How to open a board game shop?
There's no doubt that starting a board game shop requires a lot of work, but with expert planning, you'll be well on your way to creating a profitable business venture.
This guide will give you a low down on all of the major steps involved, from choosing a legal structure to creating a financial forecast and registering your business.
We will also walk you through the process of checking whether or not your idea can be viable given market conditions.
Let's embark on this exciting journey together!
Learn how a board game shop works
Before you can start a board game shop, you need to have a solid understanding of how the business works and what are its main revenue streams.
This will give you a glimpse into the profitability potential of your venture, whilst allowing you to decide whether or not it is a good fit for your situation (current skill set, savings and capital available to start the business, and family responsibilities).
It may be that creating a board game shop is an excellent idea, but just not the right one for you.
Before starting their own company, successful entrepreneurs typically:
- Consult with and take advice from experienced board game shop owners
- Acquire hands-on experience by working in an operational board game shop
- Take relevant training courses
Let's explore each option in a bit more detail.
Consulting with and taking advice from experienced board game shop owners
Having "seen it all", established business owners can offer valuable insights and hands-on advice drawn from their own experiences.
This is because, through both successes and failures, they've gained a more informed and practical understanding of what it takes to build and sustain a successful board game shop over the long term.
Acquiring hands-on experience by working in an operational board game shop
If you want to open a board game shop, having industry-specific experience is imperative because it equips you with the knowledge, network, and acumen necessary to navigate challenges and make informed decisions critical to the success of your future business.
You'll also be able to judge whether or not this business idea is suitable for you or if there might be conflicts of interest with your personal life (for example, long working hours could be incompatible with raising young children).
This work experience will also help you to make contacts in the industry and familiarise yourself with customers and their expectations, which will prove invaluable when you set up your board game shop.
Take relevant training courses
Taking a training course is another way of familiarising yourself with the business model of your future activity before you decide to make the jump.
You may choose to complete a training course to obtain a certificate or degree, or just take online courses to acquire practical skills.
Before going any further in setting up your venture
Before you go any further with your plans to open a board game shop, make sure you have a clear vision of what it will take in terms of:
- What skills are needed to run the business successfully (do you have some or all of these skills?)
- What a standard working week looks like (does it suit your personal commitments?)
- What sales potential and long-term growth prospects the board game shop has (compare this with your level of ambition)
- What options you'll have once you decide to retire (or move on and inevitably sell the company)
This analysis of the business model and the constraints of the business should help you to check that your idea of launching a board game shop fits your entrepreneurial profile.
If there is a match, it will then be time to look at assembling the founding team of your business.
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What is the ideal founding team for my board game shop?
The next step to opening your board game shop, is to decide whether to assemble an ideal team or venture solo.
The failure rate for business start-ups is high: almost half don't make it past the five-year mark, and setting up a board game shop is no exception.
Starting with a group of co-founders helps reduce this risk as each of you brings complementary skills and enables the financial risk to be spread on multiple shoulders.
However, managing a business with multiple partners comes with its own set of challenges. Disagreements among co-founders are quite prevalent, and they can pose risks to the business. That's why it's essential to carefully weigh all aspects before launching a business.
To help you think things through, we recommend that you ask yourself the following questions:
- Do you need more co-founders for this venture?
- Do you share the same vision and ambition as your potential partners for this project?
- What is your plan B?
Let's look at these issues in more detail.
Do you need more co-founders for this venture?
To answer this question you will need to consider the following:
- Are there any key skills missing for which you would rather have a business partner than recruit an employee?
- Do we have enough equity? Would the company benefit from more capital at the outset?
- Will the proposed number of founders make it easy to make decisions (an odd number of partners, or a majority partner, is generally recommended to avoid deadlock)?
In simple terms, co-founders bring skills, money, or both to the table. Having more partners is beneficial when there's a lack of either of these resources.
Do you share the same vision and ambition as your potential partners for this project?
One of the main sources of conflict between co-founders comes from a lack of alignment on the long-term vision.
To avoid any risk of disagreement, it is advisable to agree on ambitions from the outset and to provide an exit mechanism for one of the partners in the event of disagreement.
What is your plan B?
