Common Entrepreneur Mistakes

Over the years, I’ve managed to make a bunch of common entrepreneur mistakes, and after reading a friend’s mistakes, it gave me the idea for this post. So, here’s my highlights:

Burnout

Burning yourself out from working too many hours is extremely easy.  There’s always something more to do, something new to get done or something that has to be completed otherwise it won’t get done.   Burnout is just way too easy. The really tricky thing is that different people have different levels of what would make them burn out.  I have a friend who has no issue with 80 hour work weeks, while many others end up burning out in 50 hours.  Worst, what you can handle throughout your life.  I used to be able to work 80 hours and not burn out, these days it’s down to 50 hours before I start having issues.

Being Pound Foolish

When we first moved downtown and I started taking over all the tasks including shipping, I decided that it’d make more sense to not pay the $15 a week to have Canada Post come pick up our packages but instead I walked the boxes to the Post Office which was 3 blocks away.  I ended up carrying 20lb / 30lb packages all the way to the office, sometimes taking a couple of trips a day. Penny pinching at its worst.

Being too nice

Sometimes, it’s just too easy to put others ahead of the business or your own needs. My most common mistake has been taking too long to let someone who just isn’t working out go in this case, but it crops up in other areas too. When you are running a business, being too nice often impacts the bottomline -and when you own the business, that means it impacts your own income.

Taking on too many projects

Slightly different than burning out, but part f being an entrepreneur is being a bit of an adventurous soul. You always want to try something new, and all too often you end up taking on a new project. And then another one. And then another.  Sometimes without finishing the one’s you first started. It’s too easy to end-up with a ton of failed projects with all your time split between them all and none ever actually finishing.

 

 

Sucking the cashcow dry

Mayfair Games has updated the Settlers of Catan game with a new, 5th edition  Guess what they changed? A few graphics and a difference facing on the box.  What else did they do – they increased the base price to US$50.  Why? Because they’ve got a hit game and can reap in all the money they want / can and as they move towards a mass market, their regular competition of Monopoly and Risk provide recycled games with lousy components too at a high price. Why wouldn’t they do this?

On the other hand, you get more puzzling examples of this in the industry all the time. Take the entire Tash-Kalar debacle. When first released in North America, it was priced so high even the developer spoke out against it.  Now that it’s been re-released, it’s significantly cheaper – but the initial buzz has faded away and sales are much slower.  What could have been a good, on-going game when first released has become just another has-been game.

Cards Against Humanity is another prime example.  They’ve refused to sell to most retail stores forever and last year, promised to start a retailer program.  As far as I know, only a select few stores have been allowed in on the retailer program, leaving the vast majority of retailers in the cold.  What are they up to? Same thing – sucking the cash cow dry.

That’s not to say it’s just publishers who do this. Let’s be clear on this – most brick & mortar retailers these days are expanding and running Magic the Gathering games like crazy, desperate to get as much money as they can from the blockbuster sales the game has been doing.

If you look at these example, the big difference between all of these is control.  Mayfair Games controls Settlers of Catan and can update and sell the game at any price that they want, for as long as they want.  Same with CAH.  However, with Tash-Kalar; the designer pulled the IP away and made a new version since he had the control (eventually) while with Magic, retailers don’t control the product or the distribution, just the price. So you see a price war driving prices down.

The Social Media Puzzle

Over the last few months, we’ve been trying to work on our various social media profiles. Part of that includes reading what works best in each area and, further, what kind of content works on each area and trying to move beyond the basic posts that we have set-up. However, the fact is that outside of this blog, we really haven’t had much luck with developing a strong social media presence.

A lot of that has to do with the fact that I’m an introvert by nature, and as the main marketer, it makes building a social media presence really difficult. After all, technically, you’re supposed to interact with people online, talk to them and generally develop a brand image that is authentic.

At the same time, the other issue is the variety of social media platforms out there that it can be hard to decide what to focus on. Twitter is great for chatting with people and quick discussions, but it is known to convert horribly. Facebook is a decent angle, but the problem is generating good content for Facebook eludes me. We tried doing a giveaway and while it generated a lot of interest, but iffy on the returns and Pinterest doesn’t seem to host a large number of our customers. I might be wrong of course, but we certainly haven’t seen much interest in Pinterest for our products.

On the other hand, tapping and dealing with social media is likely to be our major source of return; so it’s something we need to figure out. Now, if only we could…

Top 10 Bestsellers of May 2015

1 Dead of Winter: A Crossroads Game
2 Mysterium (Tajemnicze Domostwo Polish Version)
3 King of Tokyo
4 Star Wars: Armada – Gladiator-class Star Destroyer Expansion Pack
5 Star Wars: Armada Core Set
6 Sushi Go!
7 Specter Ops
8 Star Wars: Armada – Assault Frigate Mark II Expansion Pack
9 Imperial Settlers
10 Sherlock Holmes: Consulting Detective

An old-timer perspective

I wonder how those who have been in this industry for 20 / 30 years feel sometimes? I know in the last 8 years, the changes that we’ve seen have been immense ourselves.  More direct competition from retailers, more direct competition from publishers and distributors.

We’ve started seeing more and more publishers selling direct – whether on Kickstarter or via Amazon or their own online stores.  It’s pretty much a given that if a game goes through Kickstarter, it is not going to do that well for us.  Sure, we might sell a copy or two if we’re lucky but the vast majority of products that come through Kickstarter are dead-on-arrival.  (As an aside, the various Kickstarter publishers who spam us about their product and supporting their Kickstarter – you’re just annoying me).  Publishers who are on Kickstarter and seriously discount their product are just another competitor, sometimes the worst kind because where a retailer has a ‘floor’ in terms of the product cost (generally about 50% of the product price), a publisher’s floor is often significantly lower (about 80% of product price).  That means they can (and in some cases, have) sold product below the cost that we can acquire the game at.  No surprise that publishers who do that  are added to a list of publisher products that we will stock significantly less of.

Anyway, it’s just interesting to see how the industry has both grown significantly and how many new players have come on-board and how many have left.  New retailers pop-up every few months now it seems all across Canada, jumping on the giant cash bandwagon that they envision the industry is.  And there’s no doubt that the industry has grown. At the same time, other; older retailers have dropped out of contention – whether because they’ve never been able to make money (and have been eating losses for a while) or just that their margins have become so tight, it’s time to move on.

In addition, new formats for gaming have sprung up – gaming cafes and gaming bars are everywhere it seems. There’s no guarantee these guys will last, but a few seem to have become breakout successes like Mox Boarding House or Snakes & Lattes or the Stormcrow in Vancouver.

On top of that, we’ve now grown to a point where Youtube reviewers who are paid to do reviews are viable.  There’s our very own sponsored reviews of course, but there’s also others like Shut Up & Sit Down or Rahdo or the Dice Tower.  The options keep on increasing, and the quality and options seem to be expanding at a very decent rate.

Lastly, talking about communication – we’ve got even more avenues for getting information than ever.  There are a slew of gaming sites and reviews, though BGG continues to be the main website.

All these changes and more, all in 8 years. I wonder how others feel about it?

Summer Slowdown – Fixed & Variable Expenses

General, the Summer is our slowest period.  We see the lowest number of sales during the months of May to August (excluding a few cons that we do); but overall it’s slow.  This means we don’t have a lot of orders to ship out and even less revenue, so we have to reduce expenses. Now, I’ve discussed expenses with regard to hard and soft costs (fixed & variable expenses); and how it’s easy to adjust variable expenses, but let’s talk about what we can / do adjust.

By itself, Cost of Goods sold and distributor / shipping expenses will adjust themselves. We don’t have as much shipping expenses when we don’t have to ship as much and of course,the COGs drop too.  Overall, the directly related cost in managing individual orders have dropped.

The other major variable cost is our staffing cost. All the staff these days are on hourly wages, so theoretically it’s easy to cut their hours to match the amount of work / orders going on.  However, there’s a social cost to this that extends beyond pure the accounting side of the business.  There’s a tacit understanding when you hire someone that you’ll be providing them a specific amount of work, work which they then count on to pay their bills.  Sure, there’s some flexibility in detailing the fact that yes, they are part-time workers; but if you want them to work for you long-term; you can’t just cut hours at short notice to the bone.

There’s also the problem of rustiness – while we have a small business, it’s relatively complex in the sheer volume of things that need to be done.  None of the jobs are that difficult, but remembering all the different tasks especially if you don’t do it regularly can lead to rustiness / forgetfulness.  You then have to pay for people to not be good at their job while they relearn the tasks.

That’s part of the reason why, even if revenue is down, while we do reduce hours; we don’t cut it to the bone and end up with a lot of ‘extra’ hours for our staff.  This makes summer a great time for projects like stock counting, product weighing and reorganising our shelving and figuring out new processes.  It is make-work in some ways, but it is necessary make work.

Not to say I wouldn’t mind saving a bit of money and not stressing about finances during this period…