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joshuaslater

Another FLGS closes.

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If you're in it to get Rich Quick, you can forget about it. But if you're in it because you love games, you might just pull it off.

I agree with you about if you're in it to get rich quick, forget it. But I've met quite a few people who are in it because they love games, and that appears to be their only reason. I don't think it's enough, though. You have to have some business sense, too. It really helps if you love games, but it's not a requirement, if you have the business acumen to do what's required to make a business successful, you can make it in the game business.

 

The people who have both have the advantage.

 

Entirely agreed. I have observed an epidemic of businesses related to Tabletop Miniatures, CCG's and RPG's who seem to make decisions by putting a posterboard with different options on a wall and then hiring a circus monkey to fling poo at it until something sticks. This is at every level -- not just the FLGS. It's also a long-standing tradition dating back to when Wizards of the Coast had to save TSR, probably to a bunch of other precursors as well who have since faded into obscurity.

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One of the things that should be mentioned is never ever just go in to buy an existing game store without going over their books very carefully. If you find that they have a lot of debt built up with distributors and you buy the business you are buying that debt too and are starting deep in the hole. Sometimes its better to let a store die and replace it with a new one rather than go in and try and save it.

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While I second the suggestion about going over the books very carefully, note that as part of the sale transaction of a business you don't necessarily have to assume the debt that its built up. You can make a condition of the sale that the previous owner(s) assume some or all of that debt. However, if you choose to go that route, and the prevous owner(s) are standup people who agree to it, you need to make sure that all of the vendors/creditors in question sign off on it, too, otherwise, you've wasted your time, because sure as crap, some creditor somewhere will wind up causing you issues over it.

 

It also can depend on how the business is set up, and the credit was issued by the vendor/creditor. Some creditors - particularly for small businesses - require the owner(s) to sign additional forms/contracts making them personally liable for the debts, even if the business is set up as an LLC, Incorporated, and other various types of business that are supposed to shield the owners from debt. If a previous owner has signed one of those, it's actually in their best interest to not rely on the new owner to pay off the existing debt, at least not without making sure the responsibility gets moved to them, too.

 

Buying failing businesses (of any kind) CAN be lucrative or just a good start to a business - it doesn't have to be a disaster waiting to happen. But you have to go in with a realistic plan that's based on as much of the data you can gather. And you have to be willing abandon the plan prior to the sale, if anything looks out of whack. FREX, some owners may just want out, and will sell the business to you for merely the amount of paying off the existing debt. If a store happens to have a decent lease, location and/or existing customer base and an inventory that's worth more wholesale than the debt you'll be paying off, it could be a better value than starting up from scratch in a new location with new inventory, etc. But not always...

 

Yeah, I had a whole unit in college on buying & selling failing businesses. ::):

 

Oh, and be wary of any sort of hidden books or tricks that hide income. FREX, a few years back, local chicken wing place asked that checks be made out to them personally, not the store. Turns out that they weren't reporting the checks as income, a fact that came out when some friends of mine went to buy the place - without the income from the checks, the store wasn't making enough to qualify for any sort of SBA assisted loan. Walk away from any deal where the owner says "Yeah, the books say it makes X amount, but I pocket Y amount like this every week, so you're really making Z." While X+Y=Z works in basic math, when it comes to business, base your income expectations and plans around what the books say, or X. Because you can't count on Y being true, which means you're in dangerous territory if you use Z.

 

 

The bottom line is - do your homework. Utilize the resources available out there. The Small Business Administration will help you every step of the way with all sorts of resources. A lot of cities, libraries, colleges and community colleges have departments with classes and inexpensive consulting for this kind of stuff. Cities in particular are often determined to help standard retail business establishments succeed, because most cities rely on sales & use taxes for a large portion of their income - the more you sell, the more they make.

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:down: I'm very sad to hear this news! Abington Games store always had an awesome atmosphere, and great, friendly people.

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Agreed with all your points. However, you failed to mention one of the most important things that gains you loyal customers. Good Customer Service.

