Can one start the FLGS?

Seebs <usenet-nospam DeleteThis @seebs.net> wrote in
news:slrnft9ul4.b5o.usenet-nospam@guild.seebs.net:

> On 2008-03-10, Terry Austin <taustinca DeleteThis @gmail.com> wrote:
>> What happened to them all? I find that people how have
>> incorporated "many busuinesses" ususally have done so because
>> they kept failing. Otherwise, why would you need more than one?
>
> One or two were sold off, one or two failed. My last one
> failed, my current one's profitable.
>
> Most businesses fail.

Especially game stores.
>
>> It does suggest that, but you keep talking about how seriously
>> you're *not* planning on taking this. That suggests you have no
>> idea what you're getting in to.
>
> I think you miss a key distinction.
>
> I'm taking it very seriously. I'm just taking very seriously
> the fact that whoever runs it won't be me.
>
> I'm doing research on behalf of whoever might end up running
> this. I might be the one to provide an initial business plan,
> and -- if the plan looks good and everything checks out -- maybe
> even some starting capital.

If you're not looking to at least be an investor, you're wasting
your time.
>
>> And I'm giving you answers, based on nearly 30 years experience
>> _in retail management_. The first answer is, you need to get a
>> hell of a lot more serious about this than you seem to be.
>
> Once again, I'm serious about it, but my plan has absolutely
> been that I will *not* be the one running it.
>
> My plan of not being involved isn't because I think a retail
> store will magically run on its own; it's because I expect
> someone else to run it.

Nothing wrong with being a silent partner. Find someone with a lot
of experience at retail management for the other half.
>
>> Your biggest single expense will be the cost of goods. Plan to
>> pay 50-60% of the suggested retail for stuff (it varies by what
>> kinds of goods, I'm given to understand that 40% discounts are
>> fairly normal in gaming, 50% if you can deal direct with
>> publishers).
>
> Okay. That's good to know. I'd been guessing 30%, 40% helps.

At 30%, most retail operations literally could not stay in
business. (There are exceptions, but they are few and far between,
and for the most part, not actually retail in the traditional
sense. Mostly, they're mail order outfits that happen to have a
store front.)
>
>> Your second biggest expense will be payroll. Don't count on
>> people willing to work "for free" (which would probably be
>> illegal) or "for cheap" (because if they do it as a hobby, it
>> simply isn't important enough to treat as a job). And by
>> "payroll," I mean more than wages. You'll also have to pay for
>> worker's compensaion (which will cost you far more than you
>> will likely believe), taxes, unemployment insurance, social
>> security, fees to a payroll service (and trust me, you *don't*
>> want to try this without one), and so on. Note that I haven't
>> mentioned benefits, like medical insurance. For a minimum wage
>> employee, for the mandatory stuff, figure they will cost you
>> about twice their actual wage.
>
> Yes. The only "for-free" I had in mind was some consulting on
> accounting. The rest would be people working hourly, most
> likely.
>
>> Those two items will probably run you in the neighborhood of
>> 80%, or more, of your total revenue. Then, you have rent (and
>> unless where you live is *very* different than here, rent for
>> retail space *will* include a percentage of you total revenue
>> every month), utilities, your own taxes, etc.
>
> Interesting about the revenue -- I haven't seen that in any of
> the ads yet, but maybe that's fine print.

It's possible it's different in some places, but that's normal in
the big city, so to speak. Talk to a commercial real estate outfit
about it. Don't be afraid to negotiate.
>
>> As I have noted, your net profit will be less than 5%. You
>> can sort of fudge on that by being one of your own employees,
>> and thus your own living comes from that second biggest
>> expense, but you have to be very careful about that. Especially
>> since you're talking about getting it going and not being a
>> very active part of it. As an investor/silent partner, expect
>> to spend tens of thousands of dollars, and get a pitiful
>> return, if any at all. It would literally be cheaper to hire
>> someone to drive to the nearest big city and buy your game
>> stuff for you.
>
> Ahh, but I like my home town, and I like gaming, and if I can
> cause my home town to introduce hundreds of college kids to
> gaming every year, that'd be a good use of some resources.

It would also very likely be cheaper to simply set yourself up on
an auto-ship basis with some mail order house to get one of
everything published, and use the money you save to advertise your
new gaming club in the campus newspapers. In all seriousness, that
would probably accomplish the same things you seem to be after -
have everything published available, and promote gaming as a hobby.
>
>> In all seriousness, find someone with retail management
>> experience. *Real* management experience, as in, making hiring
>> and firing decisions, making buying and merchandising
>> decisions. You _must_ have someone who is intimately familiar
>> with the legal requirements of an employer, and a retail store,
>> or you're running naked in to a mine field. You can't afford to
>> hire an HR service to do this stuff for you. If you can find
>> someone with the experience to run it, give them partial
>> ownership, and be a silent partner. And stay out of their way.
>
> Fair enough.
>
> That's going to take some searching, but it may be possible.

If it's not, give up. Seriously. Don't waste you money backing
someone who isn't experienced enough to make it work.

> It
> may even be possible, if the market is worth it (and it may be;
> there's another 20k people ten miles away who have nowhere to go
> for gaming...), to simply interest someone in doing this and
> then stay COMPLETELY out of their way, except as a customer.

If they have the backing. However, as Seawasp noted, a successful
new retail store needs to have at least 2-3 years of operating
funds (assuming *zero* income) to be properly financed.
>
> The hard part is figuring out what the costs are. I did back of
> the envelope estimates on what it would cost, and concluded that
> it is obviously impossible that there are retail locations in
> this town, because there's no way any of them could be making
> money. Clearly, at least some of the costs must be much lower
> than I expect.
>
Start up costs won't be the big issue, I suspect. It will be
operating costs, especially labor. As a WAG, based on what I know a
hardware store costs to open, if you're talking about a small
retail space - a few hundred square feet, maybe - I'd guess you're
talking about low to mid tens of thousands to get the space, and
fill it up with stuff to sell. If you want to be open seven days a
week (and you really *need* weekends if you want the student
crowd), with reasonable hours, you're talking at least 10 hours a
day, so you need at least three or four full time employees. Even
at minimum wage (what the hell is minimum wage these days?
California's is higher than the national standard), they're going
to cost you $20-25k a year, so with a manager (who *will* make
more) you're talking $100k/year in labor. Shorter hours can save a
*lot* on that, and might be a good idea in the beginning, until
there's enough business to support more. It could probably be done
by being open late afternoons in to evening during the week, maybe
four or five hours, with one employee, and 12 hours on weekend days
with two. In theory, the manager could be the only employee during
the week, and as a part (or full) owner, his wages don't really
count.

The problem then, of course, would be finding someone willing to
finance a part-time business, but it can be done.

I'd start by talking to whoever handles retail space rentals in
your town, and finding out what rents would be. Then, talk to any
and all of the gaming distributors about opening stock orders to
get an idea of how much it will cost to fill the store. That should
give you an order of magnitude on how much you're talking about. At
a guess, I'd say double that as a *very* rough estimate on what
fixtures and counters and stuff will cost, and use that to decide
if it's worth further research.

--
Terry Austin

"There's no law west of the internet."
- Nick Stump

Jesus forgives sinners, not criminals.

"lordknightshade@gmail.com" <lordknightshade.RemoveThis@gmail.com> wrote in
news:b3b95df6-7117-445c-a7c0-72624ae23842@m44g2000hsc.googlegroups.
com:

> I can't say as to how you'd fare, each location and setup is
> different. The things I'm wondering are if gaming is ALL you'll
> be selling. In the area here north of Dallas every gaming shop
> is a combo store, selling comics mostly and then gaming as the
> backup merch. We also have some stores that sell a little bit
> of everything, comics, card games, popular video game titles,
> TTRPGs, a few wargame tables in the back, and a host of 6-8
> computers where they can charge for play-time and internet
> access. It seems that these combo stores are the only
> successful ones around here, due to their wider market appeal.

That's a matter for market research. My first step would be to find
out if there are any gaming clubs, or even informal groups, at the
local colleges, and host a tournament or something to get them to
talk to me about what would draw them in. RPGs only? All gaming?
Gaming a comics? Gaming, comics and strippers?
>
> As an aside, I can tell you that there is potential to grow your
> market your first year. Offer your employees store
> credit/discounts for the number of hours worked (to ensure they
> show up on time)

Best way to ensure they show up on time is to hire full time people
who rely on the job to pay their rent - preferably ones with retail
experience - and fire their asses if they don't.

> and approach some of the students at the
> colleges and if they don't already have gaming organizations on
> campus offer them a club discount if they get some friends
> together and start one.

And sponsor tournaments. It's amazing what people will do for
bragging rights and Cracker Jack prizes.
>
> If there are already clubs at the colleges that focus on gaming,
> offer it to them and send them your email advertisements and
> coupons so they can distribute it. Gamer word-of-mouth is the
> best advertising you can get, and having run two of these
> organizations in the past I can tell you they love the feeling
> of legitimacy they can tout for having these kinds of vendor
> relations.

Absolutely. You want a personal relationship with each and ever
member. (This is true for all retail. Greet every customer by name
when they walk in the door.)

> Keep in mind too that colleges usually have a time
> at the start of the fall semester where local groups and
> businesses can come on campus and setup small tents, you can
> work with any gaming clubs to co-promote at these (most of the
> time) and get some visibility.
>
> This helps build your market in college towns like nothing else.
>
> On another side note, does anyone have resources or links they
> can point me to (even testimonials or blogs) concerning the
> intricacies of running a gaming store. I'm interested in the
> business connections and SOPs that successful stores use, I plan
> to open a shop when I retire in the many years to come.
>
Good luck with that. It is, by and large, an industry run by
amateurs, and most of them are utterly inept.

--
Terry Austin

"There's no law west of the internet."
- Nick Stump

Jesus forgives sinners, not criminals.