depressing #s from the National Retail Hobby Stores Association

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**olympia**

Support your FLGS

http://www.nrhsa.org/welcome/guide.cfm#RealityCheck

Reality Checks

70% of all businesses fail in their 1st year

70% of the surviving businesses fail in their second year. Less than one new business in ten survives beyond seven years.

The average "new" business owner will work six to seven days a week, put in well over 70 hours per week and earn less than minimum wage for his/her efforts.

The gross profit margin for the average hobby shop is around 35%, before expenses and taxes. Net profit margins are usually less than 10%.

FACT - It takes five to seven years for the average small business to reach the break even point and start to show a steady profit.

**MeanGreenStompa**

olympia wrote:
Support your FLGS

I certainly do. Online discounts are of no bloody use if you're nowhere to play the game. Paying a couple of quid extra to ensure I have an amazing store to use for painting, gaming and talking with the rest of the geek and nerd collective is entirely worth it.
Oh and I'm not limited to only one gaming system...

Anyone in the Bristol/South West area, come by 'Cut and Thrust' (or Mr Kolodotschko's Emporium of Needful Things as I like to call it...

)

http://www.dakkadakka.com/core/store_details.jsp?s=18

Buy Local!

**Alex Kolodotschko**

Thanks for the ad!

Seriously though. I always have and will always buy from an independent shop as far as possible.
You're paying for much more than just the models/books/paints etc.
Keeping a store running is expensive.
In short, if you use the facilities you ought to be buying from that store!

**Mr Mystery**

Pay where you play. Simple as that.

Or perhaps your the sort to sit in a Restaurant, and eat sandwiches you brought from home? Or the type who gets Off License Booze, then drinks it in a pub?

**chaos0xomega**

I thought those statistics were fairly common knowledge. I attribute most of those failures to poor management and planning, and archaic business practices.

**brettz123**

chaos0xomega wrote:I thought those statistics were fairly common knowledge. I attribute most of those failures to poor management and planning, and archaic business practices.

Your forgetting undercapitalization......

**Zid**

Sounds about right.

Opening a hobby store takes a lot of work, planning, and most of all, patience; as well as a good amount of capital backing it. You need to offer something unique and have plenty of gaming space as well; too many gaming stores have 1-4 tables sized for a game of 40k... thats not nearly enough! Our biggest FLGS has 9 full sized tables, with room for more in the front/back, and they rent out local hotels for the larger competitions.

Needless to say, however, you also need to open in an area with enough people to support your store.

**Necros**

I think a game store is fairly unique as far as retail goes and a big challenge too, because not only is it a retail store but you're also providing a service (in store gaming, events, etc). Even if you're opening in the perfect spot and have a thriving gaming community you're just gonna need a buttload of cash to pull it off.

You can open a small place, but you'll have little stock and little room to play. You can stress special orders and some people will take advantage of that but for the most part, you won't sell what you don't have in stock because gamers want it now.

So that gets back to the buttloads of cash you should have to not only keep yourself alive, but afford rent in a place where about 25-40% of your space is used for inventory. You can get by with 4 tables for regular gaming, but if you want to run any kind of worthwhile event, and profit from them, you need twice that.

These are all reasons I didn't take the plunge. It would simply cost too much to open and maintain the kind of store I would want to own and that I feel would be able to be profitable, and I just can't afford to live on minimum wage or less. So I'm just gonna save my cash and see how the economy is in a few years.

**Jokorey**

+1 for this.

It's a very real fact of the industry that if LGS go the way of the dodo, hobby/collectible games will be soon to likely follow.

The discount from an online retailer is worth nothing if there's no game to play in the future.

**Ugavine**

I'm all for supporting independent retailers, but when I see the term 'LGS' it makes me laugh/cringe, because the most local games store to me is Games Workshop. Of the two independent stores near me one has a very small stock, the other doesn't stock Warhammer. Sometimes 'LGS' don't help themselves, especially with some of the bad service I've received. It is a shame, the one store I really like but he never has anything in.

I buy lots of RPG stuff online, but really if I'm going to buy 40K I'll probably end up buying in GW for convienience as it's a 10 minute walk away at best and I don't have to have the hassle of going to the post depot to collect it.

**Reecius**

Support your store!

**Athera**

My local store is a GW shop. I support it as I feel appropriate since I do paint there 3 to 4 days a week. But I also support that store by assisting them with painting projects, game events and such.

**Mad4Minis**

I miss having a decent FLGS.

There is a very tiny place about 30 minutes away, but the only table they have is used solely for the owners D&D game...which seems to run anytime him and at least one other of his group are present. Hell, place might not even be open anymore...been a good year since Ive been there.

The other somewhat larger ( but still small) stores are an hour or so away...and are like 80% GW, 15% D&D, small spattering of anything else.

There is a great store about 2 1/2 hours away. Huge selection of mini games, board games, comics, several tables for mins, several for card games, a bunch of TVs for vid games, etc. Too bad its so far away.

