Archive for July, 2011

Finally.

We’re approaching a release date. Skirmisher Publishing is releasing my book on how to start and run a retail game store. I do not have a projected release date yet, but Skirmisher hopes to have hard copies by GenCon, so if you go, check out their booth. The Game Retailer’s Guide will be available in all of the usual places. If you feel that my column or services have helped you at all, I’d appreciate it if you’d run out and buy a copy as soon as it hits the shelves. Even if you read the monthly column, the book has a lot more in-depth discussion on things we discuss very broadly on rpg.net. I’ll get you more details as they arise, like a stock number and a link to an Amazon pre-order. And a price. A price would be good.

In A Cautionary Tale on RPG.net, I described the business of a person not named Brian. Here’s an update

Brian managed to hold on for a while, partially by making a Shaitan’s bargain with a company that makes high-interest loans to be repaid by automatic debit from credit card sales. By “high-interest”, I mean 50%, repaid within a year. Ouch.

Cash flow problems continue.  His loan gave him a reprieve, and then the exorbitant repayment terms worsened his situation. His personal finances are falling behind. His bills are months behind. His home of 13 years is in foreclosure. Services like deliveries and utilities at the stores are being cut off regularly, to be turned back on only when the service providers receive a payment.

Brian managed to not close any stores–yet. To his credit, he’s trying to find an exit that doesn’t leave any business partners or employees unpaid. He wants to sell.

Of course his cash flow has left his bargaining position in the basement. He’ll have to take virtually any offer he gets. He could end up selling his stores for 50% of the market price simply because he has no other option. He certainly isn’t seeing any substantial gain considering he’s invested 25 years and a million dollars or more into his company.

Beating on the dead isn’t why we’re here. The point is to identify potential trouble points and make sure you don’t find yourself in the same situation.

1. Personal risk. Brian had times when cash was good. He could have made sure his mortgage was paid before growing his company. As it is now, the only home his daughter remembers might be going to the bank. After 15 years, a moderately aggressive payment plan could have paid off a house.

2. Personal work. Brian resisted managing any of his stores. By removing a labor cost (and its attendant costs), improving performance metrics and drastically reducing loss in this high-risk store, Brian is now saving himself about $5,000 per month. Doing that 6 months earlier could have put $30,000 in his pocket. Running that store a year earlier could almost have fixed his current cash problems. Who can’t use an extra $60,000?

3. Paying attention. The high-risk store I mentioned in the previous point is one example. Brian was unaware of an employee stealing thousands of dollars because he’s not in the stores regularly, paying attention to daily paperwork and checking reports that his computer system automatically generates. Likewise, another employee who was well-known to have been stealing finally became so brazen that it couldn’t be ignored anymore. That employee cost him at least $50 per shift, 5 or 6 days a week. It would have only taken one visit while orders weren’t being rung up to identify–and solve–that problem.  Between improved performance and reduced loss, a few brief store visits could save tens of thousands of dollars. If you operate multiple stores, I recommend frequent, if brief, visits with a checklist of things to monitor. It doesn’t take more than 15 minutes.