New Ways to Support Starlit Citadel Reviews

As long-time viewers of our video review series, Starlit Citadel Reviews, may recall, we’re constantly looking for ways to meet the demand for more video reviews while staying within a small business’ budget. For Season 2, this took the form of a IndieGoGo fundraiser that raised enough money to shoot an additional 7 videos on top of the 26 we funded ourselves. For Season 3, we decided not to run another full-fledged fundraiser, and are self-funding a 26 episode season.

For viewers who would like to support the production of extra episodes, we’ve set up a donation page. From there, you can make a donation of any size via Paypal to help with the production costs of Season 3. For every $500 in donations, we’ll produce an additional episode this year. You can keep track of current donation levels right on the donation page, and we’ll announce any extra episodes when they get funded. All funds raised go directly to production of Starlit Citadel Reviews.

If you’re a publisher or designer looking to have your own game reviewed, we’ve posted updated submission guidelines on our site. It’s worth noting that time from filming to release of one of our reviews ranges from 2-6 weeks, and that this should be considered if you need a game reviewed on a schedule. If you need a review completed outside of our regular schedule, or would like us to review something we don’t usually cover (in-progress Kickstarters, games not available for sale in Canada, etc), it is possible to purchase a sponsored review for the full episode cost of $500. A sponsored review looks just like one of our regular reviews, but is identified as “sponsored”, and can be released on an accelerated schedule. We’ll be just as honest in sponsored reviews as in our regular material, so games sent to us for review should still be well-designed and interesting. If you’re interested in having a sponsored review produced, you can contact Kaja Sadowski at ksadowski@starlitcitadel.com.

Thanks to all of our viewers for your support throughout the series. We’ve just released our 90th game review, and are very happy to be heading int a 3rd full season of videos. Happy gaming!

Mathematics of the Business

Sometimes, I wonder how many people spend the time to do the proper numbers for running a business in our industry.  I thought I’d put this out there since we seem to see quite a few individuals looking to do the low (low) cost route in Canada.  So, I thought I’d put up a little document for people to look over.  On the left is your typical B&M markup of 100%, on your right is the markup that a business like Cool Stuff Inc. in the South has – 30%.

I’m also using a very basic salary number here and winging a lot of the expenses – the 60% cost for salary is high but not uncommon among B&M stores.  I am also putting the packing numbers in there along with the inventory numbers, just to give an idea of the kind of workload difference you’d expect.  Obviously, it’s not viable to sell online at 100% margin but it does give a good comparison of the difference in workloads and inventory you’d have to see.  Turn rates of 6 are also really high, but I’m going to assume you are able to do so with such low prices.

The Numbers

 

Average Order Size $90
Gateway Processing Fee 2.80% $2.52
Shipping Revenue 15
Product Revenue $75
COGs (% Margin used) 100% $37.50 30% $57.69
Gross Profit $34.98 $14.79
% of expenses Salary equals 60%
Total Expenses No. of Orders required Revenue Minimum No. of Orders required Revenue Minimum
 $                        22,000.00  $        36,666.67              1,048  $   94,339.62                 2,480  $    223,158.55
 $                        40,000.00  $        66,666.67              1,906  $ 171,526.59                 4,508  $    405,742.82
Pack rate 5
No.  of Hours Packing Hours per Week No.  of Hours Packing Hours per Week
 $                        22,000.00                 209.64                4.03               495.91                   9.54
 $                        40,000.00                 381.17                7.33               901.65                 17.34
Inventory Requirements
Turn Rate 6
 $                        22,000.00  $        15,723.27  $      37,193.09
 $                        40,000.00  $        28,587.76  $      67,623.80

 

Bottomline

Is it viable? Of course it is.  Coolstuff is down in the USA – but they’ve got 10 times our population.  To make a decent living with the number of employees they have, they probably have a very large customer base and have to pack in more efficiencies (e.g. being able to lower their COGs, their gateway expenses and increase the packing rate).

However, using our current numbers which are somewhat inflated for a small business getting started. To make just $40,000 in salary (and breakeven everywhere else), you need to do $400k in revenue and spend nearly 17 hours just packing boxes.  You’ll also need at least $67,000 in inventory – in reality, I’d guess you need more like $80 – 90k.  That doesn’t include things like receiving, purchasing, updating the website, dealing with customer service, etc.  The cost of dealing with all that means you end up working very, very long hours.  It’s also why you might note that many of the online stores down in the States had really old websites – the margins were never there to update them.

