Advice on Opening a Game Store!
- Thread starter RatPunk
- Start date
Uruk said:
Lafayette and Bloomington also already have their share of game stores, including a Game Preserve in each.
While I won't give away my exact location just yet (one never knows who reads the boards...
), I will say that since the store will be fairly small, I'm hoping I can use sort of a "regional" approach with the other towns/schools in the area and generate a decent clientele. There are at least 6 large high school supporting communities within a 15-20 minute drive of my location, and a college if I extend that radius to 30. Given the small initial nature of the store, I think it has potential. Plus, the town I'm in isn't incredibly small (I've seen smaller with game/comic stores) and it has, I think, a larger than average sized gamer base.This is from experiance of shopping rather than running a store.
As has already been mentioned air conditioning is very important.
Keep the store clean, the number of stores that I have been to where there is a layer of dust over everything and rubbish over the floor is unbelievable.
Have decent lighting. For some reason alot of gamers seem to think using 40w bulbs adds atmosphere, personally I just think it makes the place look grimey and uninviting.
Don't have too much stock on display. One of my local gaming stores has the shelves jammed full of books that it was difficult to get one out and all but impossible to put it back. The books were also wrapped in loose plastic bags making the spines unreadable.
Have signs saying where products are.
Don't have staff eating in the store, someone sitting behind the till eating a burger king is not very pleasant when they are handling your items. Plus the smell.
Try to discourage either your or staffs friends just hanging around the store discussing fantasy and the like. From what I have seen this little gangs rarely buy anything, discourage and even intimidate new customers as well as distracting staff from actually doing their job of helping people.
Change the decor now and then, there are still stores out there advertising AD&D because the owner likes the poster. It doesn't really tell people about new produsts though.
Most of the gaming stores that I know that run events usually hold them on a Sunday. The store wouldn't normally be that busy so having the extra people around doesn't get in the way of normal business.
And finally be professional. Keep regular opening hours, treat customers in a polite frriendly matter and not as if they should be lucky to be allowed to shop there.
As has already been mentioned air conditioning is very important.
Keep the store clean, the number of stores that I have been to where there is a layer of dust over everything and rubbish over the floor is unbelievable.
Have decent lighting. For some reason alot of gamers seem to think using 40w bulbs adds atmosphere, personally I just think it makes the place look grimey and uninviting.
Don't have too much stock on display. One of my local gaming stores has the shelves jammed full of books that it was difficult to get one out and all but impossible to put it back. The books were also wrapped in loose plastic bags making the spines unreadable.
Have signs saying where products are.
Don't have staff eating in the store, someone sitting behind the till eating a burger king is not very pleasant when they are handling your items. Plus the smell.
Try to discourage either your or staffs friends just hanging around the store discussing fantasy and the like. From what I have seen this little gangs rarely buy anything, discourage and even intimidate new customers as well as distracting staff from actually doing their job of helping people.
Change the decor now and then, there are still stores out there advertising AD&D because the owner likes the poster. It doesn't really tell people about new produsts though.
Most of the gaming stores that I know that run events usually hold them on a Sunday. The store wouldn't normally be that busy so having the extra people around doesn't get in the way of normal business.
And finally be professional. Keep regular opening hours, treat customers in a polite frriendly matter and not as if they should be lucky to be allowed to shop there.
Other Thoughts...
A lot of good info has been covered already, but I will add a few other resources/thoughts:
Homework Resources
(1) Check with the local community college or adult learning extension to see if they have a small business course. If they do, take it.
(2) Set up an appointment with your local SCORE office (Service Corps of Retired Executives). Check this site:
SCORE
The expertise of the counselors is variable, but ideally you would get hooked up with someone who has experience in specialty retail.
(3) Ditto with the local SBA office. Check this site:
SBA
(4) Check with the local colleges to see if there are any MBA programs. If so, speak with the professor's about having your proposed business be a case-study for the class. They may say "No", but it is a great way to get sharp minds to put together a business plan for your project.
