Rolling for Initiative is a weekly column by Scott Thorne, PhD, owner of Castle Perilous Games & Books in Carbondale, Illinois and instructor in marketing at Southeast Missouri State University. This week, Thorne gives advice to people wanting to open a game store and comments on Target’s early release of the new edition of Pandemic.
….don't expect to get rich doing so. I know a lot of people who make a comfortable living doing this, and one or two who are comparatively rich, primarily due to having dealt in Magic: The Gathering for years. I also know a lot of people who spend almost every waking hour at the store, getting by but not greatly and who count it a luxury to have a part time worker come in a few hours a week. This is not a hugely profitable business.
Still want to do it? Okay…
-- Have a business plan. Seriously. Have written out what you are doing, where you are doing it, how you are funding it and what your plans are for the first six, 12, 24, and 36 months out. Your plan will probably change over time as your situation changes and that's okay. No plan of operations extends with any certainty beyond the first contact with the main hostile force said Helmuth von Moltke the Elder. More simply put, "No battle plan ever survives contact with the enemy" and your business plan will not survive contact with reality.
-- Have a source of funding. Game stores are notorious for short lived existences. Though not as common as in the past, we still have stores that open so the owner(s) can buy games at distribution pricing. Banks know this and are really chary about loaning money to fund a game store start-up. Banks generally (the whole Wall Street collapse notwithstanding) do not want to lose money. The best way not to lose money is not to put it at risk. It is a truism that banks want to loan money to those who don't need it. If you can show you already have another income stream or significant amounts of liquid capital, you will find it much easier to get a loan from a bank or other financial institution.
-- Have enough funds to keep the store open and on which to live as if the store did not generate a single penny of revenue for at least six months and better a year. Think of yourself as a startup. Startup operations always have huge cash burn rates. You shouldn't expect to even cover your expenses until you have kept the doors open six months. The store covers expenses and shows a profit from Day 1? Great!!! Put some of that money aside in a cash cushion to cover downturns in the business cycle, because they will happen.
-- This is a business, not a place for you and your friends to hang out talking Magic or fifteenth level dragonkin paladins. Whenever I go into a store and find the owner or manager sitting at a table playing Magic or behind the store computer immersed in World of Warcraft or Skryim, AND they fail to acknowledge me when I enter, I bet myself that store will be shuttered within 1-2 years, and unfortunately, I am almost always right.
BTW, I would be remiss if I failed to mention last week's release of Pandemic 2nd Edition by either Z-Man Games or their mass market distributor to the Target chain a week before the official release date, (according to Alliance Distribution's Website), of February 6th. Given that the game has been out of stock since the holidays, finding it on Target's shelves a week before the hobby gets it is annoying to say the least. I would certainly like to see some repercussions, but given that Target will sell more Pandemic in a week than I will in a year, I sincerely doubt it. However, the game store channel is the primary outlet for the rest of Z-Man's catalog and causing them to sell a hot product at more of a disadvantage than usual is not good for the long term channel relationship.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.