We hope your board game shop takes off and thrives, but it's smart to have a "plan B" just in case things don't go as expected.
How you tackle potential failure can vary broadly depending on the type of co-founders (close friend, spouse, ex-colleague, etc.) and the personal circumstances of each of them.
For example, launching a family business with your spouse might seem exciting, but if it fails, you risk losing all of your household income at once, which might be stressful.
Likewise, starting a business with a friend might strain the friendship if things go wrong or if tough decisions need to be made.
Before diving in, make sure to thoroughly think about your choices. This way, you'll be ready for whatever might come your way when starting up.
Conducting market research for a board game shop
The next step in launching a board game shop is to carry out market research. Let's take a look at what this involves.
The objectives of market research
The objective here is very simple: to assess the level of demand for your business and whether there is an opportunity for it to thrive in your chosen location.
The first step will be to check that the market is not saturated with competing offers and that there is room for a new player: your board game shop.
Your market analysis will also help you identify a concept and market positioning that has every chance of being successful in your target market, thereby helping increase your business's chances of success.
Carrying out market research for your board game shop will also enable you to better understand the expectations of your future customers and the most effective ways to communicate with them in your marketing plan.
Analyse key trends in the industry
Your market research should start with an industry analysis in order to gain a good understanding of the main players and current trends in your sector.
Once you've delved into the current state of the market, it will be time to assess what proportion of your target market can be seized by your board game shop. To do this, you will need to consider both the demand and supply side of the market.
Assess the demand
After checking out the industry, let's shift our focus to figuring out what your potential customers want and how they like to buy.
A classic mistake made by first-time entrepreneurs is to assess demand on the global or national market instead of concentrating on their target market. Only the market share that can be captured by your company in the short term matters.
Your demand analysis should seek to find answers to the following questions:
- Who are your target customers?
- How many are there?
- What are their expectations?
- What are their buying habits?
- How much budget do they have?
- What are the different customer segments and their characteristics?
- What are the main distribution channels and means of communication for reaching each segment?
The aim of the demand analysis is to identify the customer segments that could be targeted by your board game shop and what products and services you need to offer to meet their expectations.
Analyse the supply side
You will also have to familiarize yourself with the competing board game shops on the market targeted by your future business.
Amongst other things, you’ll need to ask yourself:
- Who are the main competitors?
- How many competitors are already present?
- Where are they located?
- How many people do they employ?
- What is their turnover?
- How do they set their prices?
- Are they small independent businesses or national players?
- Do they seem to be in difficulty or are they flourishing?
- What is their market positioning?
- What types of products and services do they offer?
- What do customers seem to like about them?
The aim of the competitive analysis is to identify who your competitors will be and to gather information that will help you find a differentiating commercial positioning (more on that later in this guide).
Regulations
Conducting market research is also an opportunity to look at the regulations and conditions required to do business.
You should ask yourself the following questions:
- Do you need to have a specific degree to open a board game shop?
- Do you need specific licences or permits?
- What are the main regulations applicable to your future business?
Given that your project is at an early stage, your focus should be to clear that there are no roadblocks from a regulatory standpoint before you deep dive into the planning process.
Once your project is more advanced, you will have the opportunity to talk about regulation more in-depth with your lawyer.
Concluding your market research
By the time your market research is completed, you should have either:
- Pinpointed an untapped business opportunity
- Or arrived at the realisation that the market is saturated, prompting the search for alternative business ideas or models.
If the conclusion is that there is an opportunity in the market to cater to one or more customer segments currently overlooked by competitors, that's great!
Conversely, if you come to the conclusion that the market is already saturated, don’t panic! The good news is that you won’t spend several years working hard on a project that has little chance of success. There is no shortage of business ideas either - at The Business Plan Shop, we have identified more than 1,300 potential business ideas!
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Choose the right concept and position your board game shop on the market
The next step to start a board game shop is to choose the company's market positioning.
Market positioning refers to the place your product and service offering occupies in customers' minds and how it differs from how competitors are perceived. Being perceived as a high-end solution, for example.
To do this, you need to take the following considerations into account:
- How can you make your business stand out from your competitors?
