## Friday, September 7, 2012

### More Numbers

• If the average game store does \$300,000 a year in sales, that's \$822 every day. We'll assume every day, although most are closed a handful of days. We're only closed Thanksgiving and Christmas. Think about the size of that daily sales number for a moment, as most people seem to greatly underestimate it, especially when we look at the average transaction number.
• A mall store might do a significant amount of these sales in the fourth quarter. A destination store, like ours, sees about a 25%-50% jump during the holidays and maybe a 10%-25% jump during the Summer months when school is out (our Summer period is July-September). A college town store might see that trend completely reversed.
• Of that \$822 a day in gross sales, 5-8% is net profit, or \$41-66/day, assuming there is any profit at all.
• Assuming the average sales, and a 55% cost of goods (including shrinkage, etc), and the three expense bucket approach, the average game store would pay \$3,750 in rent each month. I want to say the average game store is 1,500 square feet, with some more speculation. This would mean they would be paying \$2.50/square foot/month (how we calculate it on the West Coast), which is dead on in my neck of the woods.
• If the average "ticket," also known as transaction is \$25, a number that varies wildly but one I've seen and calculated for my own business at times, that works out to 33 customers every day.
• How many customers does the average store have?  Based on the numbers, average sales and average transaction amount, I want to say around 1,000. Something to remember when you call on the phone and say, "Hey, it's me! We talked about the thing."
• My highly diversified store has a baseline of around 15% sales per department (+/- 3-5% or so), so figure daily sales numbers of \$123 in miniature sales, \$123  in role playing sales, \$123 in board game sales, another \$123 in other CCG sales, probably \$123 in dice and paint, \$123 in puzzles and games, etc. This is really back of the napkin kind of stuff, but it shows both the enormity of the numbers and their insignificance at the same time.
• Net profit from the average game store, using these numbers, is \$15,000-\$24,000/year. Most store owners, therefore, must work in their store (what a business broker would describe as a "buy a job"). One key to many successful game store owners is a WWGJ: Wife With A Good Job.
• Game store salaries for full time managers are usually around \$25,000-\$35,000/year in addition to that profit. Some don't pay themselves at all besides their profit (I'm slightly overpaid, myself).  So you've got a guy making \$25,000/year managing \$25,000/month in income and expenses with a tiny, 5-8% margin of error. Madness, really.
• If you managed a store in another business, the median US salary for such work would be \$55,000/year, not including benefits (which few game stores can afford). You would think the skills would be naturally transferable. A game store owner, with so many other tasks on their plate, should be in high demand.  Hold on a moment, while I stop laughing. The game store owner salary maps pretty well to the assistant store manager instead.