I Opened An Arcade And Now I’m Bankrupt

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: "I Opened An Arcade And Now I’m Bankrupt"

Date: January 19, 2026
Host(s): Ken Coleman & Jade Warshaw (Ramsey Network)
Caller(s): Anonymous (Arcade Owner)

Episode Overview

This episode features a caller seeking advice after his attempt to open a community arcade resulted in significant debt and business failure. He turns to Ken Coleman and Jade Warshaw for practical guidance on whether he should file for bankruptcy or attempt to pay off the business and personal debt incurred. The discussion centers on the real challenges of small business, underestimating startup costs, and the critical importance of strategic decision-making amid financial struggles.

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Key Discussion Points & Insights

1. Situation Background & Financial Strain

• Caller and his wife started a local business, later branching out to open an arcade with community appeal.
• Initial partnership: He provided space, collaborators supplied games.
• Ran into operational issues; pivoted to purchasing their own equipment.
• Unexpected bank fees consumed their entire marketing/advertising budget, setting them back from the outset.
• Business failed to attract sufficient foot traffic; the location ultimately closed.
• They moved arcade equipment to a new location as a profit-share with a bowling alley/restaurant, but this isn’t profitable.

Quote:
"I kind of started out behind the, behind the ball on it and tried to play catch up the whole time and it just never happened."
— Caller [01:52]

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2. Financial Scope of the Problem

• Debt from arcade venture: $25,000
• Total debt (including other business activity): $68,000
• Equipment resale value is roughly half the initial investment: $10,000–$12,000.

Quote:
"Probably maybe 10, 12 [thousand]."
— Caller, estimating equipment value [04:16]

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3. Lack of Marketing and Visibility

• Marketing budget of $2,000 was lost to unforeseen bank fees.
• Inadequate signage: No sign on the building, limiting visibility and foot traffic.

Memorable Exchange:
Jade: "There's no sign on the building. There's no sign on the building."
Caller: "I couldn't get the signage. Not appropriately."
[05:18]

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4. Current Revenue Approach & Long-term Viability

• Equipment now profit-shared in another venue, bringing in minimal revenue.
• Caller hopes the new location simply covers ongoing debt payments for machines.

Ken’s probing:
Ken: "But you can't make a living on, you cannot make a living on this. Yes or no?"
Caller: "No. That is my hope for this, is that … we can just make enough to pay the payment for the debt for those games."
[06:11]

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5. Should the Caller File Bankruptcy?

• Ken and Jade advise against bankruptcy.
• Previous recommendation would have changed if debt was only $25K, but total is $68K.
• Ken: It’s not a viable business—caller needs to pivot to full-time employment.
• Jade: Urgent, decisive action required—caller must find a job, stop discretionary spending, and use all extra income to pay down debt quickly.

Key Advice:
Jade: "If the total of all your debt altogether is $68,000, … pick up a full-time job yesterday, take your wife's income, and you’re going to pay this off as quickly as possible. You're not going out to eat. You're not doing anything. You’re selling a car if you need to."
[07:45]

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Notable Quotes & Memorable Moments

• On underestimating risk:
  "Instead of going back to underwrite the additional fees … I said I'm sure it'll be fine, I can figure it out." — Caller [01:52]

• Facing the cost of missing marketing:
  "If you had a $2,000-a-month ad spend or marketing spend and that is now eaten up in fees that you didn't know were going to be there, my first intuition would be … how can I go out and earn this money elsewhere so we can get our ad spend up …" — Jade [05:07]

• Tough love from the hosts:
  "You need a full-time job. I'll just throw that out there." — Ken [06:59]
  "Cut your losses here." — Jade [07:11]

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Timeline of Important Segments

• [00:23] — Caller describes initial business venture and the pivot to an arcade.
• [01:10] — Debt details: $25,000 linked to the arcade.
• [01:52] — Caller recounts being set back by unexpected bank fees.
• [04:12] — Equipment resale value estimated at half investment.
• [05:18] — No sign on building, severely hampering visibility.
• [06:03] — Arcade games moved to profit-share model in new venue.
• [06:23] — Hosts begin to address the bankruptcy question directly.
• [06:42] — True scope: $68,000 total debt.
• [07:18] — Wife’s income disclosed ($75,000/year).
• [07:45] — Hosts’ concluding action plan: get a job, slash spending, focus on debt payoff.

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Conclusion

This episode delivers candid and practical financial coaching. The hosts highlight the pitfalls of underestimating costs, the vital role of marketing, and the emotional toll of business failure. Their tone is encouraging but direct—providing a pathway forward focused on aggressive debt repayment and a firm stance against further risking family finances in a struggling business.

Takeaway:
Cut losses, regain stability through employment, and treat the failed venture as a tough but valuable lesson in entrepreneurship and personal finance.

Transcript

[Caller]

Brought to you by the EveryDollar app. Start budgeting for free today. I'm trying to find out or figure out if you will, if maybe I should just file bankruptcy and start all over. Kind of got myself into some pickles here.

[Ken]

Okay, give us a picture. What are you facing?

[Caller]

So we started a business. My wife and I started a business here, local, where we're at was going okay. And then we decided to try to enact or start up something for the community and like an arcade and brought in some people to help us out. They had the games, we had the space, and so we were putting that together. We encountered some issues with the way things were operating so we thought we would branch out and get our own equipment and things just have not turned out to come to fruition.

[Jade]

So what have you spent on getting this arcade up and running?

