Friday, June 1, 2018

Prognosticating (Tradecraft)

In a previous incarnation, I was an IT manager in a failing technology company where the blame would shift on a weekly basis, resulting in layoffs. This week it was the marketing manager, last week it was the head of development. Eventually the founder and CEO ran out of people to fire and the board fired him.

In such an environment, with shifting loyalties, regular vocational executions, and no real consequences, morality tended to get a bit compromised. That's how I found myself rooting around on the HR directors laptop over the network. "Holy crap, she has the RIF list in an Excel spreadsheet called RIF List!"

I became known as the guy who "knew things." People would come to me and try to wheedle out whether they would be alright or not. Or in the case of the company attorney, he would visit talking about cars and I would advise him now is not the best time to buy that Mercedes. Eventually my name appeared on that list, which meant my days were numbered. By the time I was laid off, I had been searching for weeks and already had a job lined up. When it comes to the game trade, I don't have a magical list pilfered from a laptop, but I do predict trouble. I feel a disturbance in my cash flow.

As a potential new store owner, I would plot a trajectory. I would visit the next several distributor trade shows as well as GAMA. Is the industry doing better, worse, or about the same? Ask retailers at these shows what's exciting, if anything. If they aren't excited, that's a sign. Plot a game trade trajectory over your shows. The game trade is recession proof, assuming customers have jobs, but it has its own cycles you need to be aware of. The economy could crash during this research period. Doesn't matter, and in fact may help you with future lease negotiations. What's the trajectory of the game trade? That's what you want to discern.

Ask 50 store owners, are you doing better, worse or about the same? Some successful stores are stalling out and looking around for ways to diversify. Other stores are circling the drain and talking about changing their formats, moving to small locations or closing entirely. It's hard to tell, on the whole, whether we're seeing more stores or fewer. New stores, undercapitalized, under researched, are still popping up quicker than the old guard stores are closing.

While you do all this, raise more capital, perfect your business plan, figure out more details of your operation and what you really want out of all this. Take some community college classes to save money on skills you need. I recommend: Excel and spreadsheets, Quickbooks and accounting, small business management, website design, Photoshop and graphic design, and video editing. If you're handy, learn basic carpentry and home electrical. You'll need all of this. This is what I tell my 13 year old to learn, as he'll always have some extra cash if he knows how to do these things.

If you've got a solid business plan, a six figure investment and a ton fo research under your belt, there is nothing that can stop you really. Even if you start in a down environment, everything is up for you. However, if you have no plan, a shoestring start up budget, and you're relying on some optimistic numbers to get you through your first year, and YOU ALL ARE, you need to time it right. It's like the stock market. You want to get in while things are going up. You can't predict the bottom, so don't think you can jump in then. You certainly don't want to be going down, because you really don't know how far down it will go.

Right now I think we're heading into a down cycle, but don't trust me. I'm one of your fifty retailers. We're down about the same as last year, in a period when my business should be growing by double digits. I'm not looking for advice, thanks, I'm stating facts. If I am wrong, and I often am, you will have taken a year to raise money, educate yourself, acquire skills, and shake the hands of 50 game store retailers. You won't have the chance to to this again, so you win whether I'm right or not.

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