A Real Opening Budget (The Final Pieces)

Back on Monday we rented the space for our new retail store, and prepared it with carpet and paint. Then we bought the retail fixtures that we would one day stock with all the cool merchandise we carry in hobby game stores! We also, being damn geniuses, set aside money to make sure we can pay the rent for the first three months. Total cost was only $56,798.25. Then on Tuesday we built out our gaming space, because we understand the importance of experiential retail and third space theory. We spent a pittance on that compared to part one, only $4,563.43.

Yesterday we put product on our shelves, developing our full line game store with a healthy selection of board games, a smattering of CCGs, some minis games, and a selection of RPGs. We spent $52,650.00 on product in that segment, but we didn't buy everything. You may want more CCGs, or lines we didn't discuss there, like HeroClix, so that is a soft number. Today, we're going to talk about operating expenses. What are the other things we need in our store? Heat? Electricity? Internet? Television? Cameras? Yes. Yes. Yes. Maybe? Maybe? What are the things we need that our customers don't notice or care about first hand? Credit card processor? Alarm company? Insurance? Yes. Yes. YES! What do those things cost? According to Xcel the national average is $1.21 per square foot on heating/AC and $0.14 per square foot on electricity. So, our 4,000 square feet cost us $5,400.00 annually to our energy provider. That's $450.00 a month. Internet? The national average is tough to determine, because you have to decide how fast you need your internet. Call it about $100.00 per month. Are you going to hang televisions? You'll remember we didn't buy any, but they certainly are a paper saver if you use them as alternate monitors for your computer and post round pairings on them. They also are cool to display learn to play videos on, and sometimes we use them to stream games from major events into the store. I'd say buy a few, they're awesome, and be careful that they're not used to show off-brand sports or sketchy comedies that detract from the shopping experience. You prevent that by not getting any television service, so you don't need it. You might want to budget $1,200.00 or so here to buy and hang two nice televisions though. Security cameras are awesome! You can watch the store when you're not there, record the shoplifters and have evidence for court, and just enjoy the view of your store from anywhere. A good internet streaming camera system that also records things will set you back about $1,000.00. Many of them are available without having to pay for any services, just hook it to the internet and move on with life. Spend this grand, and make sure you position those cameras well. You're going to have to shop around for a credit card processor unless you choose to go with POS that includes one, like Square. By going Square Retail you can get 10 cent swipes and 2.5% credit card fees. Those won't be the lowest you can get anywhere, but they may be the lowest you can get when you first open a store. So, just plan on losing 2.5% to 3% of every credit card sale. Alarm companies are relatively cheap these days. You can get a good setup for free with a contract, and spend about $40 a month on monitoring. If we're going to open a business we're going to spend some money protecting it. Insurance is that thing we hope we never need, but damn we're going to have it. Local laws vary, so check with people who are more qualified than I am, but you're going to need and want some combination of general liability insurance, property insurance, workers compensation insurance, data breach coverage, and an umbrella policy. Depending on how you are configured you may also need key employee coverage and/or officers coverage, and if you're using your car to do work some sort of commercial auto insurance. These costs are nigh impossible to determine because of the huge number of things that go into determining these rates and the variances across the country. Plan some money here, pay for the first six months. Because we don't live in a dream world we're going to make sure we can pay all of these bills for at least three months when we open from our money we set aside. $1,350.00 - Gas/Electric $300.00 - Internet $120.00 - Alarm Monitoring $500.00 - Insurance (guesstimate for first three months) $2,270.00 - Money set aside for three months $1,200.00 - Televisions $1,000.00 - Security Cameras $2,200.00 - New stuff we're buying

 

Staffing

 

You want to open a real store, yes? This isn't a hobby or a part-time gig to pass some time because you're bored. Real businesses maintain real business hours. You may choose to take a day off and close one day each week, let me talk you out of that. Monday - Your primary order placing day. Tuesday - Your primary paperwork day. Wednesday - Orders start arriving. Thursday - Orders keep arriving. Friday - Major daytime shopping day/FNM Saturday - Shoppers Sunday - Shoppers

Since you're doing work Monday-Thursday, be it sending orders, doing paperwork, or stocking your shelves, you might as well be open and helping customers. If you've picked the right location you'll have random foot traffic from neighboring restaurants and businesses during the day, you might as well make sure they see you open. So, call it 11:00 AM to 9:00 PM seven days a week. That's 70 open hours weekly, which isn't a bad number (we're currently open 84 hours weekly), although you might play with the 11-9 number, close a little later on Friday, a little earlier on Sunday. How long do you plan on working 70 hours a week? One week? Two weeks? Two weeks might be about the longest I'd consider it. In those two weeks you should find staff, which costs money. Because I want to find someone decent, and train them, I'm setting aside money to pay them for 30 hours a week over the first three months. Federal minimum wage is $7.85 an hour, but you won't find good help for that. State minimum wage in Colorado is $10.20. Plan something like that. $10.20 * 30 = $306 per week. $306.00 * 13 = $3,978.00 for three months That's an estimate, you'll have to pay payroll taxes and stuff too. Set aside $5,000.00 to pay your new staff member for three months.

(If hiring and training staff is a topic that interests you I would encourage you to check out 'If Your Staff Sucks...' at the GAMA Trade Show, taught by yours truly and my amazing assistant manager. We'll help you recruit the right staff, and talk to you about how to train them, and empower them to help your business succeed.)

$5,000.00 - Set aside to pay staff for three months $2,270.00 - Set aside to pay other bills for three months $2,200.00 - New stuff we decided to buy $9,470.00 - Total spending in our final part We had already spent $114,011.68 coming into this part. We add our $9,470.00 and we're $123,481.68 into opening our game store. I'm sure we've left out some things, because this isn't a business plan, it's a rough sketch. I speculated in the $10,000 version that wasn't that you probably needed $150,000 to this right, and I stand by that number. Things will happen we can't predict in text-land, so the other $25,000.00 will be nice to have.

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