Re: Can one start the FLGS?

On 2008-03-10, Terry Austin <taustinca@xxxxxxxxx> 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.

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.

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.

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.

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.

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.

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. 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.

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.

--
Copyright 2008, all wrongs reversed. Peter Seebach / usenet-nospam@xxxxxxxxx
http://www.seebs.net/log/ <-- lawsuits, religion, and funny pictures
http://en.wikipedia.org/wiki/Fair_Game_(Scientology) <-- get educated!
.

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