Legal/Financial
(1) This has already been mentioned, but buy an hour of an attorney's time who specializes in small business issues. The form your small business takes - sole proprietership, partnership, Limited Liability Company (LLC), Sub-Chapter S Corporation (S-Corp) and Sub-Chapter C Corporation (C-Corp) - depends on what level of personal liability you want to expose yourself to and how you want your losses (in early years) and profits (hopefully, in later years) treated from an income tax standpoint. With sole proprieterships/partnerships, you have full personal liability for debts incurred by the business. LLCs and S-Corps offer protection for your personal assets, except in cases of fraud, although anything you put into the business is at risk. C-Corps offer the best protection for personal assets, but are more costly and time-consuming to manage than the others. Make this decision one of the first steps in building your business plan.
(2) Same thing for an accountant; buy a hour of time to explore the ins and outs of tax issues for the various business forms. The attorney will approach things from a liability standpoint, the accountant from a taxes and cash-flow standpoint. Again, use someone who specializes in small business issues. You will pay more, but it is worth it.
(3) You may also want to consider consulting with a certified financial planner to review your own personal financial situation, insurance coverage, etc. A planner that works on an hourly basis, with no sales pitches, can be found here:
GPN
Funding/Location
(1) Making sure you are not underfunded is critical. If you put together a good business plan, you are going to have considerable expenses before you ever open your doors. Accounting and legal fees, business license, space upfit, inventory, business insurance, grand opening advertising, phone system, yellow pages...the list goes on and on.
In addition to making sure you have enough operating capital for the store (6 months is an absolute minimum, 12 months is better, 18 months is ideal, IMO), you have to ensure that you and your family have enough money to live on (rent/mortgage, food, life and health insurance, auto, etc). If you are leaving employment to start the shop and your health insurance is currently provided by your employer, be prepared for sticker shock to replace the coverage on your own.
(2) Funding sources, aside from personal funds and family, can be problematic, particularly if you have no previous experience in the specialty retail area. You can start with the SBA...they have a microloan program (up to $25,000 IIRC) direct from SBA. For most other loan programs, you will have to deal with an SBA-approved bank or other lender.
It is critical you have your sh*t together before your first meeting with a potential lender. Have your business plan locked wired tight, make sure it has been reveiwed by 3-5 sets of experienced eyes, have all of your personal financial info up-to-date, etc. You are looking at this business with passion, bankers look at it (and you) as a risk. Get a copy of your credit report ahead of time to ensure you don't have any blemishes, since they will make you personally guarantee the loan in most circumstances.
Consider having your wife[/b] be the actual president/owner/senior partner for the business. Why? Because there are many loan programs out there specifically for women and minority owned business that are more generous and/or easier to qualify for than if you are a middle-aged white guy with a crazy dream!
(3) Location, Location, Location: Make sure you double-check your assumptions on your distance from your customer base. Most research I have seen is that most potential patrons won't drive more than 5-10 miles to patronize an establishment unless you are in a very rural area. When talking to property managers of particular sites, ensure you get a history of what stores have failed in that location.
If specialty retailers keep coming up, then the location is probably not a very good one. Proximity to public transportation and/or major road arteries is absolutley key, particularly if you are going to rely on the 10-16 crowd for a good portion of your sales.
Good luck with everything...just make sure you do your homework!
~ Old One
A lot of good info has been covered already, but I will add a few other resources/thoughts:
Homework Resources
(1) Check with the local community college or adult learning extension to see if they have a small business course. If they do, take it.
(2) Set up an appointment with your local SCORE office (Service Corps of Retired Executives). Check this site:
SCORE
The expertise of the counselors is variable, but ideally you would get hooked up with someone who has experience in specialty retail.
(3) Ditto with the local SBA office. Check this site:
SBA
(4) Check with the local colleges to see if there are any MBA programs. If so, speak with the professor's about having your proposed business be a case-study for the class. They may say "No", but it is a great way to get sharp minds to put together a business plan for your project.
Legal/Financial
(1) This has already been mentioned, but buy an hour of an attorney's time who specializes in small business issues. The form your small business takes - sole proprietership, partnership, Limited Liability Company (LLC), Sub-Chapter S Corporation (S-Corp) and Sub-Chapter C Corporation (C-Corp) - depends on what level of personal liability you want to expose yourself to and how you want your losses (in early years) and profits (hopefully, in later years) treated from an income tax standpoint. With sole proprieterships/partnerships, you have full personal liability for debts incurred by the business. LLCs and S-Corps offer protection for your personal assets, except in cases of fraud, although anything you put into the business is at risk. C-Corps offer the best protection for personal assets, but are more costly and time-consuming to manage than the others. Make this decision one of the first steps in building your business plan.
(2) Same thing for an accountant; buy a hour of time to explore the ins and outs of tax issues for the various business forms. The attorney will approach things from a liability standpoint, the accountant from a taxes and cash-flow standpoint. Again, use someone who specializes in small business issues. You will pay more, but it is worth it.
(3) You may also want to consider consulting with a certified financial planner to review your own personal financial situation, insurance coverage, etc. A planner that works on an hourly basis, with no sales pitches, can be found here:
GPN
Funding/Location
(1) Making sure you are not underfunded is critical. If you put together a good business plan, you are going to have considerable expenses before you ever open your doors. Accounting and legal fees, business license, space upfit, inventory, business insurance, grand opening advertising, phone system, yellow pages...the list goes on and on.
In addition to making sure you have enough operating capital for the store (6 months is an absolute minimum, 12 months is better, 18 months is ideal, IMO), you have to ensure that you and your family have enough money to live on (rent/mortgage, food, life and health insurance, auto, etc). If you are leaving employment to start the shop and your health insurance is currently provided by your employer, be prepared for sticker shock to replace the coverage on your own.
(2) Funding sources, aside from personal funds and family, can be problematic, particularly if you have no previous experience in the specialty retail area. You can start with the SBA...they have a microloan program (up to $25,000 IIRC) direct from SBA. For most other loan programs, you will have to deal with an SBA-approved bank or other lender.
It is critical you have your sh*t together before your first meeting with a potential lender. Have your business plan locked wired tight, make sure it has been reveiwed by 3-5 sets of experienced eyes, have all of your personal financial info up-to-date, etc. You are looking at this business with passion, bankers look at it (and you) as a risk. Get a copy of your credit report ahead of time to ensure you don't have any blemishes, since they will make you personally guarantee the loan in most circumstances.
Consider having your wife[/b] be the actual president/owner/senior partner for the business. Why? Because there are many loan programs out there specifically for women and minority owned business that are more generous and/or easier to qualify for than if you are a middle-aged white guy with a crazy dream
!(3) Location, Location, Location: Make sure you double-check your assumptions on your distance from your customer base. Most research I have seen is that most potential patrons won't drive more than 5-10 miles to patronize an establishment unless you are in a very rural area. When talking to property managers of particular sites, ensure you get a history of what stores have failed in that location.
If specialty retailers keep coming up, then the location is probably not a very good one. Proximity to public transportation and/or major road arteries is absolutley key, particularly if you are going to rely on the 10-16 crowd for a good portion of your sales.
Good luck with everything...just make sure you do your homework!
~ Old One
PatEllis15
First Post
RatPunk said:
Depending upon what your wife does you may want to rethink this. That is the plan that I always thought about when "I" dreamed your dream. But the local store here in Portsmouth NH has made it with a different Strat.
Here, the owner continued to work, insuring that he was gainfully employed, and not a burden on the family. Further, it allowed him to maintain his Health Insurance, which if you are getting from your current job will probably cost about as much as hired help!!!
He would close the store each day, and get it set for the hired help to open shop in the morning. He would also work on most weekends. Clearly still a LOT of work, but he didn't jeoporize he career, and continued to support his family, and could generat a little extra personal income to assist the store as needed.
as for other idea: I have heard from some friends that down in Baltimore MD, a game store there made a nice solid profit by having Anime for rent and sale. This is a bit of a specialty item, that is not always connected with gaming, but there is some common ground. They did very well by it... That said the store up here used to offer all kinds of sci-fi and fantasy movies for rent, but they have liquidated their inventory.... of course I CAN go rent T2 down at the local video shop, not necessarily the case with Sailor Moon et al.
Taro Sarask
Pat E
spacecrime.com
First Post
RatPunk said:
I don't know if I've said this elsewhere, but I just wanted to note it if I haven't. We started with about 50 grand. If I had a do-over, I wouldn't touch this business with less than $100,000, and would prefer $125K-$150K.
Most of the problems we've had over the last 8 years would have been avoided if we'd started with enough money in the first place.
cheers,
Last edited:
spacecrime.com said:
Thanks for the info, Chris. I had pretty much figured $100,000 was the amount to go for.
Now the next question, at least in my mind, where did you get your start-up capital? Were you completely self-financed? Did you get a bank loan? SBA? Investors? Combination of the above?
I'm interested in exploring all my options...
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