A comment by a friend mentioned that while there is a lot of information out there on how not to run a successful game store, there really isn’t much information on how to do it right. I think there are a number of reasons why we don’t discuss the best practices.
Firstly, many of us don’t want to turn our blogs into business management blogs so we avoid discussing the nitty gritty how-to’s; secondly, since all businesses are unique to some extent, it’s the unique (read – headache inducing) problems that we see. Thirdly, there’s some hesitation of giving away information to competitors that might (unlikely but possibly) just put ourselves out of business. Lastly, it’s a bit of risk – after all, even if you do everything right, sometimes businesses just fail and we don’t want to be blamed for it!
All that said, we’ve decided to start a new series of best practices. Bear with me, I’m going to have to put into place a lot of things I do that I don’t necessarily think about.
With that said, let’s start at the beginning
1. Have a Vision
If you’ve worked in a large company before, you’re probably rolling your eyes. Vision Statements all too often are meaningless paragraphs of dribble that have no relation to anything. I’m not talking about that kind of vision.
I’m talking about a vision of the company for you. If you have partners, then it’s a shared vision; but it’s one about you. Not “the largest company in North America” or “eco-friendly, sustainable practices” or any of that other dribble.
Instead, lay out in detail what salary, work hours and vacation time the company must offer you. Put a dollar figure to it and a timeline. Don’t worry if it’s not realistic for a retail game store to provide this to you – that’s not the point just yet.
This amount will vary depending on your life circumstances (20-something, single and childless or mid-40’s, married with kids). You might even need to do 2 different sets of numbers – one for the first 5 years, one 10 years after that. Whatever number it is, put it together and make sure you are happy with it. Then make sure anyone affected by that decision is happy (read Significant Others & family).
There’s a few reasons for doing this:
1) Realism: Is what you want realistic? Look at the previous numbers I’ve provided where most retail stores pull in CAD$323,000 a year; and total salary & wages & profit equaled $61.5k. And that’s likely without a lot of benefits – and not forgetting you probably need at least 1 other employee if not 2.
On that note, you’re probably only pulling maybe $30-40,000 a year at most, after 4 to 5 years in business. Can you be happy with that? Can you & your family realistically live on that for the rest of your life. If not, you’re going to have to do a lot of thinking about whether you really want to do it – or what you can do to change these numbers.
2) Planning: You have a number, you have an idea of where you need to be. With that goal in mind, you can start planning the business backwards – plotting out how much sales you require per year to pull this off. Then you can work out the space requirements for the business (e.g. can you do it on 300 sq ft? how about 1,000? how about 2,000?).
I’m not suggesting you get 2,000 sq ft straight away, but if you know you will need to expand to reach your goals, you might hold-off on major improvements on your first retail location. It’ll also dictate the inventory / capital requirements using a turn ratio of 4.
3) Goal-Setting : Perhaps more importantly, you now have a goal. Whether it’s $30,000 or $100,00; you have a number that you need to hit and a time-frame to do it in. You and your partners (if any) have discussed and agreed to it, so that number won’t be moving without a serious discussion. If you don’t hit it, you’ll have to explain it – even if it’s only to yourself. You now have a goal-line.
If you think this is rather cold-hearted; it is. Yes, it’s a great life running a game store. You get games, you get your own business, you get to meet lots of people who are (often) just like you. It’s fun.
The business will also only last as long as you, the owner, can do it. It doesn’t matter if the business is making a profit – if you aren’t making enough to pay your bills, it won’t last. Most of us give up a career, a steady paycheck, benefits and a lot of free time to do this. Make sure it’s worth it for you.