against your business. Your legal defense fees would be covered by your general liability insurance policy, as would any settlements if they are required.

Other Types of Coverage Ice Skating Rinks Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all ice skating rinks should obtain.

Commercial Property Insurance

You invested a significant amount of capital to start your ice skating business. If you were to lose most or all of your equipment in an unexpected event like a fire, it would be expensive to replace. With commercial property insurance, your property is protected. You can file a claim and get help with replacement costs as long as the damage was caused by a covered event.

Workers’ Compensation Insurance

Most states require employers to carry workers’ compensation insurance. With a workers’ comp policy, your employees will be covered if they are injured performing work-related duties. The policy will pay for medical treatment and will help to cover lost wages for employees that cannot work due to work-related injuries.

Commercial Umbrella Insurance

In most cases, your general liability insurance will be enough to cover your liability, but it is possible for your policy limits to be exceeded — like if you were to lose a major lawsuit. If you find yourself in a situation where your general liability insurance limits are exceeded, an umbrella policy will kick in so you don’t have to pay for the damages out of pocket.

Business Interruption Insurance

Business interruption insurance will help cover lost revenue if your business has to temporarily close due to a fire, tornado, or another covered event. This type of insurance is often offered as part of a business owner’s policy.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance, workers’ compensation insurance, and commercial property insurance.

Read our Business Insurance article for more info.

The startup costs involved in opening an ice skating rink can be over $2.5 million:

Construction: $1.34 million
Electrical and mechanical work: $523,000
Site finishing: $109,000
Equipment: $180,000
Project management and salaries: $255,000
Project development costs: $215,000

Cutting costs will likely lead to more frequent maintenance and upkeep, so it is advised to pay more early on so you can replace less later.

Visit our How to Start an Ice Skating Rink guide to learn more about the costs of starting and maintaining this business.

An ice skating rink has relatively high ongoing expenses. Expenses include electricity to keep the ice cool, maintenance, and employees.

Learn more about running an ice skating rink.

An ice skating rink charges customers to use its ice for various activities.

Learn more about starting an ice skating rink.

An ice skating rink provides ice-related activities for hockey teams, figure skating clubs, group events, and the general public. Many ice skating rinks also provide concession shops, pro shops, and arcades.

IBISWorld states that the ice rink industry is growing and brings in hundreds of millions of dollars annually.

Learn more about starting an ice skating rink.