Question about business plans.
- Thread starter dm4hire
- Start date
Most business owners are not going to share their business plans that they worked for 3-6 months + on. If they've been in business a while, those plans also use their years of experience.
I suggest you go to your local chamber of commerce and ask for help with a business plan there. You can also go on amazon.com and find plenty of 5 star business plan books. Read the review and look inside to find the right book. Another approach is getting your hands on software like Business Plan Pro.
Unfortunately, the only thing you won't be getting is a business plan designed specifically for the game industry. But, that data is going to be the most valuable part of the business plan and where you are going to have to earn your dues by researching that part yourself. Good luck.
I suggest you go to your local chamber of commerce and ask for help with a business plan there. You can also go on amazon.com and find plenty of 5 star business plan books. Read the review and look inside to find the right book. Another approach is getting your hands on software like Business Plan Pro.
Unfortunately, the only thing you won't be getting is a business plan designed specifically for the game industry. But, that data is going to be the most valuable part of the business plan and where you are going to have to earn your dues by researching that part yourself. Good luck.
All of them, one would hope.
dm4hire
Explorer
Najo - thanks for your response. You hit the nail on the head in that finding good information related toward our hobby specifically is hard, since most owners keep a tight lip. Perhaps that is part of the reason our hobby tends to suffer too many casualties each year. Outside of working at a store and learning the ropes, which still might not include learning all the inside aspects, there isn't a real way to break into the business other than taking the gamble.
My expectation was that perhaps someone, realizing that I live too far away to be considered a competitor, would be willing to share their plan. That might have been hoping too much, but I figured it was worth a try. Going back to what I just mentioned it could be profittable for someone to perhaps design a generic plan and sell it as an ebook.
I'll take a look at the software you mentioned.
Thanks,
My expectation was that perhaps someone, realizing that I live too far away to be considered a competitor, would be willing to share their plan. That might have been hoping too much, but I figured it was worth a try. Going back to what I just mentioned it could be profittable for someone to perhaps design a generic plan and sell it as an ebook.
I'll take a look at the software you mentioned.
Thanks,
You might want to check your local community colleges (or online) for entepeneurship courses and/or your local library. I bet one with a good reference librarian can turn up a book you'd find helpful.
If & when you actually open your store, you'll want to have some solid ideas about which product lines and even store display arrangement. The layout of your aisles and how you present your merch can have a HUGE effect on your bottom line. Check out Paco Underhill's Why We Buy- it will change the way you look at retail space- and also his followup, Call of the Mall.
If & when you actually open your store, you'll want to have some solid ideas about which product lines and even store display arrangement. The layout of your aisles and how you present your merch can have a HUGE effect on your bottom line. Check out Paco Underhill's Why We Buy- it will change the way you look at retail space- and also his followup, Call of the Mall.
I was told by a friend of mine to come here and give advice. Take it or leave it, but you can see, I don't have a lot of history on EN World. I'm into business much more than games, by far. I've helped a business owner start a small company and move into the top 20% of their industry within one year. I've had a particular idea featured in Fast Company. I've been interviewed by Havard Business School's Newspaper- Harbus and I started a kiosk cell phone business in a mall with less than a thousand dollars- including owning the kiosk. I've been where you are. Those are my some of my credentials, believe them or don't, but regardless, here's the advice:
DON'T FOCUS ON A BUSINESS PLAN.
Here's why.
Firstly, a business plan is a piece of paper (or hopefully, several pieces of paper) that puts a whole bunch of dreams and guesses down with very little substance to back them up. Not only that, they're never, I repeat NEVER accurate. You show me someone who didn't deviate from their business plan within their first month and they'll be the absolute exception instead of the rule. They would have to get their income, costs, customer turnover, and incidental expenses correct to even have a shot and it doesn't happen. Many decide to change the focus of their business almost immediately after the first week when customers don't flock to the things they thought would sell. It's the reality and it's ok. That's what business is all about.
Secondly, people are talking about taking 3-6 months to prepare them. That's 3-6 months where you could be doing something worthwhile, like selling. Yes, you'll learn a ton by writing a business plan, but about the wrong parts of your theoretical business. There's a much better way to learn: go out, sell your product hard every day, and get your teeth kicked in a bit. It's ok, we all do it and there's no better way to learn what to do.
Thirdly, think about it this way. The absolute best people in the world offering money (angel investors) don't want a business plan. They want to be pitched and they want to be pitched in less than thirty seconds. They're going to do research after the fact but, realistically, they're making a decision to support your business after 30 seconds. A business plan that took 3-6 months to build will not be discussed in 30 seconds.
Fourth, (I think I've made my point about business plans) don't do this because you're a fan of gaming. Do this because it will make money. Period. There's no other reason to be in business than money. Yeah yeah yeah, everyone wants to talk about warm and fuzzy things like potential philanthropy, how they'll give great customer service, etc etc. None of that happens without cash in hand. That may sound cynical and people won't like me saying it, but it's the raw truth and you'll come to that conclusion sooner or later. Everything else is just a hobby. You absolutely must make sure you understand the exact amount of profit you're potentially making on any given product or line and how many sales of that product will be required to live on. Cut costs in the beginning as far as you can then find ways to cut them further. Sell what makes you money and re-invest every available penny. Your goal is to make it to the 5 year mark.
That number (5 years) is thrown around haphazardly, and I believe it's a bit inaccurate but it's fine for our purposes. Understand that when I'm talking about you making it for 5 years, it isn't some magic number that lets you succeed. Most people don't realize it, but at around the 5 year mark you're considered a cornerstone of your industry, at minimum, locally. People will forget how long you've been open. As far as they can tell, you'll be around forever since you've been around forever in their short memory span. Everything should get a bit easier at the 5 year mark or before. If it hasn't, you're doing something wrong because you should already have systems in place and you'll have new problems with growth and your approach to it. In essence, to start, you're striving to make it to 5 years by creating as much profit as possible leading up to it. That will buoy you throughout the rest of your business's life.
Fifth: Think small. It's great to dream big, but think small. Think about it this way, many food trucks make around 100k annually, obviously some make more, and many make less but the reality is they've minimized their expenses and only sell profitable products. They work when people are buying and close shop when they aren't. Many parlay them into full-fledged restaurants, it's a natural evolution, but many choose to stay in the truck business because of the reasons stated above and they're content with what they're doing. This guy ([ame="http://www.youtube.com/watch?v=NGOjFhKeLiU"]here's a video of him[/ame]) worked with almost zero overhead and was living in a penthouse in NYC while rubbing elbows with celebrities in the nicest restaurants in town. The lesson from them is not to start a gaming truck, but to identify the products you want to sell and cut costs until you can make money just doing what you're doing and be content with being the best at it. Everything else you want will come eventually. Also, be innovative in how you're going to sell product.
Sixth and probably most important: Set goals, but don't freak out if you can't achieve them. Adjust and re-engage. You'll either find a new path to that goal or you'll set different goals that are probably more important to you. Many people think that business plans are goals, and they are to a certain degree, but they're awful tools to set goals with. Also, after you spend all that time writing the plan you have a huge incentive to stick to it, even if it's wrong. You can be just as effective on a napkin. Realistically, you're probably going to be closer to not setting goals than you will be to writing a business plan- mostly because you need the flexibility.
Disclaimer: Business plans will be required to get a loan from a bank or to apply for a grant. They aren't looking at your plan, they're looking at your ability to pay if everything goes wrong. That really doesn't have anything to do with your business plan. Think about it, you don't even understand your industry well enough to create a business plan at this point. How would a random banker be able to understand it? With that being the case, if you need one, don't spend 3 months on it. Write something good, adopted from a book or reputable site, but look at it from the bank's perspective and give them reasons to be reassured you'll be able to succeed with imaginary sales figures that look pretty and grow accordingly. Be sure to display your knowledge of the industry and how you'll deal with the challenges presented in that industry (anyone can use Google to see that most gaming businesses don't make it and why).
Obviously, I'm kind of against the idea of getting a loan. I think I'd rather see you selling Monster Manuals door-to-door than see you pick up a loan for a few hundred k to get started into something where you won't know where to spend the money in the beginning anyway. If you sell enough before needing the loan, you won't need to worry about imaginary numbers on a business plan, you'll have real ones and banks would like nothing more than lending to an expanding business.
