- The Business Plan. I slaved over my business plan for months. I wrote it in a week while in training at Kaiser in Wisconsin (thanks Kaiser), and then spent many more weeks making the numbers add up. I had help in this, but the elusive part was planning to make money. It seemed impossible. I could come up with the expenses, but what about the income? Occasionally, someone will email me now and ask how they should come up with their income numbers, and I just have to laugh to myself because I did the same thing. The income numbers come from your posterior. Then why would anyone invest in a business? Yeah, I know, right? Mostly because the guy with the plan has done it before. I was the new guy with the plan and I'm very thankful for my investors who had faith I could figure it out.
- Education. I was a sponge for information, with just a small trade show under my belt and having read a half dozen retailing books. I had never worked retail. I trolled the Game Industry Network forum daily and asked lots of questions. How much change should go in the change drawer? How do I display Magic cards? Then I made an effort to help others with whatever I knew to take the burden off the veterans. I learned Open to Buy, the key to much of my success, from Jim Crocker, how to sell used games from Marcus King, how to manage expenses from Dave Wallace, and anything else the established game trade could teach me. I gave them the benefit of the doubt. Some of what I learned didn't work, but it formed the baseline for that discovery.
- The hours were grueling. I worked the store alone from when I got there at 9:30 am until I closed at 7 pm. I did this every day by myself except Thanksgiving, Christmas and a New Years weekend. I recall my body physically changing for the better from my previous cubicle work. I recall being exhausted most of the time, a condition I now recognize as counter productive. Working long hours was a badge of honor for me, but it was also a little stupid in some ways. After a year I took Sundays off and after three years I took weekends off. If you want to open a retail store, start with a gym membership.
- Sales were, as expected, low, but I had a plan, a lot of faith, and enough start up capital to weather it (keyword HELOC). Competitors would visit me and crow about my impending doom. Vulture customers would inform me I needed to discount to compete with the Internet. Tards all of them. My first day in business I did $17.17 in sales (I never had a zero day). My daily average for the first quarter was $299/day (break even was $650, but at least I knew that). My best December day wouldn't even break even in the new store.
- Saying Goodbye. I visited my friends and family beforehand and said a kind of prison goodbye. I'm off for a few years and probably won't be seeing much of you. I'm doing hard time in small business. I have some serious regrets about this. We adopted my son that first year and when I wasn't at the store, I was at home with him as much as possible. My wife ended up in cancer treatment later on, and I'm still chided for not being around as much as I should have been. There are no personal days in small business.
- Hard Work was not only the norm, but relished. The vacuuming, cleaning, shelving, and receiving of tons of new stuff all the time was done with a smile. At the same time, as I've mentioned before, there was a "gentleman farmer" quality to it. As long as you can pay your bills, who cares what you do when your house is appreciating $10,000/month. I wasn't a true retailer until the money ran out and the recession hit. The recession will likely turn out to be the best thing that ever happened to me in business.
- Community. There was no community and no game space. Then again, neither was there much of a community in the area beforehand. This was a key opportunity I had missed before I opened but began to slowly grasp. Understanding I needed game space for community was the lesson in that first store. I could survive fine without the added sales from game space, but there was a disconnect with my customers by not having it. Eventually we made a small amount of space for that community and vowed never to be without it again. Another observation: stores that start without game space have a higher level of retailer discipline when they finally get game space. Game space has a casino quality to it that focuses your attention on just those games.
- Listening. Part of being inexperienced was being open to new ideas, including what to carry. I learned the hard way about who to listen to, but I generally tried many things and kept what worked and dumped what didn't. I recall visiting with a competitor and asking them if they had any problems with how I did things. The key problem? Wholesale dumping of product lines that weren't working. I learned to soften that up and offer things to other retailers before flooding the local market. When we opened, I had every book from every RPG anyone anywhere was playing. There were probably 100 different systems. I had every major non-GW miniature game (GW, I had learned, was bad), about 150 board and card games that I knew virtually nothing about, and 35 CCGs. I took the shotgun approach, rather than slowly ramping up.
- Learning Games. I recall during my first Christmas being berated by a customer for not knowing my board games and vowing to fix that problem. We started doing a board game night after hours and I learned about 100 games in the subsequent years.We went from around 150 board and card games to 1000 now.
- OPM. A big psychological barrier was the concept of ownership. After spending my adult life working for others, it was difficult to grasp that it was my money we were spending. I was very good at spending other people's money, very good at predicting expenses, but I had not concept of saving, optimizing or making money. When it finally dawned on me it was my money in a deep, visceral way, I became a convert of sorts. I scowled at those with their hand in my pocket, at expenses I had to pay, and shrinking margins.
Thursday, August 18, 2011
First Six Months
One of the guys who works at the store is taking a small business management class and asked me what my first six months were like. Here are some highlights: