Thursday, August 4
Local Store Closes: Business discussion
I just heard yesterday that a local store is going out of Business. It isn't my FLGS, but the community feels the pain none-the-less. Today I wanted to talk about "How should a store be run." And like the GW discussion, I don't want it to be a bunch of gamers with an axe to grind, I want to hear business ideas.
I don't know all the details of why this local store went under, but I do know that it has to do with cash flow. Essentially, they couldn't afford to purchase new inventory and thus their sales went down and they couldn't meet their debt obligations and had to close (Afaik). It is a sad loss, but it gives us an interesting opportunity for discussion.
Instead of talking about what this store may or may not have done wrong lets pretend you are the store owner and you have enough cash to make the decisions you need to (stocking, etc.) but that you don't have so much that you can be 'willy-nilly' (Yes, 'willy-nilly,' is a financial term).
One thing we gamers know is that nobody is becoming a millionaire off of running a gaming store. But there is profit to be made, how do we do it? Well, here are a few of my suggestions.
1. Hobbyists becoming store owners = Disaster!
By all means you should be involved in your business, you should love the products you sell, but you should be a business person first and a hobbyist second. What does this mean? This means that if I love 40k and own a store that is fine, but I shouldn't be ignorant to Magic products and board game products. I have seen too many store owners who have a ton of knowledge in one or two game systems but have no idea about other products they sell. In my world I deal with mostly stock investments, but if I have a client ask me about MLP's Im not going to tell them "I don't know about that, but Ill take your money," I am the professional and I should know about everything that is available to my clients (At least a working knowledge.) Long story short, as a store owner you should know your business. At any given time you should be able to know or know how to find where your financials are at. If it takes you longer that 10 min to get a good idea of where your financial matters are you are likely acting more like a hobbyist who owns a store than a business person who is a hobbyist.
2. Be creative!
A good friend of mine was a long time GW store manager and currently has taken an independent retailer from almost no miniatures sales to one of it's hottest products (second to RC). Why? He is creative! He does weird things that encourage people to buy things. For example he did a "battle box," tournament where battle boxes were 20% off and they had a building and painting day. The tourney ws weighted 80% to painting/converting and only 20% on battle points score (we know those battle boxes aren't balanced). If I was at his store I probably would have gotten a Dark elder battle box, that likely means I would be building a new army right now, which would be adding to that bottom line.
3. Info, info, info
Rule number one in retail is "location, location, location," the less known number 2 is "info info info." Examples of this in action are: gathering email info for email blasts, social networking and staying on top of the news in your industry. You need to be able to communicate to your customer base what is new and hot as well as any deals or events you have coming up. Wthout this you rely heavily on word of mouth. Don't get me wrong, word of mouth is excellent, but doing a little more will generally raise sales.
4. Be ye therefore organized.
Don't lose order forms, know who owes you what and who you owe. You know if your business is organized if it can be ran for a month. Without you there or on the phone.
I don't want to rant forever, I really want to know what you all think. How should a store be run?
Posted by Duke at 9:48 AM