Oh, one more thing- I'm not the only one who feels this way.
DON'T FOCUS ON A BUSINESS PLAN.
Here's why.
Firstly, a business plan is a piece of paper (or hopefully, several pieces of paper) that puts a whole bunch of dreams and guesses down with very little substance to back them up. Not only that, they're never, I repeat NEVER accurate. You show me someone who didn't deviate from their business plan within their first month and they'll be the absolute exception instead of the rule. They would have to get their income, costs, customer turnover, and incidental expenses correct to even have a shot and it doesn't happen. Many decide to change the focus of their business almost immediately after the first week when customers don't flock to the things they thought would sell. It's the reality and it's ok. That's what business is all about.
Secondly, people are talking about taking 3-6 months to prepare them. That's 3-6 months where you could be doing something worthwhile, like selling. Yes, you'll learn a ton by writing a business plan, but about the wrong parts of your theoretical business. There's a much better way to learn: go out, sell your product hard every day, and get your teeth kicked in a bit. It's ok, we all do it and there's no better way to learn what to do.
Thirdly, think about it this way. The absolute best people in the world offering money (angel investors) don't want a business plan. They want to be pitched and they want to be pitched in less than thirty seconds. They're going to do research after the fact but, realistically, they're making a decision to support your business after 30 seconds. A business plan that took 3-6 months to build will not be discussed in 30 seconds.
Fourth, (I think I've made my point about business plans) don't do this because you're a fan of gaming. Do this because it will make money. Period. There's no other reason to be in business than money. Yeah yeah yeah, everyone wants to talk about warm and fuzzy things like potential philanthropy, how they'll give great customer service, etc etc. None of that happens without cash in hand. That may sound cynical and people won't like me saying it, but it's the raw truth and you'll come to that conclusion sooner or later. Everything else is just a hobby. You absolutely must make sure you understand the exact amount of profit you're potentially making on any given product or line and how many sales of that product will be required to live on. Cut costs in the beginning as far as you can then find ways to cut them further. Sell what makes you money and re-invest every available penny. Your goal is to make it to the 5 year mark.
That number (5 years) is thrown around haphazardly, and I believe it's a bit inaccurate but it's fine for our purposes. Understand that when I'm talking about you making it for 5 years, it isn't some magic number that lets you succeed. Most people don't realize it, but at around the 5 year mark you're considered a cornerstone of your industry, at minimum, locally. People will forget how long you've been open. As far as they can tell, you'll be around forever since you've been around forever in their short memory span. Everything should get a bit easier at the 5 year mark or before. If it hasn't, you're doing something wrong because you should already have systems in place and you'll have new problems with growth and your approach to it. In essence, to start, you're striving to make it to 5 years by creating as much profit as possible leading up to it. That will buoy you throughout the rest of your business's life.
Fifth: Think small. It's great to dream big, but think small. Think about it this way, many food trucks make around 100k annually, obviously some make more, and many make less but the reality is they've minimized their expenses and only sell profitable products. They work when people are buying and close shop when they aren't. Many parlay them into full-fledged restaurants, it's a natural evolution, but many choose to stay in the truck business because of the reasons stated above and they're content with what they're doing. This guy ([ame="http://www.youtube.com/watch?v=NGOjFhKeLiU"]here's a video of him[/ame]) worked with almost zero overhead and was living in a penthouse in NYC while rubbing elbows with celebrities in the nicest restaurants in town. The lesson from them is not to start a gaming truck, but to identify the products you want to sell and cut costs until you can make money just doing what you're doing and be content with being the best at it. Everything else you want will come eventually. Also, be innovative in how you're going to sell product.
Sixth and probably most important: Set goals, but don't freak out if you can't achieve them. Adjust and re-engage. You'll either find a new path to that goal or you'll set different goals that are probably more important to you. Many people think that business plans are goals, and they are to a certain degree, but they're awful tools to set goals with. Also, after you spend all that time writing the plan you have a huge incentive to stick to it, even if it's wrong. You can be just as effective on a napkin. Realistically, you're probably going to be closer to not setting goals than you will be to writing a business plan- mostly because you need the flexibility.
Disclaimer: Business plans will be required to get a loan from a bank or to apply for a grant. They aren't looking at your plan, they're looking at your ability to pay if everything goes wrong. That really doesn't have anything to do with your business plan. Think about it, you don't even understand your industry well enough to create a business plan at this point. How would a random banker be able to understand it? With that being the case, if you need one, don't spend 3 months on it. Write something good, adopted from a book or reputable site, but look at it from the bank's perspective and give them reasons to be reassured you'll be able to succeed with imaginary sales figures that look pretty and grow accordingly. Be sure to display your knowledge of the industry and how you'll deal with the challenges presented in that industry (anyone can use Google to see that most gaming businesses don't make it and why).
Obviously, I'm kind of against the idea of getting a loan. I think I'd rather see you selling Monster Manuals door-to-door than see you pick up a loan for a few hundred k to get started into something where you won't know where to spend the money in the beginning anyway. If you sell enough before needing the loan, you won't need to worry about imaginary numbers on a business plan, you'll have real ones and banks would like nothing more than lending to an expanding business.
Oh, one more thing- I'm not the only one who feels this way.
dm4hire
Explorer
Thank you very much for responding and I will definitely keep what you've said in mind. Only a fool passes on advice and I prefer to not be one. I've wondered about just talking with friends who might be interested in at least ordering from me to help get started, if not out right invest, in order to open shop. I know some distributors require a store front in order to place orders, some don't, and others are even more stringent by requiring proof of years being open and so on. You've given me a few things to think on that I hadn't thought about yet so regardless of how I get my initial funding I will definitely consider my profit margin.
As for finding a business plan I've found a few that relate toward comic shops which isn't far off from my goal that could be converted over if not just using one designed for a standard book store. If anything besides what's been mentioned I should probably at least view this as a way to learn more about this aspect of the industry whether or not I end up going into business. I appreciate all the responses so far. Thanks!
As for finding a business plan I've found a few that relate toward comic shops which isn't far off from my goal that could be converted over if not just using one designed for a standard book store. If anything besides what's been mentioned I should probably at least view this as a way to learn more about this aspect of the industry whether or not I end up going into business. I appreciate all the responses so far. Thanks!
Inferno!
Explorer
I agree completely. I started a small business 14 years ago. My business was in the black by the end of the first year. Although my business is not a game store, and of course some years are better that others, I've been in the black every year. Guess what? No business plan.
[ame=http://www.youtube.com/watch?v=YlVDGmjz7eM]YouTube - Rodney Dangerfield's First Economics Class[/ame]
Thanks for all the positive thoughts on my statements above. I worried a bit that I'd hear a lot more "don't listen to this guy, he doesn't know what he's talking about" types since I'm not a very active member. It encourages me to try helping more here any way I can and with that, I'd kind of like to offer another suggestion to dm4hire. Why don't you just present your ideas here and let the community try to help?
This will present many more problems for you because it will be difficult to wade through the advice, but I believe you'll gain both good advice which will undoubtedly surface throughout the conversations you'll have and some potential ideas that will not come from your friends and family. Don't be scared someone is going to steal your ideas. Everyone's afraid of that in the beginning, but in the real world people are both complacent and scared- they have great ideas too, but they'll never execute them out of fear alone.
I'll fire the first shot across the bow: some gaming companies require a storefront (I know for a fact Games Workshop functions that way because one of my best friends works for trade out of Memphis). They do this because they don't want a group of gamers pooling resources to buy their games at wholesale. I also know that this system has been, for a lack of a better term, "gamed" before where someone was operating out of their house in my own tiny community. I'm not suggesting that per se. I'm just saying that there are ways around it. You have to understand that Games Workshop wants their product represented and displayed well. If your friends are the only ones being exposed to the line, it isn't helping their image. With that, if you're searching for innovative ways to get their games in front of people, they may try to work with you- especially if you're documenting what you're doing so the world can see it (recommended regardless). They also may not work with you and you may have to find the cheapest storefront you can find to work as a base of operations- possibly in the worst neighborhood in your area. They set up the rules and you have to abide by them, but it's a fine line to walk. In the end, they're interested in making sales and you'll get very far by making those sales and ordering more.