As many FLGs owners say – the online game is a lot more work for a lot less money quite often.  If you win, you can win big like CSI but there are only a few winners, especially if you are going down the lowest cost route.

Accounting & Bookkeeping

Accounting and bookkeeping are two different subjects.  Accountancy defined:

Accounting, or accountancy, is the measurement, processing and communication of financial information about economic entities.[1][2] Accounting, which has been called the “language of business”,[3] measures the results of an organization’s economic activities and conveys this information to a variety of users including investors, creditors, management, and regulators.[4]

Now, bookkeeping on the other hand is the:

Bookkeeping, in business, is the recording of financial transactions, and is part of the process of accounting.[1] Transactions include purchases, sales, receipts and payments by an individual or organization.

 

Accounting for all that it seems dry is vital for a business to be run well – bookkeeping is what you need to do to get the data in the first place.   Once you enter the data, it’s figuring out how to make it work for you that makes a business work.

Management Accounting

Talk to an accountant and they differentiate between financial accounting and management accounting.  Financial accounting reports on what has happened, management accounting is based on figuring out how to use the data that you have to tell you how to run your business.

Over a decade ago, when I was doing my dissertation I decided to focus on the connection between the accountants and the marketers.  The results were appalling – at least for someone who ‘knew’ what should be done.  These days, things have gotten a lot better – with bigger companies.  Smaller companies though still struggle to get the data in the right place at the right time.  Unfortunately, the information is still just not there.

In the Business

So let’s talk about the kind of reporting you want / need.  At the most basic level, you have sales and the cost of goods sold and the inventory you carry.  Then you have your various expenses that you’d want to track.  Assuming you are all tracking the same information (in the same way), the first step is to benchmark your data as best you can – if your expenses are significantly out of line with your peers, you know what to tackle.

Sometimes, that just means making a few phone calls.  Your internet bill seem a little high compared to everyone else? Well, perhaps a little Google-fu and a few phone calls can get you a better deal.  It’s amazing the amount of leeway a lot of account representatives have to provide you a better deal, if you push them hard on it.

The other benchmark to track is your expenses against previous years.  Has something gone up or down compared to previous years? Don’t just look as a straight numerical value but as a % of your total expenses – sometimes, a change is just inflation; while other times it’s because it’s of new charges thrown in that you were not aware of.

After that you can start looking at fixed and variable costs.  Realistically, in the long-term everything’s variable (rent changes too, just in bunches of years rather than monthly) but it’s worth tackling your variable cost immediately.  Those are by definition things that are easy to alter – while fixed costs often require significantly larger expenditures of time and sometimes capital.  Breaking up expenses so that you can watch for changes in either is extremely important.

Now, let’s talk reporting.  Sure, you could get reporting at its highest level (and that is useful for a bird’s eye-view); but really you want to break things down a bit more.  You want to break up your sales to what makes sense for your business – sales categories would be things like RPGs, Board Games, Miniatures, CCGs, etc.  Same with Inventory and Cost of Goods Sold.  Once you have reporting by that level, you can judge how you are doing based off the margins and how much of each type of inventory you have.  You can figure out turn rates and revenue per square footage.  Without that information? You’re guessing.

What other reports do you need? Well, for retail:

  • Shrinkage (aka theft / weird ass disappeared items)
  • Shipping charges
  • Interest charges (oooh, these are important if you have loans)
  • Cashflow statements
  • Accounts payable / receivable (who you owe / what is owed to you – great for figuring out cashflow and what’s due!)

I’m sure there’s more that’s skipping my mind but this post is getting long.  Take a course in accounting, take a few.  Understand what the books are meant for and what you can do with them – and then ask yourself the question – what do I want to know? You make the numbers dance, but only if you know the tune.

 

Social Media – Musings

Social media is the new form of communication out there.  From Twitter to Instagram to Facebook and Google+, it’s all the rage.  It’s interesting to see how things are slowly shifting too, Google’s starting to look at forms of instant communication (Twitter, Facebook public statuses, etc.) and indexing it for specific on-trend topics.  More information, more relevant information – faster.

For an online business though, Starlit Citadel’s been pretty lax about taking part in this revolution.  Sure, we have a Twitter and FB account.  Heck, we even have a Google+ and Pinterest accounts.  We just don’t use them as much as we probably could….

