My turn to be tired of being the labor... help me get my business off the ground

As someone who's currently not 100% happy working for the man either, I can only encourage you to set out on your own.

I think the two big questions are:

a) do you know where you can find your local clientele (maybe FB, Instagram, local meetups whatever) so you can get the message regarding your store out to them?

b) Can you find shop space that is both convenient enough and cheap enough to make sense to rent, and hopefully make enough money to eventually buy it? In my book, being in a position to own your business' location is fairly important. Commercial leases seem to be rather, well, landlord friendly and another friend of mine is just going through a business shutdown because his commercial landlord decided that they rather not have anything automotive amongst their renters. I was talking to a couple of other friends of mine who own and run a high-end tire shop, and they ended up buying the building they are in pretty quickly after having a bunch of commercial lease "experiences" with previous businesses.

Based on your last comment, do you intend to do this long term, or to tide over for the next few years while you work on your master's?

In reply to Javelin :

Based on what you say, I dont see that you can goo too wrong, so go for it. 

What I am missing is why someone with your background is busting tires for a buck? That is brutal work if in a high volume shop and it seldom leads anywhere. Are you sure you just don't need a job change for the duration of your masters degree?

Pete

Financial plan for the next two to five years. Account for everything down to the toilet paper needed for the business.  I have found that the big expenses are easy to track.  The small expenses add up fast and can be as much as 20-30 percent of your budget.  This can easily be what makes a business profitable or not. 

Here's a mind dump. Take it for what it's worth. 

I managed a hobby shop for 10 years. The main thing I took away from that is retail sucks. 15 years ago mail order was decimating that business and now online is even worse. I got out of it and not long after the shop I ran closed. You main income is probably not going to be selling gaming products. I'd concentrate on the food and beverage. I'd bet gamers love expensive beers. I even consider trying to work out a deal with the Starbucks to serve coffee to your customers. Maybe they sell to you at a discount and you sell to your customers at retail?

Serving food and beverages is going to get your local department of health involved. They are going to have some pretty strict requirement in the kitchen and food areas. The regulations can be onerous. Like 200 gallon water heaters, mop plans, counter requirements, and so on. All doable, just a pain. The good news is most of that kitchen equipment can be leased. That keeps the up front cash outlay down incase things don't work out. This may be different in your state. Make some phone calls. Find out who regulates restaurants and get the requirements from them. 

Employees can suck. Not just from dealing with them personally, but from all the regulations you have to deal with. They are also going to be your biggest expense and biggest headache.  They can also be your biggest asset or biggest liability. You won't know until you hire them.

Don't hire friends, girlfriends, or family unless you can keep your business and personal life separate 100%. Seriously. My eldest works for me. Home stays at home, business stays at business. If you can't do that, don't hire them. 

Hire an accountant. The government regulations for sales tax, income tax, employee tax, property tax, and the amount of paperwork to file at the appropriate time with the appropriate agency is ridiculous. I dump all of that on my accountant. I send her the Quickbooks reports at the end of the month and let her handle it. It is worth every penny it costs. 

Set up a LLC. You can still run your taxes as a sole proprietorship, but it will offer you some protection from liability in the event that things go sideways. I set mine up through Legal Zoom. Fairly quick and easy. A local lawyer can also help you out with that. 

Get a good liability insurance policy. With employees you will also need workers comp insurance. So, find a insurance agency. Don't be afraid to shop them on price regularly. I do every year or so. 

As a business owner, I can say running a business can be super rewarding and not just from a monetary standpoint. It can also suck mightily. You probably won't work fewer hours, you probably won't have less stress, especially in the first year or so. From the bottom of the company it looks like the bosses don't do anything. Just boss people around and roll in money. What you don't see is the hours spent laying in bed trying to figure out how to make sure you can stay in business. Or how that $10k insurance bill is going to affect your cash flow since you also need to order $40k worth of product you just sold. And you won't see any profit, much less get that $40k back, for 30-60 days. Not to mention you need to keep things running because there are 5 families that won't eat if you can't make payroll next week. I

After saying all of that, I wouldn't trade it for the world. Just being in control of your own destiny is worth the price of admission.

Be the best at it you can be and everything else will fall into place. 

That's all I got right now. Good luck. I'll send some good vibes your way. 

So, you're looking for a larger than normal space for this type of business, and you're going for a more upscale atmosphere. All that says to me, is that you'll need even more startup capital than a normal gaming shop. And you're likely to have higher running costs due to the larger space (and potentially higher end location). Both of those mean you have to do a lot more business than a normal gaming shop in order to be profitable.