Innovative way to market? Maybe you set up a party system like Pampered Chef where you bring games, give free stuff and show how to play those games all while having 5 different families show up. They provide snacks and everyone has a good time being exposed to Settlers of Catan or Munchkin or even introducing them to RPG's or tabletop miniatures games. You can be flexible and offer packages.
It's just a crazy suggestion and not guaranteed to be a success, but it qualifies in one of the ways I stated above- it has very low overhead because you're the employee. It's fun for everyone involved and you're creating wonderful opportunities for families to spend time together. It's a talking point that is both wholesome and is a boon to society. Also, if you fail, you're not out anything at all. Literally nothing except time and the product you bought to demonstrate with.
Take a chance. Open things up for people to give suggestions on the business model itself and let them fire away. Wade through the things that don't interest you or the advice you think may not be as worthwhile (including my own) and move forward. I really hope for the best and I'll be more than happy to help in any way I can. The really good business people out there will undoubtedly give you whatever they can offer (beyond money, lol) even older games they're updating or advice in dealing with common suppliers. I got advice from other business owners (competitors) in the same mall after I opened (they aren't interested in bringing in more competitors, but after you're there, many will figure "I can't get rid of them, we may as well be friends"). Business doesn't really have to be cutthroat, and by the time it becomes that way, you'll have already created something long-lasting.
This will present many more problems for you because it will be difficult to wade through the advice, but I believe you'll gain both good advice which will undoubtedly surface throughout the conversations you'll have and some potential ideas that will not come from your friends and family. Don't be scared someone is going to steal your ideas. Everyone's afraid of that in the beginning, but in the real world people are both complacent and scared- they have great ideas too, but they'll never execute them out of fear alone.
I'll fire the first shot across the bow: some gaming companies require a storefront (I know for a fact Games Workshop functions that way because one of my best friends works for trade out of Memphis). They do this because they don't want a group of gamers pooling resources to buy their games at wholesale. I also know that this system has been, for a lack of a better term, "gamed" before where someone was operating out of their house in my own tiny community. I'm not suggesting that per se. I'm just saying that there are ways around it. You have to understand that Games Workshop wants their product represented and displayed well. If your friends are the only ones being exposed to the line, it isn't helping their image. With that, if you're searching for innovative ways to get their games in front of people, they may try to work with you- especially if you're documenting what you're doing so the world can see it (recommended regardless). They also may not work with you and you may have to find the cheapest storefront you can find to work as a base of operations- possibly in the worst neighborhood in your area. They set up the rules and you have to abide by them, but it's a fine line to walk. In the end, they're interested in making sales and you'll get very far by making those sales and ordering more.
Innovative way to market? Maybe you set up a party system like Pampered Chef where you bring games, give free stuff and show how to play those games all while having 5 different families show up. They provide snacks and everyone has a good time being exposed to Settlers of Catan or Munchkin or even introducing them to RPG's or tabletop miniatures games. You can be flexible and offer packages.
It's just a crazy suggestion and not guaranteed to be a success, but it qualifies in one of the ways I stated above- it has very low overhead because you're the employee. It's fun for everyone involved and you're creating wonderful opportunities for families to spend time together. It's a talking point that is both wholesome and is a boon to society. Also, if you fail, you're not out anything at all. Literally nothing except time and the product you bought to demonstrate with.
Take a chance. Open things up for people to give suggestions on the business model itself and let them fire away. Wade through the things that don't interest you or the advice you think may not be as worthwhile (including my own) and move forward. I really hope for the best and I'll be more than happy to help in any way I can. The really good business people out there will undoubtedly give you whatever they can offer (beyond money, lol) even older games they're updating or advice in dealing with common suppliers. I got advice from other business owners (competitors) in the same mall after I opened (they aren't interested in bringing in more competitors, but after you're there, many will figure "I can't get rid of them, we may as well be friends"). Business doesn't really have to be cutthroat, and by the time it becomes that way, you'll have already created something long-lasting.
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