Michael_R_Proteau
First Post
The number one cause for small business failure in any industry, let alone the hobby industry is cash flow. Make sure you have enough cash flow to pay all operating expenses for several months without needing to use current income. Without that kind of cushion, you will run into cash flow problems, which in turn will limit your ability to acquire merchandise to sell to generate the income you need to solve your cash flow problem. This will create a vicious circle and the end of the spiral will be a failed business.
The only thing brick and mortar stores have to offer over discount online retailers is a place to play and customer service. You will likely not be able to match them in selection or price, so make sure your customer service is top notch to give every customer a reason to return to your store.
Make sure you know all the local statutes regarding zoning, insurance, serving food and beverages, etc. if you are going to offer a place to play. Some localities require much higher levels of insurance if you are going to allow minors to play without parental supervision to cover liability. This in turn means you need to spend more on insurance, increasing your operating expenses. Others require separate licesnes to have vending machines or to serve food and drink on premises. Also be aware of health codes and the standards required to serve food and drink on the premises.
Know the strengths and weaknesses of your location. Is there plenty of free parking available? If you want to run events there, people need to be able to park easily and cheaply or they will not attend. Are there limits to your operating hours in a certain location? A mall location brings high traffic, but you have to set hours by their standards as a trade off, so events can be difficult to schedule. What are foot and car traffic patterns in your area?
Have a storefront that is appealing to the casual customer. Most hardcore gamers will come regardless, but if you want to increase your customer base and thus increase sales and profitability, you need ot attract new customers and turn them into repeat customers.
Track your inventory closely. Know what you have, how many units you brought in, how many units moved etc. so you can determine sales pattern and set your ordering patterns accordingly. It also aids in loss prevention and tax preparation.
Stock impulse sale items near your check out, clearly visible and accessible.
Make sure that when you work at the store, you are working and providing customer service not indulging your interests and playing games. If you hire employees, make sure they understand this is expected of them as well. Providing demos in one thing, ignoring customers to play World of Warcraft during operating hours or to play a skirmish with some buddies will only cause you hardship and difficulties in the long run.
Know your merchandise so you can answer customer questions. Make sure your employees can do this as well.
Before you decide, create a business plan (or commision one if you do not have the skills) and if you decide to acquire the store, implement it, do not ignore it. It may be a hobby store, but it is your business and your source of making ends meet unless you intend to keep your ay job as well as run the store.
Advertise effectively and efficiently. This requires knowing where you might be able to find potential new customers. An ad in a local college newspaper will likely be less expensive and more effective than a similar ad in the regular local newspaper. One local store has had great luck in advertising through the local cable company on the Sci-Fi channel and on GAC. Never underestimate the power of a yellow pages ad and getting on a store locator list via Diamond/Alliance etc. An up to date web presence and a yahoo group or something similar that allows customers to network and find fellow gamers are also effective tools at building a larger customer base and building customer loyalty.
Offer an incentive program for regular customers. You might want to model it after comic book store pull systems. When a book or a series comes out, you put aside a copy for customers who request it. This allows you to gauge number of units that are guaranteed sales and to gauge better how many you will need for in store shelf copies for casual buyer sales. This also helps you as you track inventory. A regular customer who buys all the Goodman DCC's or all the WOtC books knows the product will be there for them. You know they will sell and offer a discount on those items for the guarantee. It allows you to reward regular custmers and gives an incentive for customers to let you know ahead of time which products they will definitely buy. Again, building customer loyalty helps retain your customer base and gives you grist to compete against discount online sellers. Items that have a fast turnover keep the cashflow liquid. Tying up too much of your capital in product that is not moving is a death sentence for your business. Encourage high turnover sales so that you can afford to stock some slower moving items and keep a decent level of selection in store.
-M
The only thing brick and mortar stores have to offer over discount online retailers is a place to play and customer service. You will likely not be able to match them in selection or price, so make sure your customer service is top notch to give every customer a reason to return to your store.
Make sure you know all the local statutes regarding zoning, insurance, serving food and beverages, etc. if you are going to offer a place to play. Some localities require much higher levels of insurance if you are going to allow minors to play without parental supervision to cover liability. This in turn means you need to spend more on insurance, increasing your operating expenses. Others require separate licesnes to have vending machines or to serve food and drink on premises. Also be aware of health codes and the standards required to serve food and drink on the premises.
Know the strengths and weaknesses of your location. Is there plenty of free parking available? If you want to run events there, people need to be able to park easily and cheaply or they will not attend. Are there limits to your operating hours in a certain location? A mall location brings high traffic, but you have to set hours by their standards as a trade off, so events can be difficult to schedule. What are foot and car traffic patterns in your area?
Have a storefront that is appealing to the casual customer. Most hardcore gamers will come regardless, but if you want to increase your customer base and thus increase sales and profitability, you need ot attract new customers and turn them into repeat customers.
Track your inventory closely. Know what you have, how many units you brought in, how many units moved etc. so you can determine sales pattern and set your ordering patterns accordingly. It also aids in loss prevention and tax preparation.
Stock impulse sale items near your check out, clearly visible and accessible.
Make sure that when you work at the store, you are working and providing customer service not indulging your interests and playing games. If you hire employees, make sure they understand this is expected of them as well. Providing demos in one thing, ignoring customers to play World of Warcraft during operating hours or to play a skirmish with some buddies will only cause you hardship and difficulties in the long run.
Know your merchandise so you can answer customer questions. Make sure your employees can do this as well.
Before you decide, create a business plan (or commision one if you do not have the skills) and if you decide to acquire the store, implement it, do not ignore it. It may be a hobby store, but it is your business and your source of making ends meet unless you intend to keep your ay job as well as run the store.
Advertise effectively and efficiently. This requires knowing where you might be able to find potential new customers. An ad in a local college newspaper will likely be less expensive and more effective than a similar ad in the regular local newspaper. One local store has had great luck in advertising through the local cable company on the Sci-Fi channel and on GAC. Never underestimate the power of a yellow pages ad and getting on a store locator list via Diamond/Alliance etc. An up to date web presence and a yahoo group or something similar that allows customers to network and find fellow gamers are also effective tools at building a larger customer base and building customer loyalty.
Offer an incentive program for regular customers. You might want to model it after comic book store pull systems. When a book or a series comes out, you put aside a copy for customers who request it. This allows you to gauge number of units that are guaranteed sales and to gauge better how many you will need for in store shelf copies for casual buyer sales. This also helps you as you track inventory. A regular customer who buys all the Goodman DCC's or all the WOtC books knows the product will be there for them. You know they will sell and offer a discount on those items for the guarantee. It allows you to reward regular custmers and gives an incentive for customers to let you know ahead of time which products they will definitely buy. Again, building customer loyalty helps retain your customer base and gives you grist to compete against discount online sellers. Items that have a fast turnover keep the cashflow liquid. Tying up too much of your capital in product that is not moving is a death sentence for your business. Encourage high turnover sales so that you can afford to stock some slower moving items and keep a decent level of selection in store.
-M
Last edited: