Friday, July 29, 2011

Second Floor Rumors

If you follow Black Diamond Games on Facebook, you may recall me mentioning the possibility of building a second floor for a game center expansion. Well, not just mentioning, I believe I included a floor plan. Subtle, eh? When we re-negotiated the lease earlier this year, that was what I lead with: "We'll sign for another five years if you build us a second floor."

Our property manager, to their credit, didn't just say no, but went through the process of getting our request evaluated by their architect. Then they said no. Their costs were almost twice my estimate, so although this second floor plan won't happen anytime soon, I do think it's reasonable to do it in the future. Rather than a second floor, we did manage to negotiate a lower, fixed, lease rate. If that had been my initial intention, to lead with a boondoggle to gain lower rent, I could claim a certain level of financial genius, but I really did want that second floor.

The cost of a second floor, in landlord, full retail terms, not in "my brother knows a guy terms" is about the cost of opening a second store. However, unlike opening a second store, which implies a frighteningly high level of risk, the second floor has nothing but an up side (no pun intended). The rent on that second floor would be zero and we could expand into a ton more events. The truth about a second store is I only know how to open a store wrong. Sure, I learned a lot by making mistakes with my first store, but I don't really want to sort that out anytime soon.

When it's not the height of Summer, as it is now, our events generally only hit 80% capacity. We looked at that closely in the beginning of the year. I do believe we have some years to grow to hit full capacity. I'm also not swayed by various mini cons and other larger events. Those are great if you have the space, but very few stores do. Also remember that events exist to promote the retail space. The tail so to speak, should not be allowed to wag the dog, and honestly only about 10% of our customers ever use our Game Center.

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