I have one store. I've had one store for over seventeen years in various configurations. If you ever hear me giving advice about opening multiple stores, you may slap me square in the face. I know nothing about that. My first store was small, and I outgrew it in three years. Some would consider that store a mistake, but my needs for additional income grew when we adopted a child.
This was my 1.0 store, a test really. I don't think I passed the test. I don't believe I would have invested in a 2.0, if I had been on the outside. "Your business is bad Gary, and you should feel bad." I tell myself in my imagination. Over its three years, it never made a profit, although revenue grew and a stunted, potential community was definitely interested in what I would do next. I learned how to "store" and wanted more. I doubled down on a foolish endeavor when I opened store 2.0, using the last penny of my home equity before the entire housing market shuttered.
My 2.0 store was three and a half times larger. We included 1,000 square feet of game space, and we instantly grew revenues 45% in the first year. It wasn't enough. Store 2.0 was a struggle, as it was simply too big at 3,300 square feet. It took years to grow into that space, as we watched competitors fall by the wayside. Often I wished for a quick death. I would try something new, it would fail and lose some money, we would retrench and jump out later to try something else. It would fail and lose money. Smaller changes and improvements had small effects, that eventually added up to really good retail practices. Those big initiatives? They rarely worked. Eventually we grew into that spot, partly with the help of all my competitors leaving the field, some just temporarily.
In 2016, feeling both cocky and burned out on store 2.0, we launched store 3.0. We created a Kickstarter project, raised funds through private investors, and built a mezzanine with a complete store re-model. We now had 2,000 square feet of game space and we aimed to be a regional event center. That never quite worked out, but it was a Unique Value Proposition that loaded the store with roughly double the customers from before. It got peoples attention. Store 2.0 was good, but Store 3.0 was special. It was beautiful, comfortable, and purpose built. It was also stupid expensive and with a 15% bump in revenue, it was a kind of place holder to keep me interested in the field. We could pay back our loans, and there was profit, but there were also good and bad months. Our problem was the promise of ever larger Magic events never materialized, in the wake of a Magic slump. In fact, the Magic judge, right before construction, told me our proposed space was too small.
2021 saw the somewhat desperate launch of store 4.0, which featured double the store inventory. This doubling happened over time, sometimes unintentionally as we attempted to get ahead of the supply chain shortages. It was hoped that with COVID we might make up lost sales through additional offerings. That seemed to work! We had a 60% increase in sales from our dismal 2020, with its missing quarter. We also had a 20% increase from a very good 2019, before the crisis. This 4.0 feels fundamentally different than 3.0, as we have a depth of stock I've only dreamt of. I've chased breadth of stock my entire professional retailer life, but never imagined depth would pay off for us. I believe 4.0 is as far as we can go in this location. If you had asked me in 2019 how much stock I could add to the store, I would have told you, with industry pros agreeing, 50% more. We soared past that to 100%. I've got five more years in this location before I can consider a 5.0, but I would rather not.
So how do you know if you should open a second store or just a bigger one? I don't know. I have a competitor that has had something like nine stores while I've had my one in various incarnations. We're in the same area and have a completely different mind set. His new stores open, they close, he buys a store, it closes, he opens two more. It's like a confidence shell game. I have no idea how many stores he has right now. I have no idea his thought processes, but apparently a new store is low hanging fruit in his mind. He also wouldn't believe me when I told him my single store revenue. Impossible. We have different goals and objectives. I want perfection in one entity. I will never get it. I will try and fail. This is fun to me. An exasperated reader once asked, "Is this just a game to you?" Now you understand. It's the best game.
There are certainly low population areas of the country that can't support a giant store, or a rapidly growing one. I've seen roughly ten percent a year growth over 17 years. I have peers that blow by me and make me look like I'm wasting my life. I'm no genius, just stubborn. My "one" store did roughly four times the sales last year of my same store in year three, mature in its first location. We grow slowly. We improve processes. We create a company culture. We attract customers and dissuade others from coming. We try to innovate without losing what we have. The net result is growth, but not without troubles.
Slow, organic, seat of your pants growth is not for everyone. I was once told by a high powered business person they coveted my slow growth life of daily challenges. I was building a thing, while they managed people and processes in a rather abstract manner. Sure, they got paid a fortune, but my life looked fun. When I first started I had some difficult conversations with tech friends who couldn't quite understand brick and mortar. Why would you do that? Why would you limit yourself in this fashion at the dawn of a new world? Because it's slow. Because it's mine. Because I decide when it's time to upgrade to a new version.