- Can you consider joining a franchise as a way to lower the risks involved?
- Is it better to start a new board game shop or acquire one that is already up and running?
- How to make sure your concept meets customer needs?
Let's look at each of these in a little more detail.
How can you make your business stand out from your competitors?
When you decide to start your own board game shop, you're facing an upward challenge because your competitors are already ahead. They have a good reputation, loyal customers, and a strong team, while you're just getting started.
Opening a board game shop offering exactly the same thing as your competitors is risky and potentially doomed to fail: why would customers take the risk of choosing a newcomer rather than a company with a proven track record?
This is why it is advisable to avoid direct confrontation by adopting a differentiated market positioning wherever possible: in other words, by offering something different or complementary to what is available on the market.
To find a market positioning that has every chance of success, you need to ask yourself the following questions:
- Can you negate direct competition by serving a customer profile that is currently poorly addressed by your competitors?
- Can your business provide something different or complementary to what is already available on the market?
- Why will customers choose your board game shop over the competition?
- How will your competitors react to your entry into their market?
- Is the market sufficiently large and fragmented (i.e. not dominated by a few large chains) to allow you to set up an independent business, or is it better to consider another avenue (see below)?
Can you consider joining a franchise as a way to lower the risks involved?
A good way of getting a market positioning that is guaranteed to seduce customers is to join a group with a proven concept.
Admittedly, joining a franchise is not necessarily as exciting as opening a board game shop with a clean slate, everything to invent and total freedom to do so, but it is a proven way of reducing the risk of entering the market.
By joining a franchise, you will benefit from a concept that is successful with customers, the brand recognition of a large network, and operational support with regard to supplier relations, processes and operating standards, etc.
In return, you will have to pay an entry fee and an annual royalty (on your company's sales).
Joining a franchise is a trade-off where you need additional capital and get less freedom in exchange for a lot less risk. It's not for everyone, and it's not possible everywhere (franchise opportunities vary from region to region), but it is nevertheless an option you should explore.
Is it better to start a new board game shop or acquire one that is already up and running?
Another way to benefit from a proven concept and reduce the risk of your project is to take over a board game shop.
Buying a board game shop allows you to get a team, a customer base, and above all to preserve the balance on the market by avoiding creating a new player. For these reasons, taking over a business is a lot less risky than creating one from scratch.
Taking over a business also gives you greater freedom than franchising, because you have the freedom to change the positioning and operations of the business as you see fit.
However, as you can imagine, the cost of taking over a business is higher than that of opening a board game shop because you will have to finance the purchase.
How to make sure your concept meets customer needs?
Once you have decided on your concept and the market positioning of your future board game shop, you will need to check that it meets the needs, expectations and desires of your future customers.
To do this, you need to present it to some of your target customers to gather their impressions.
Where should I base my board game shop?
The next step in our guide on starting a board game shop involves making a key choice about where you want your business to be located.
Picking the ideal location for your business is like selecting the perfect canvas for a painting. Without it, your business might not showcase its true colors.
We recommend that you take the following factors into account when making your decision:
- Visibility and foot traffic: A board game shop relies heavily on customers coming into the store to browse and purchase items. Therefore, it is important to choose a location with high visibility and foot traffic to attract potential customers.
- Parking space, road and public transport accessibility: This is important for customers who are driving to the store, as well as those who rely on public transport. A board game shop should be easily accessible for all types of customers.
- Proximity to target customers: Knowing your target market is crucial for the success of a board game shop. It is important to choose a location that is close to your target customers, such as families with children, college students, or young adults.
- Competitor presence: It is important to research the competition in the area before choosing a location for a board game shop. If there are already several established game shops nearby, it may be difficult to attract customers and differentiate from competitors.
- Efficient logistics: For an industrial business, it is important to have a location that allows for efficient transportation of goods and materials. This will help with inventory management and reduce costs.
- Storage space: A board game shop requires a significant amount of storage space for inventory. It is important to choose a location that has enough space to store and display a variety of games.
- Availability of skilled labor: This may not seem as relevant for a retail business, but having employees with knowledge and passion for board games can greatly enhance the customer experience and drive sales.
