I have received so many great comments from so many of you. I really do appreciate them. Today I received a post from CPADave:
First, I'm a little blown away. I have wanted to open a hobby shop since I was a little kid and now that I know much more about business (I'm an accountant by day), I literally think about it every single day and am trying to figure out the best ways to go about entering the market. Best of luck to you. Part of me wishes other people weren't trying to get into it also, but the more the merrier. The hobby may be in trouble right now, but I think people need more options right now than fewer. Plus, I'm at least a year or two away from even doing the very basic business functions (creating a company, fictitious name, sales tax license, etc.).
Some things to keep in mind is all of the business stuff. You seem to have a very good mentality with the customer/hobby enthusiasts input. That's a great start. Just don't forget the behind the scenes stuff like sales tax, registering your business with the state, any copyrights you want to protect intellectual assets, etc. If you're not sure of these things, definitely find a local and affordable CPA or lawyer to help you with this stuff. It's well worth it. As an accountant, I too often see people forget simple things and then have to pay excessive fines/penalties from the state/federal government, as well as much higher legal/accounting fees to fix what should have been a mundane task.
But you probably knew all that already...
The business side of a card shop is often the scariest and most ignored aspect of opening a shop. I think people ignore it because they don't understand it. I have many advantages in my quest. First I am a Lawyer that works in goverment regulation, coincidently Dave, I provide legal services for the Oregon Board of Accountancy. Second, the wife has an MBA and works in banking, handles payroll, taxes and similar things. Third, the father in law is a financial planner that has his own business. Fourth, there is no sales tax in Oregon, so compliance with state rules is a heck of a lot easier. I am not saying I am special, but I have a head start in trying to plan out this thing. That is why I am taking a year to plan this out. Anyone that is looking at doing what I am attempting to do would do well to heed Dave's advice.
I am pretty sure that anyone that reads my blog reads wax heaven. Mario has posted the news of another shop closing. Sad indeed, but what I have been unable to determine is how much an average shops monthly overhead is.
I can tell you that I would never do this if I was going to depend on the shop for income. I have run the numbers and it is freightening. Basically, you have to sell 150 or so wax boxes to come close to making a living. I figured $20 of profit per box. I am not sure that its possible to make that much. Although some people might be able to.
I did break down and go into the pack searching shop to buy some supplies. They had a box of Topps Sterling for $310. First, I am not going to carry stuff like that. I will special order, but probably not stock it. Second, that price isn't close to competitive. A search of Ebay shows me a price of $215. For that extra $95 you could pick up a couple other boxes of whatever. I am shocked he is able to stay in business after running the numbers. Maybe that is why he can is taht his margins are huge.
Speaking of the numbers. Using 2008 wax as an example, I see 8k-13k for wax and supplies to stock my store. This Monday I am going to look at retail space. I am going to attempt to minimize that start up cost to get a handle on sales and demand.
I think my 10k - 20k projection for everything is going to be close. I think I might hold of on auto balls, jerseys, McFarlane Toys, and such when I start out. Although I can add some things without too much additional outlay.