If this is going to just be something to do for a couple of years, are you going to make enough to offset the initial investment?

If I were in your shoes, with such a short timeline I think I'd consider buying real estate with your startup capital and then renting it out for cash flow. It's probably less likely to fail, and it's probably going to require less of your time too which would allow you to focus on your studies. If the rental(s) don't work out, you should be able to get some of your startup money back by selling. If the gaming shop fails, you lose it all. The revenue stream provided by real estate should be fairly predictable and could be a nice supplement to your income going forward for as long as you want it. YMMV and all of that.

I was noodling about something similar some years ago.  I was thinking slot cars or gaming shop for my business, but my thought was to acquire the building necessary AFTER having arranged with the local Comic Book/T-shirt/Geek shops to share location (along with a kiosk food/drink vendor).  The thought was that if there was a ground zero for each sub-interest then put as many of them as feasible under one roof so their clientele would have a central destination and perhaps you could get some cross-pollination in the customer base.  I think your interest in an Ebay shop is very important, especially if you can arrange to carry some products that are otherwise not available in the rest of the country.  

Javelin,

I love that you are really thinking about this stuff and trying to analyze it. My family had a string of successful businesses in the same geographical area (and some others). Good for you. 

You need to own your real estate, not lease. Think of the businesses as a way to pay for the real estate. In the end the real estate ends up being the biggest portion of your net worth gains. If you do well in a leased space someone just jacks up the lease on you.

After dealing with owning bars and restaurants I am not sure having beer on tap will be worth the pain of age restrictions, having to serve food, etc.  

Jcamper

Here's a whole different piece of advice...  Focus on the Counseling.  

There is a current big trend in Dental and that is franchised dental offices.  Examples are Aspen Dental, Corner Dental, etc.  These franchises are not owned by dentists.  They are owned by people with business backgrounds who then employ dentists.  The theory is dentist are not good business people and good business people are not dentists.    

Another example is hair salons and barber shops.  One hair cutter owns the place (or maybe the owner does not even cut hair) and rents individual space (booth rental) or just hires hair cutters.

Or, one "mechanic" owns the auto repair shop but has many "mechanics"

How do we expand this idea to Counseling???

You will be a rare bread of being both a "feelings person" as well as business and accounting background.    Here is the general idea:  Gather up some people who are farther ahead than you are and are just about to enter the market of hanging out their own shingle for a counseling business.  You start a place like "The Kelso Center for Counseling" or a name of your choosing.  I envision 4 counselors in this office.  YOU OWN THE BUSINESS and have them either renting from you  or you hire them or some sort of revenue share where you take a cut.  What you are giving for this cut is that you will handle "the business" of being a counseling office.  I imagine there is huge amounts of insurance paperwork and claim work that you (and your staff) could relive the "feelings people" from so they can be better at "feelings."  

This is a real millions dollar business that you could start now.  Your customers are the counselors, not the public masses.  

Fancy strip mall means a extremely high per square foot lease rate AND a triple net lease.  That means ALL the run costs of the strip mall are shouldered by you and the other tenants.  Property owners property tax goes up?  You end up paying more, same for utilities, upkeep, etc, etc.

While the traffic of a strip mall next to Starbucks is attractive, I wouldn't go there without a TON of liquid capital, as you'll burn through it quickly. 

Also, you won't make anything without a liquor license, which can be extremely difficult to get based on your town, where you plan on putting the business etc.  Check to see if they'll even give you one for a gaming business that attracts minors

Kelso has about 12000 people from what i see. The first thing to really think about is if there is a  market, is there anyone else doing anything similiar in your city? I also agree that the leased storefront beside starbucks could be spendy and may not be the greatest option/ Really.....the kind of business you are running isnt gonna get a load of walk by customers, i would imagine that if people really wanted to see your store, they would find you. Then you could have less rent to have to worry about.

As someone who has run his own business for years i can tell you this, you want a niche no one local does but you. I know jackdiddly about hobby stores except that ive shopped in a few.....and never just walked into one cause i saw it while walking by

Scrap it all and go into something dog and cat related. People spend a ton on their pets.   I just flew back from Boston and was surprised at how many people were flying with dogs.  

A large pet store was is under construction by me and the weather tech guy is pushing all those safe pet bowls right now.  Big area of growth.   

 If having food is too many hoops to jump though, a good selection of well stocked vending machines (that you own) might be a loop hole to explore.

 I like the craft beer beer idea (if you can pull it off). Find a couple of cute cosplay girls for waitstaff in the weekends.

You're also going to want a couple of 3d printers,  a vinyl cutter,  and some screen printing equipment.  I'd plan on selling supplies for them too because while you won't be able to compete with online for the price of full roles of filiment or vinyl, the online pricing for partial roles is something you could compete with and beat by being local on a Saturday.  The printers would let you print your own figurines and keep that $ in house, and painting parties for those figures cost you almost nothing but might be a thing. The cutter and screen printing equipment let you finance your promotional materials at cost, and it you are doing tournaments and such a promotional and/or team tshirt can be a value adder for the participants and a profit adder for you. Corporate events in particular having stickers or Ts is just $ in your pocket. Think team up with the mall theater too for release party and ticket combos and after midnight special screenings. 

The other under supported nerd niche is the role play/costume crowd.  Think vendors at the Renaissance Festival or LARP crowd.  If you have enough floor space a corner set aside and some conversations at the Renn Faire might get you a supplier or suppliers for unique stuff not normally available in a walk in retail and consignments on online sales and shipping. If you can get a costume maker to show up periodically and take measurements and do fittings and alterations you would have something unique and worth traveling for. 

There's a tech nerd direction too, drones and RC cars and such. After hours in a mall might offer up opportunities for racing that aren't available anywhere else.  I'd ask the question when you scout places too, if the owner is fine with drone racing in the mall hallways after 10pm then you can offer something no one else can. 

The only successful gaming and comic shops in my neck of the woods exist because they're owned by same person who owns the block they're on and gets rent on all the other businesses to cover any losses. The owners are huge gaming and comic enthusiasts so use the other revune streams to support their passion. 

I'm in the "find a different part-time gig and focus on your degree."

I'd probably spend the extra time you will soon have adding more education, maybe extra certificates for your counseling? I don't know how that works. 

But trying to start a business while finishing up your degree seems like you'll either:

1. Not spend enough time on the business, it will fail, you'll be unhappy.

2. Not spend enough time on school, setting back your timeline, you'll be unhappy. 

On location, Malls that are failing aren't going to be saved by a gaming store. That means you're on a limited timeline before you either fail or move. 

I know a couple of folks who run stores similar to this. One is semi-retired on his wife's life insurance settlement (she passed away). I don't think he makes much money, but his rent is CHEAP in a building in a small town square. Another guy has one that is more of a vintage video game store. He is in a large college town, right downtown near the bars. He's doing much better, because you have people who are interested, with free time, and either Mom and Dads money or student loan money. 

Javelin said:

I have a Bachelor's in Business from Washington State University with a Minor in Accounting. I ran a successful online Sole Proprietorship for 3+ years that got to where I needed to fish or cut bait and sold it to a guy in Connecticut who ran it for awhile. I am currently retired from the military (so I have enough income to pay the mortgage and have health care) and going to school online full time for my Master's in Counseling (because having my own private practice where I charge $$$/hr to insurance companies as a LMHC is the real goal but I have 2 years left). I work 25 hours/week at the tire shop and it's just making me realize how much I hate working hard so somebody else can reap the rewards. I am also going through a divorce and am about to have a lot of free time on my hands, especially in the evenings. I am not afraid of the work or commitment it takes to run the business, and yes I am just looking for a hobby/lifestyle business to sustain just me. I do not need investing as I have a cash nest egg to use for start-up.

Thank you all for the sound advice, I am researching my answers and will get back to you!

 

I was going to write up a long look ahead/look out post, but now that I know your situation I have different advice.

If you don't like your job quit. There are a ton of job opportunities out there right now. Find something that you don't mind doing until your masters is done.

Work harder on your masters so you can get done earlier. Then you can start doing what you want to do sooner. Are you going to set up a private practice? Then start planning that. Save that cash nest egg for your practice, and get a plan together to make sure when you are ready you have all your ducks in a row.

What is left of your free time use it to volunteer. Hospital, old folks home, schools, community outreach. Anywhere you can talk to people. This can only help your future counseling aspirations.

Have some free time left? Go gaming at one of the local places.

It makes absolutely no sense to start a business that you can't put yourself into 100%. If you are not going into it for the long term why do it at all?

And PS. Go Cougs

If you don't like your job quit.

This. Don't use your dissatisfaction with your current job to dig yourself into a hole of aspirations that are likely to fail. 