**helgrenze**

A few years ago I worked for a Hobby company in S.E PA.... NOT Showcase.... A regular customer asked me what I thought it would cost to open my own shop, and run it the way i felt it should be.... regular advertising instead of just seasonal, in store gaming, demos, clinics for modeling and painting.... The number I came up with was @$500,000.00 to cover rent on the size and location I would want, inventory (biggest slice), wages and salary for the staff for one year, Utilities for one year, and other incedentals. Guys seemed shocked.. note at the price, but at how well thought out I had things.
A short time later, I was fired due to "Lack of Sales", never got to finish that discussion.

**Skarboy**

I like supporting the local businesses, but there has to be a middle ground. Saving 20% or more by going online is very difficult to pass up and most FLGS won't match something like that. I patronize my FLGS through smaller items and tourneys, but for big purchases, hard to justify spending $100 or more just to be a good guy.

The second part of it is that, for whatever reason, the vast majority of hobby/game store owners seem to be collossal dumb asses with no business savvy. Not saying they all are, but the vast majority I have met are. It's extra hard justifying spending a little more on that place when you know it's a drop in the bucket compared to how poorly they are running the shop.

**Ordo Dakka**

Sounds like any other business you can open..

**Platuan4th**

Reecius wrote:Support your store!

Which one? I've got at least 5 options...

In anticipation: someone would have to donate me some money for all 5.

**Ouze**

My LGS (note the absence of the F) closed this year. I did but a few things there, but finally switched to ordering stuff from the Warstore. I have to admit that it's partially for the discount, but has more to do with the fact:

When I made the mistake of buying paint there on my first trip, fully half of them were completely dried out garbage, and half the remainder were nearly empty;

The dirty, dusty merchandise was a decade out of date, and if I wanted anything newer then 3rd edition 40k, he could order it, which would both take longer then the warstore and cost MSRP + 10%,

and every time I went to ask a question, I was made to feel like a huge jerk to interrupt the eternal game of WoW

My store deserved to go out of business, and I wonder how many of these "businesses" that are run like personal clubhouses that also happen to sell stuff are the ones that fail.

**AvatarForm**

brettz123 wrote:
chaos0xomega wrote:I thought those statistics were fairly common knowledge. I attribute most of those failures to poor management and planning, and archaic business practices.

Your forgetting undercapitalization......

and mentality/attitude... many are run by gamers who do it for their own benefit, not because they are passionate about their hobby.

a. Cheaper merchandise for themselves and friends

b. To be the 'go-to guy'... mainly for those seeking popularity because their social skills are still Journeyman (reference to the eternal game of WoW many seem to play)

I was recently screwed over by a LGS. The operator took liberties with my merchandise and deceived me about a special promotion LE mini. Especially after I exclusively bought certain ranges through them, when I could get it cheaper elsewhere. I now refuse to put any more $ through their books.

Automatically Appended Next Post:

olympia wrote:Support your FLGS

http://www.nrhsa.org/welcome/guide.cfm#RealityCheck

Reality Checks

70% of all businesses fail in their 1st year

70% of the surviving businesses fail in their second year. Less than one new business in ten survives beyond seven years.

The average "new" business owner will work six to seven days a week, put in well over 70 hours per week and earn less than minimum wage for his/her efforts.

The gross profit margin for the average hobby shop is around 35%, before expenses and taxes. Net profit margins are usually less than 10%.

FACT - It takes five to seven years for the average small business to reach the break even point and start to show a steady profit.

PS. After reading through it, this site is pulled directly from a first year BA Management textbook.

**GalaxyGames**

It takes is careful planning and execution to pull things out pretty right and well.

LGS's are becoming a dieing breed, sadly.
And it definetly does take money to earn money.

I've done the number crunching and everything myself as well - it really SUCKS to be the LGS, I question profit margins heavily as it is really low, unless you are hitting high volume, even then thats still a lot fo work.

**burning_phoneix**

AvatarForm wrote:

PS. After reading through it, this site is pulled directly from a first year BA Management textbook.

Cool. I didn't know Blood Angels published management textbooks.

But true, that is basically first year knowledge in any business major.

**aka_mythos**

Those statistics are true of all businesses and not just hobby stores. The biggest reason for a business failing is insufficient business planning, which includes planning flexibility. If after costs and they retain 10% and that 10% puts them at below minimum wage, they're bringing in about $250000 in revenue and $25,000 as income. $250000 means only $20,000 in revenue a month. Or about $600 a day.

I do purchase from my local store, I treat it like a convenient stores. I acknowledge I'm not getting the best deals but I do my part.

**Che-Vito**

olympia wrote:Support your FLGS

http://www.nrhsa.org/welcome/guide.cfm#RealityCheck

Reality Checks

70% of all businesses fail in their 1st year

70% of the surviving businesses fail in their second year. Less than one new business in ten survives beyond seven years.