[Caller]

So right now we're about 25,000 in debt on just the arcade.

[Jade]

Okay, and how long is this, how long have you been in this business venture? Has it been a year, six months more?

[Caller]

We are about a year and nine months.

[Jade]

Okay, and what's, what's the issue? Is it people just aren't showing up? Is it the prices are hot or too low, but when we raise them, it doesn't work out? Like, what's the problem?

[Caller]

Yeah, people just have not showed up. So we were unaware of some of.

[Ken]

The.

[Caller]

Startup costs from the bank to obtain the debt. And so when we went to go sign the papers, it was, by the way, here's some additional fees that need to get paid. And instead of going back to underwrite the additional fees to make sure that we were going to be able to make it happen, I said I'm sure it'll be fine, I can figure it out. And so that ended up chewing up all of our marketing and advertising budget. And so I kind of started out behind the, behind the ball on it and tried to play catch up the whole time and it just never happened.

[Jade]

How much was the advertising and marketing budget? Like how much did you see yourself spending per month or whatever it was that this debt ate up?

[Caller]

About 2000 initially.

[Ken]

Are you in a high trafficked area or kind of tucked away where nobody knows where you are?

[Caller]

So the space is in a very high traffic area or was, I should say. So we closed down the location, moved out the games to a new location. Hopefully that pays off and then just reducing the overhead. So for the last year we have just dumped all of our personal income, my wife's personal income, I'm self employed, so I Don't have any. All of her W2 into maintaining and keeping things afloat. Trying to anyways.

[Ken]

Well, you mean when you say her income, you mean any kind of margin that you guys have above all your personal bills. Then you're taking the surplus, for lack of a better word, and you're pouring that into the business. Is that what I'm understanding?

[Caller]

Yes.

[Ken]

Okay. How much is the equipment worth?

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[Ken]

How much is the equipment worth? All the games themselves.

[Caller]

If I were to sell it right now.

[Ken]

Yeah.

[Caller]

Probably maybe 10 12.

[Jade]

So half.

[Caller]

Yeah, roughly.

[Jade]

Can. Can I ask a quick question before we keep going down that trail? Because I do want to keep going down that. Do you honestly now, in your heart of hearts, after you've seen how this has played out over the last over 12 months, the 2000. Because here's where my mind goes, Ken. If you had a $2,000 a month ad spend or marketing spend and that is now eaten up in fees that you didn't know were going to be there, my first intuition would be like, well, there's nobody at the arcade. How can I go out and earn this money elsewhere so that we can get our ad spend up so that we can get people in the doors? Which leads me to ask, do you believe that even if you had spent that 2000, you wouldn't have be. You wouldn't have been able to get those folks in the door. Is that what you're realizing or do you just not know?

[Caller]

I don't know. I do believe that with the ad spend and being able to put signage on the building and the things that we were not able to do, I.

[Jade]

Think there's no sign on the building. There's no sign on the building.

[Caller]

I couldn't get the signage. Not appropriately.

[Ken]

Well, but now we're. See, I think we're. Now I think we're majoring on the miners.

[Jade]

I'm just trying to see if there's something here that's salvageable.

[Ken]

Yeah, the equipment. Now again, you may have a different take. I'M just sitting here listening.

[Jade]

Well, there's no sign on the building so nobody was going to go up in there.

[Ken]

Well, yeah, I know, but he's in a new location, not even in a high traffic location anymore. Correct.

[Caller]

So we, we put the games in a, in a separate business that has traffic that is separate in and of itself. You know, bowling alley, restaurant.

[Jade]

So you're renting them establishment, you're renting them to these places.

[Caller]

We're doing what is a profit share. So I, now I'm just getting a cut off of whatever they, they make.

[Jade]

Oh gosh.

[Ken]

But you can't make a living on, you cannot make a living on this. Yes or no?

[Caller]

No. That is, that is my hope for this is that I, we can just make enough to pay the payment for the debt for those gains.

[Ken]

And that's what I'm bringing back up. I think the question, I want to come back to the question at hand that you asked. Should you file bankruptcy? I don't think so. I think you can pay the 25 off.

[Jade]

What's your wife.

[Caller]

25, what's that? It's not just that 25.

[Ken]

What's your total debt amount?

[Caller]

Just shy of 68,000.

[Ken]

68,000?

[Caller]

Yes.

[Ken]

All right, I'll defer to Jade. I, you know, this is not a viable business. So yeah, at this point if you can get your money back on those machines over time and pay this debt off and then shut it down. But you need a full time job. I'll just throw that out there.

[Jade]

Yeah, I agree with ken. At the 25,000, I'm looking 25,000 in one year. I'm thinking there's something that can be saved here possibly. But now what you've told me with the 68,000, I think that you need to, you know, cut your losses here. What's your wife earned? What's your wife's income?

[Caller]

She, she makes about 75 a year.

[Jade]

Okay. Now this business debt, is that your, your only debt or do you have other, I'll call, quote unquote personal debt to add to the pile?

[Caller]

So, so the arcade is roughly about 25 in debt. I have my other business that I was, that was my main source of income. And because of the issues that we had with the arcade, I kind of took my focus in.

[Jade]

Okay, I'm going to cut you off because we're running out of time. If the total of your all debt altogether is 68,000 like I think that it is, you need to pick up a full time job yesterday, take your wife's income and you're going to pay this off as quickly as possible. You're not going out to eat. You're not doing anything. You're selling a car if you need to. To clear this out very quickly.

[Ken]

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