I've heard successful business folks say "don't start your own business because you hate what you do, start your own business because you love what you do."

z31maniac said:

I'm in the "find a different part-time gig and focus on your degree."

I'd probably spend the extra time you will soon have adding more education, maybe extra certificates for your counseling? I don't know how that works. 

But trying to start a business while finishing up your degree seems like you'll either:

1. Not spend enough time on the business, it will fail, you'll be unhappy.

2. Not spend enough time on school, setting back your timeline, you'll be unhappy. 

I somehow missed that part of the OP, and I can't agree with this enough.

If this is a 2-year gig to fill in while you're finishing school for a different discipline, I strongly urge you to reconsider.  Starting a business and managing it once it opens will occupy 100% of your waking hours.  And it will keep you awake for good measure.

If this is the end goal, thyen I think you can make it work, using some of the excellent feedback here and your own ideas.  But if this is in lieu of just finding a better job for a couple years, I can't imagine investing this kind of time, money, effort, and risk on a temporary thing.

Javelin said:

... going to school online full time for my Master's in Counseling (because having my own private practice where I charge $$$/hr to insurance companies as a LMHC is the real goal but I have 2 years left). I work 25 hours/week at the tire shop and it's just making me realize how much I hate working hard so somebody else can reap the rewards. I am also going through a divorce and am about to have a lot of free time on my hands, especially in the evenings.

Sounds to me like this will be a distraction from where you really should be focusing.  If you hate this 25/hours per week gig, just find another part time gig and keep focusing on "the real goal", or find a way to get involved in something that may pay some dividends in the counseling world via networks/connections/etc.  Two years may seem long now but it'll fly by.  You'll have enough distractions with a divorce and everything that involves.   

There is a similar store near me. They don't really sell much. The bulk of the business is people coming and paying a small fee to play games. Just a very cheap dive with a bunch of very old leather sofas and some big flat screens. He does a ton of birthday parties (all three of my kids went there multiple birthdays) and he also has a massive slot car track which draws a lot of adults. Kids are not allowed to use the track without supervision but it is a very big part of the birthday parties. They also have a ton of lego which is popular, and they put on something called brickwars. No idea what that is but I know a 15 year old who goes every week. 

This is a very low rent business. Everything is used and cheap, and the location is crap so the rent is cheap. But it is a well known, solid business and the guy has been at it for a very long time now. 

xflowgolf said:

Javelin said:

... going to school online full time for my Master's in Counseling (because having my own private practice where I charge $$$/hr to insurance companies as a LMHC is the real goal but I have 2 years left). I work 25 hours/week at the tire shop and it's just making me realize how much I hate working hard so somebody else can reap the rewards. I am also going through a divorce and am about to have a lot of free time on my hands, especially in the evenings.

 

Sounds to me like this will be a distraction from where you really should be focusing.  If you hate this 25/hours per week gig, just find another part time gig and keep focusing on "the real goal", or find a way to get involved in something that may pay some dividends in the counseling world via networks/connections/etc.  Two years may seem long now but it'll fly by.  You'll have enough distractions with a divorce and everything that involves.   

Thank you for the best advice. I move out in 2 weeks and life is just spinning in circles. I applied for some work study positions at counseling centers to get PT work that's focused on my degree/profession and will continue slinging phones at my friend's tire shop until then. I can be patient and just get through school rather than starting another headache. I don't really want to own a hobby shop, I just want to hang out in one all night.

Duke said:

z31maniac said:

I'm in the "find a different part-time gig and focus on your degree."

I'd probably spend the extra time you will soon have adding more education, maybe extra certificates for your counseling? I don't know how that works. 

But trying to start a business while finishing up your degree seems like you'll either:

1. Not spend enough time on the business, it will fail, you'll be unhappy.

2. Not spend enough time on school, setting back your timeline, you'll be unhappy. 

I somehow missed that part of the OP, and I can't agree with this enough.

If this is a 2-year gig to fill in while you're finishing school for a different discipline, I strongly urge you to reconsider.  Starting a business and managing it once it opens will occupy 100% of your waking hours.  And it will keep you awake for good measure.

If this is the end goal, thyen I think you can make it work, using some of the excellent feedback here and your own ideas.  But if this is in lieu of just finding a better job for a couple years, I can't imagine investing this kind of time, money, effort, and risk on a temporary thing.

Also, thank you! 

Javelin said:

I don't really want to own a hobby shop, I just want to hang out in one all night.

Now that's a life plan I can get behind.