The average "new" business owner will work six to seven days a week, put in well over 70 hours per week and earn less than minimum wage for his/her efforts.

The gross profit margin for the average hobby shop is around 35%, before expenses and taxes. Net profit margins are usually less than 10%.

FACT - It takes five to seven years for the average small business to reach the break even point and start to show a steady profit.

I don't know where you got those numbers. I work at a FLGS, see the margins...and can assure you that it is much better than that.

I can tell you that stores selling GW product at GW prices, will generally be spending only 45% or less of what you pay, to purchase the product.

**olympia**

Che-Vito wrote:
olympia wrote:Support your FLGS

http://www.nrhsa.org/welcome/guide.cfm#RealityCheck

Reality Checks

70% of all businesses fail in their 1st year

70% of the surviving businesses fail in their second year. Less than one new business in ten survives beyond seven years.

The average "new" business owner will work six to seven days a week, put in well over 70 hours per week and earn less than minimum wage for his/her efforts.

The gross profit margin for the average hobby shop is around 35%, before expenses and taxes. Net profit margins are usually less than 10%.

FACT - It takes five to seven years for the average small business to reach the break even point and start to show a steady profit.

I don't know where you got those numbers..

My guess would be the link in the OP.

**oni**

Ouze wrote:I wonder how many of these "businesses" that are run like personal clubhouses that also happen to sell stuff are the ones that fail.

All of them.

**olympia**

oni wrote:
Ouze wrote:I wonder how many of these "businesses" that are run like personal clubhouses that also happen to sell stuff are the ones that fail.

All of them.

I've been in at least one shop where walk-ins were looked at like two-headed freaks. I suppose if you can make a go of it relying on the ten or so regulars that's fine.

**rdlb**

This is really important, and not just in the hobby. Support all your local small businesses. Its not just good for the hobby, its good for your community. The money you spend will improve the quality of life in your town. Its a fact!

Top Ten reasons to Buy Local

1. Keep money in our community: Significantly more money re-circulates locally when purchases are made at locally owned, rather than nationally owned businesses. This multiplier is due in part to locally owned businesses purchasing more often from other local businesses, service providers and farms. Purchasing local helps grow other businesses as well as the local tax base. (A 10/04 study shows that locally-owned businesses generate a premium in enhanced economic impact—For every $100 spent at a locally owned business, $45 goes back into the community and our tax base. For every $100 spent at a chain store, only $14 comes back).

2. Support community groups: Non-profit organizations receive an average 250% more support from smaller locally-owned business owners than they do from large businesses.

3. Keep our community unique. Where we shop, where we eat and have fun—all of it makes our community home. Our one-of-a-kind businesses are an integral part of the distinctive character of this place. Our tourism businesses also benefit. “When people go on vacation they generally seek out destinations that offer them the sense of being someplace, not just anyplace.” ~ Richard Moe, President, National Historic Preservation Trust

4.Reduce environmental impact: Locally owned businesses can make more local purchases requiring less transportation and generally set up shop in town or city centers as opposed to developing on the fringe. This generally means contributing less to sprawl, congestion, habitat loss and pollution.

5. Create more good jobs: Small local businesses are the largest employer nationally and in our community, provide the most jobs to residents.

6. Get better service: Local businesses often hire people with a better understanding of the products they are selling and take more time to get to know customers.

7. Invest in community: Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the community’s future.

8. Put your taxes to good use: Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services as compared to nationally owned stores entering the community.

9. Buy what you want, not what someone wants you to buy: A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.

10. Encourage local prosperity: A growing body of economic research shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one-of-a-kind businesses and distinctive character.

**Scott-S6**

Jokorey wrote:It's a very real fact of the industry that if LGS go the way of the dodo, hobby/collectible games will be soon to likely follow.

The discount from an online retailer is worth nothing if there's no game to play in the future.

LGS's are pretty rare in the UK (stores with gaming tables are even rarer) and the gaming scene here is very strong. You don't need a store to game at - on the contrary, a private club is a much better venue for playing the game and introducing new players.

Personally, I've played one game in a store since 2nd edition (40K) came out.

**JohnHwangDD**

olympia wrote:Support your FLGS

Or...
+ play in your playroom / garage / basement,
+ drinking your own cold beer,
+ eating your own hot food,
+ not worrying about unwashed, uncouth masses bothering you.

The choice is yours!

Automatically Appended Next Post:

Ouze wrote:I wonder how many of these "businesses" that are run like personal clubhouses that also happen to sell stuff are the ones that fail.

Every single one of them.

In most cases, it'd be far cheaper to just rent a man cave.

**Scott-S6**

JohnHwangDD wrote:
+ play in your playroom / garage / basement,
+ drinking your own cold beer,
+ eating your own hot food,
+ not worrying about unwashed, uncouth masses bothering you.

The choice is yours!

Pretty much the same in a club as well.