This is something a lot of gamers-turned-store owners seem to not understand. Up until the last couple years, I bought virtually all my gaming supplies at my FLGS. The only exceptions were an occasional order from an overseas vendor or a small garage manufacturer whoes stuff was not available through normal distribution channels. I thought this was important becuase the local stores provided gaming space in the store for us, and that regular place to game helped keep the local gaming community together.

 

That pretty much ended when I moved to a small city that only supported one game store. The owner was generally lacadasical in keeping things stocked, and unreliable in placing special orders. At one point a group of us was trying to launch Flames of War (WWII 15mm historical game) in the area, and we put together a guaranteed order, just for us, of around $1000. Plus there was a lot of interest from other people and encouragment to begin regularly stocking the game and miniatures. It took months for him to finally place that initial order, and even when he did he messed it up (some of my order wound up out on the shelves and sold before I even knew it was there).

 

Despite the gaming facilities he provided for the local group, I found myself buying more and more stuff from on-line vendors, where I could get my stuff in days instead of weeks or even months. Now, after moving again, I live in a small city with no dedicated gaming shops. The only store that sells anything is a local Hobbytown. They have a limited selection of GW, a bit of FOW and a half dozen Reaper blisters, but they don't have the space for a whole group to regularly get togther and game, so the local gaming community is much less connected than other places I have lived. ::(:

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All of these experiences just make me very happy to be living in Denver, with multiple FLGSs, a solid gaming community and not one but two gaming conventions.

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I think gamestores as we know them will go the way of the Dodo. Those that are agile enough to compete with internet sales may stand a chance, but those are long odds.

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Then that will be a very sad day and a very bad day for gaming. I firmly believe that the good, well run stores will almost always find a way to survive.

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There's no reason that existing stores with sufficient business can't expand their operations to online. Start with local online orders with in store pickup and expand into national online sales... a number of brick and mortar stores have gone that route and it's succeeded.

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I'm with Heisler on this one. All evidence to the contrary aside, hobby gaming is a social undertaking. If it were not, then the advent of the 300 baud modem which allowed people to play computer adaptations of popular historical/military boardgame via a phone line would have spelled the end of hobby gaming, let alone things like Vassal or Magic Online.

 

For the mast majority of us, I think there is no real subsitute for having a real opponent and his real models across a real table. Many people now have good gaming tables and terrain in their own basements. Almost everybody in my de facto gaming club does. But that doesn't keep us from congregating at the FLGS for a good majority of the nights we get together to play.

 

A good retailer will find a way to make things work. If for no other reason than they can provide a nexus around which gaming can happen. Sure, it might mean instituting a "Play here? Pay here." policy as described in several threads recently. But my FLGS owner is expanding his offerings and has an increasing mail-order/online business for some of the more obscure stuff he is able to get.

 

Change is inevitable. Between the current economy and the increasing availability of hobby gaming supplies at cheapo prices online I am not at all surprised to hear of many game shops closing. There are far fewer local shops now than there were five years ago (I can think of five right off the top of my head that have closed since about 2004, and at least one more that is probably on the brink). But nothing will subsitute for the ability to browse a new rulebook before buying, or to rummage through racks of older minis and find the perfect match for a project you're working on. Not to mention how much more difficult it is to deal with an online retailer when something isn't right. Even the vaunted warstore (no offense intended here, neal & co are awesome) took more than a week to correct an error in one of my orders last spring. If something I order comes in incorrectly at the FLGS, chances are it will be fixed next day, two days at most, because of his ability to get most of what he carries from multiple sources (and it doesn't hurt that one of the distributors has a warehouse we can practically hit with a rock from the shop).

 

Bottom line: The FLGS is not going away, though the herd is definitely thinning.

