Wednesday, March 10, 2010

Delusions of Grandeur

I was watching an online discussion yesterday where a bunch of very bright game store owners were trying to help a prospective new owner forecast initial sales. They came up with interesting fomulas for sales projections, such as dollars per person within a particular radius. I would have chimed in with something about turn rates (my own comforting mantra), but the discussion was already far along. Everyone had a different method and the bottom line was none were necessarily right. We don't know how to predict sales. It's what keeps rational people away from small business and what almost sunk my original business plan. I also rooted around online looking for The Formula, confident such a sales projection estimator existed. It turns out this is the big leap of faith. You can calculate expenses fair enough, but sales are fuzzy (I'm actually pretty good at it, with my expense projections way off).

This reminded me I should discuss the uniqueness of small businesses. It may not be apparent as I pontificate or elaborate about what I do, but my business is a unique representation of my community and our efforts as a company. Perhaps that's really obvious, but sometimes this reality gets lost in the weeds. What keeps small specialty stores like mine in business is their incredibly idiosyncratic nature. Everything about it is a direct response to the feedback of my community, the abilities of me and my staff, and the current economic climate. So everything I say about it should be considered little more than a curiosity. It's the part of our programming that's entertainment and not news. Not only can you not replicate what I'm doing, but I can't replicate what I'm doing. I couldn't do it across town in exactly the same way and I couldn't do it like this five years ago when I started or five years into the future. Maybe I've watched too much Doctor Who lately, but I see it as an anomaly of time and space.

It's not uncommon for store owners to listen to another owner and think, "This guy has no idea what he's talking about." In fact, he does know what he's talking about, it's his unique representation of time and space known as his store. In all other contexts, we're essentially frauds. On top of this, most store owners have no formal business training, so to some extent we develop our own retail language for explaining exactly what we do, which obfuscates the situation further. Part of my self-education in business has been to learn mainstream retail terms so I can express myself clearly and consistently. I'm still working on that. I spend a lot of time grasping at straws when I'm sure what I'm experiencing is not particularly unique and probably has a known solution, a magic formula. If I would just use factoring, for example, my cash balance would be appropriate to my needs*:


This uniqueness fits the nature of entrepreneurs just fine.We're an unusual lot with a variety of skill sets with the commonality that we don't want to work for other people. Some of us are actually incapable of working for others. It requires the kind of ego that's willing to accept risk that others would find unacceptable for the sake of their vision. You don't get that without a bit of arrogance and a belief that your way is the right way. A successful entrepreneur is like the Douglas Adams definition of flying, you have to throw yourself at the ground and miss. Success often happens despite ones best efforts to screw it up. Just understand how unique that is.

"Black Diamond Games 2.0: Much Bigger on the Inside."

* The reality is far easier: Don't spend more than you have. Make more money than you spend. Keep it simple (stupid).