Lots of blogs out there will tell you the cost of opening a good game store. I’m here to tell you not to do it. This is not going to be a polite post; I’m not being discouraging or encouraging, I’m being pragmatic and blunt. If that offends you, you’re not ready to open a business and receive harsh feedback in the form of customers voting with their wallets.
First, I’m assuming you don’t work in the game industry right now, aren’t professionally credentialed in any way to run a business, and don’t already own a small business. If that’s not you, move on. Do whatever you like, you’re probably better qualified to make your own decision than I am.
Let’s say you want to get a good paying job in an industry you like, live in a nice neighborhood, have a decent car, take some time off, and have some luxury items (I like Scotch, but you do you). That will take 4-8 years of school or training, followed by 1-3 years of on the job training. After that, your job will be pretty much guaranteed, unless you do something really dumb, like embezzling or sleeping with your boss’s spouse. The game industry will take that long to get good enough at it that you stop making dumb mistakes and are well-connected enough to get the product you want, when you want it. After that, you’re going to make about 7 cents for every $1 your store sells. And that’s if you’re very, very good and run an efficient business. Wowie. That’s 2 whole cents better than a high risk stock portfolio, except you’re doing all the work yourself.
80% of businesses fail in 12 months
Think on that. You’re smart, you know your product and market, and you have some cash to spend. So does every failed business out there, and so did every one of the business owners.
We idolize the business owner in the US. They’re like cowboys, going it alone against a dry and harsh landscape. Guess what? Business ownership is the wild west and it’s far more likely than not that your business will end up like those cattle skeletons you see in westerns – dry and picked clean in the first year. If you felt even a touch of fear, or you aren’t in a position to risk 100% of your startup capital and still be financially solvent, don’t open a business.
A good store costs $250,000 to open. If it’s a small-to-medium store. If it fails, it might take another quarter million to do it. If it doesn’t fail, it still might take that extra quarter million to not fail. And let’s be clear about this: if you have half a million lying around, and you’re thinking of opening a business, consider opening a retirement account instead. If you’re under 40, that money will pay huge dividends before you’re retirement age, and you’ll do a lot better than owning your own business.
Also, if you have to open lines of credit or taking loans to do this, you’re not ready. If you must borrow money, you aren’t ready. I’m not saying don’t borrow money, I’m saying if you’re risking more than you have, this industry isn’t going to pay back enough to make opening a game store a financially solid decision.
You may end up making $30,000 a year
And working 70 hours weeks and trapped in a 3-10 year lease in a part of town the landlord won’t let you out of without a big fat penalty. Sounds like hell? It will be! And that’s where most game stores end up. And I’m talking the 20% that are still making some money after month 12. The business world is harsh, and you are not a special snowflake, or an exception to the rule. If your market is inclined to crush you, or leave you in poverty, it will do so without mercy.
You will never retire into your store
Store owners talk a lot of shit about retiring and having their store stay open and keep paying them. I’ve never known that to happen. In researching this, I was unable to find a single confirmed story of a retired store owner with a store that still functioned without them and made a suitable income for their retirement (commence emailing me about how I’m wrong, from owner’s still putting in full time hours at their stores). Stores that have retirement plans? Sure, I have a retirement plan. It’s smart. If you don’t have a retirement account yet, and you’re over 25, go open one. Don’t want to? Go visit the kind of nursing home that you go to when you don’t have a retirement fund. You’ll be inspired.
Retiring from the business and raking in the cash from a beach? HA! Don’t make me laugh. You’ll work it until you close it, and hope you invested your money somewhere else to live on in your dotage.
The market is crowded
In most US markets, the game industry is packed with wanna-be stores selling the same products and offering the same formula. A few stores offer good atmosphere. Some sell coffee. A few have amazing demo programs. Some are extremely welcoming to women and minorities. One might be a tournament center. One will claim to be a regional hub. Go to the next city over and the same formula will be repeated. There are too many game stores to be truly profitable, and big box stores are entering the market and will soon drown out the small, the inept, and the new. Likely, you are one or all of those.
If you’re still really, really, really sure you want to open a game store, then prove it. Most people have no idea how hard this is until they do it, and they find they hate the work once they begin.
So before you piss away your retirement savings, go work in the market you want to own a store in. If it’s gaming, like me, go find an existing store that will hire you in a market you don’t want to be in. Tell them you’re interested in learning the industry and opening a store, that you’re willing to sign a non-compete (doesn’t matter if it’s legal in your jurisdiction, say it anyway), and that you’ll work like a three people to learn the ropes. Work there for 3 years. If you can still stand the customers,the hours and the product, go read one of those blogs that tells you how to open a store.