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One other thing to add though is that a store that adds a mail order sideline still can't match the discounts that a pure online retailer can. He still has overhead and if he discounts it online he has to discount it the same amount in the store. Now the days of the standard 40% discount for retailers off the retail price have tightened up considerably. Lots of gaming companies are short discounting which means 30-35% off retail and then charging shipping to the retailer. I know those discounts sound huge, but that's how the store pays its bills, its employees and buys more product. It goes very, very quickly. So no brick and mortar store can come out of the gate and compete with the pure on-line retailers. They still have to pay the rent and try and provide you with gaming space which the online guy doesn't.

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The real thing that needs to be remembered is that running a gaming store isn't a 9 to 5 job that you can just walk away from at the end of the day. A 'day off' is a rare thing and is never completely free of doing store related things. This past week, my Monday off was spent doing eBay shipping in the afternoon before taking my Dad (visiting from out of town) to the beach for a bit. My Saturday off was spent with the laptop on a TV tray with a downloaded price guide, Turbolister, and a huge pile of cards that needed to be photographed and prepped for listing on Sunday morning. That's probably how I'll spend this evening, with the added fun of finishing last week's accounting too.

 

If I didn't have a business partner that managed most of the ordering, the Minions (volunteers), and great customers, I seriously doubt the store would be in such a good position. Other stores are closing their doors, but ours seem to be wedged open. :poke:

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No question that a store can't match most mail order discounts. Heck, I saw on Warseer a couple of days ago that a guy was offering 25% off from his webstore just for being a warseer member. No way can a brick and mortar shop match that. But chances are that the guy running a webstore out of his mom's basement won't have much of anything in the way of stock on-hand. Your order turnaround time will be at least the time it takes him to get it from his distribution source, plus the time it takes to ship from him to you. I know for a fact that most stuff being sent out as mail-order from my FLGS is either coming off the shelf or coming into the store same-day or next day from one of the distributors. Just about the only things he can't get next day turnaround on is direct-only stuff from GW (they only ship to him once a week), and maybe the stuff he gets from his Battlefront distributor (I think they're a couple of days away, shipping wise). Soon, he'll be doing Uncharted Seas, so the shipping for something coming overseas will need to be factored in for that line, but he's going to try to keep a fair amount of stuff in the store for quick turnover.

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Another thing not mentioned - how many of those game stores closing were actually open for more than 5 years? Remember that statistics show most small businesses close within 5 years of opening.

 

It's shame when most stores close, but the ones that are really significant are the ones that have been open 6, 7, 8 years or more under the same owner. Anything less than was statistically destined to close.

 

In my 11 years in CA I saw 3 or 4 Game Stores open and close in the county I lived in and in the 10 years since I moved back to the Denver area, I know more than one has come and gone around here, though I'm not sure of how many. Most of those came and went before I even knew they were around.

 

The only real significant closure that I know of we've had around here lately was the local Games Workshop store - and supposedly their reason for closing was the fact that the mall they were in jacked the rent way up (which is beleivable, as a whole rash of smaller stores in the same mall closed about the same time).

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Ahh, I remember planning to do online sales. Then the store got busy and my time dried up. Do I spend my time chasing sales discounted 30-40% or concentrating on my actual storefront (for sales at, or close to, MSRP)? More sales don't always mean more profit. I do sell online, but it's not a priority.

 

9 to 5 job, HA! My hours are just "suggestions", most days I'm open until 11 - and technically I close at 7 or 9. I had to implement a "no games started after 10" policy because people were taking advantage of my "don't kick customers out" policy and keeping me there until 1 AM. If someone shows up when I'm closed, I usually (unless I'm counting money) let them in anyway. Then when I close, I don't go home - I walk the dog and then come back to do paperwork, cleaning, stocking, ordering, et al. I still have customers who complain about me not being open on Mondays.

 

Whenever I hear tales of a store going under I cringe - whether by mismanagement, bad decisions, or just plain bad luck. I continue to believe that more stores are good for the industry as a whole. The Rochester "area" is not that big, but we support 6 LGS (even though we currently have 9) and 2 conventions (although it was 3). I think it's a self feeding loop creating gamers who support stores who create gamers...

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