Time Sinks

That is one of the problems with social media in that they are time sinks.  Assuming you want to do them well, that means actually doing that rather important ‘social’ bit.  In terms of Twitter or Facebook or Google+ which are full-on networks, it means finding and following interesting people and commenting on posts / getting involved in conversations.

Spread across 3 networks, figure 5 minutes each and say you check in twice a day – well, now you’ve lost at least 30 minutes.  If you actually get into conversations, you’ll have to check in more…

That’s not to say it’s a bad thing mind you, and it’s fun; but with everything else that you need to be doing as a business, it’s no wonder that bigger companies have dedicated social media staff.

Doing What You Can

So, what can you do? Well, for one – make good use of your time.  There are a number of automation tools out there that allow you to cross-post various pieces of information.  For example, our blog has an RSS feed.  We use Hootsuite to pick up the feed and push it to both Facebook, Twitter and Google+ every time we write a post.  This saves us the time of posting individually.

In addition, there’s IFTT  which allows you to create simple automated scripts.  I haven’t really used it much yet, but with a bit of exploration I’m sure I’ll be able to automate a few more of these tasks.  There’s a nice one for Instagram, but since we don’t use Instagram it’s a non-issue.

That’s the other tip – pick the one’s that you think will work for you best and use that, ignore the rest.  For us, it’s mostly Facebook and Twitter.  Pinterest we have set-up on the site and occasionally add our own pins and Google+ I bimble over to once in a while, but our best return is Facebook and Twitter.  So that’s where we focus.

 

Gaming in the Community: Saanich Neighbourhood Place

Every year, we make a number of donations to community organizations, libraries, and schools that integrate board games into their education programs. It’s a great opportunity to connect with the community, and to see how gaming can be used for more than just entertainment. Whether it’s an elementary school starting up a gaming library or a teacher getting their students to exercise lateral thinking and creativity with some well-timed games of Dixit, board games are becoming a great way of broadening children’s and youths’ education, and making learning more interactive and engaging.

We recently donated a number of board games to a unique program run by Jordan Czop at Saanich Neighbourhood Place in Victoria, BC that uses gaming as a way of building important skills for local teens. Below, Jordan talks about the program, and the impact that gaming has had on the community he works in.

Continue reading “Gaming in the Community: Saanich Neighbourhood Place”

Community & Co-Operation

It’s interesting watching B&M stores and online stores in this space. There’s definitely a difference in the way community & co-operation happens between / among each other and competition.

Brick & Mortar Stores

Brick and mortar stores, for the most part, are quite friendly to one another – especially if said competitor is in another city / state.  It does little harm to them if another competitor opens up in a city an hour away – most stores draw their clientelle from within 20 – 30 minutes drive.  So, you have things like GAMA happening, where talks on how best to run your store occurs.

Best practices in one store shared among others makes the entire industry stronger.  It’s kind of fun to watch and heartening to see – and it’s a lot less lonely than working out here on the fringes.

Online Stores

That’s what we are, online stores – fringe players in the market.  Not only based off size – most of us aren’t that big, being tiny little stores; but also because there’s no camaraderie among online stores for the most part.  The same way you rarely see competing stores in the same town sitting down sharing trade secrets, you don’t have online store owners talking to one another.  Unfortunately, the web makes all of us part of the same village – and that means we’re all competing against each other.

It’s definitely true for us Canadian stores, a little less true for Canadians to US stores (they ‘steal’ ‘our’ customers) and a lot less true for those based in other countries.  It’s not to say I don’t talk / discuss matters with other competitors (see this entire blog!) but there’s always things I’m going to hold back on.  There are areas that I just don’t discuss because I see it as being part of our ‘edge’.  While I don’t think there’s anything we do that a smart competitor could not figure out themselves, it’s not as if I want / need to be laying it out for them to read either 🙂

It does mean that it is kinda lonely though.  Sure, I could talk shop with other business people (and I do); but our trade is such a strange one that they sometimes don’t get it.

Across the Lines

What about B&M and Online stores? How do those interactions go? For the most part – they don’t.  Online stores are considered ‘the bad guys’ by a large number of B&M stores in our view.  We are quietly shoved to the side and generally excluded from a large number of conversations.  Other conversations, we just don’t care about – running Magic Tournaments aren’t a factor for us, nor will it ever be.  For most B&M stores, the difficulties of dealing with Canada Post, online customer service and shipping is just foreign to them.

The point of this post? I doubt I have one, beyond perhaps – if you’re going to launch an online store; be prepared for it to be much more lonely.