- Easy access to main roads: This is important for both customers and suppliers. A board game shop should have easy access to main roads for deliveries and for customers to find the store.
- Adequate infrastructure: For an agricultural business, it is important to consider the climate and soil quality of the location. This will impact the types of games that can be grown and sold in the area.
- Premises layout: The layout of the store is crucial for a board game shop. It should allow for easy browsing and have dedicated space for events and game demonstrations.
- Space to grow: As a hospitality business, a board game shop may want to expand in the future by offering food and drinks or hosting events. It is important to choose a location with enough space to accommodate potential growth.
- Demographic of local population: Knowing the demographic of the local population can help determine if there is a demand for board games in the area. This can also help in tailoring the selection of games offered in the store.
This list is not comprehensive and will have to be adjusted based on the details of your project.
The parameters to be taken into account will also depend on whether you opt to rent premises or buy them. If you are a tenant, you will need to consider the conditions attached to the lease: duration, rent increase, renewal conditions, etc.
Lease agreements differ widely from country to country, so it's essential to review the terms that apply to your situation. Before putting pen to paper, consider having your lawyer look carefully at the lease.
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Decide on a legal form for your board game shop
It's now time to think about the legal structure for your board game shop.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
What are the most common legal structures?
Naturally, the names and intricacies of business structures differ by country. However, they typically fit into two main categories:
- Individual businesses
- Companies
Individual businesses
Individual businesses are usually a good fit for self-employed individuals and freelancers who want limited administrative work. These types of entrepreneurs are commonly referred to as sole traders or sole proprietorships.
As mentioned above, the main benefit of being a sole trader is that minimal paperwork is required to launch and operate the business. Tax calculations are also relatively simple and annual accounts are not always required (and when they are, usually don't need to be audited) which saves a bit of time and money on bookkeeping and accounting fees.
Decision-making is also easy as the final decision is fully dependent on the sole trader (even if employees are hired).
However, being a sole trader also has drawbacks. The main disadvantage is that there is no separation between the individual running day-to-day operations and the business.
This means that if the business were to file for bankruptcy or legal disputes were to arise, the individual would be liable for any debts and their personal assets subsequently at risk. In essence, sole traders have unlimited liability.
This also means that profits earned by the business are usually taxed under the personal income tax category of the sole trader.
Another drawback is that sole traders might find it harder to finance their business. Debt (bank loan for example) is likely to be the only source of external financing given that the business doesn't have a share capital (effectively preventing equity investors from investing in their business).
Companies
Companies are more flexible and more robust than individual businesses. They are suitable for projects of all sizes and can be formed by one or more individuals, working on their own or with employees.
Unlike individual businesses, companies are recognised as distinct entities that have their own legal personality. Usually, there is also a limited liability which means that founders and investors cannot lose more than the capital they have invested into the business.
This means that there is a clear legal separation between the company and its owners (co-founders and investors), which protects the latter's personal assets in the event of legal disputes or bankruptcy.
Entrepreneurs using companies also gain the advantage of being able to attract equity investment by selling shares in the business.
As you can see companies offer better protection and more financing options, but this comes at a trade-off in terms of red-tape and complexity.
From a taxation perspective, companies are usually liable for corporation tax on their profits, and the income received by the owners running the business is taxed separately (like normal employees).
Normally, companies also have to produce annual accounts, which might have to be audited, and hold general assemblies, among other formalities.
How should I choose my board game shop's legal setup?
Choosing the right legal setup is often simple once you figure out things like how many partners you'll have, if you hire employees, and how much money you expect to make.
Remember, a great business idea can work well no matter which legal structure you pick. Tax laws change often, so you shouldn't rely too much on getting specific tax benefits from a certain structure when getting started.
You could start by looking at the legal structures most commonly utilised by your competitors. As your idea evolves and you're ready to officially register your business, it's a good idea to confirm your choice using inputs from a lawyer and an accountant.
Can I switch my board game shop's legal structure if I get it wrong?
Yes, you have the flexibility to change your legal setup later, which might include selling the existing one and adopting a new structure in certain situations. Keep in mind, though, that this restructuring comes with additional expenses, so making the right choice from the start is usually more cost-effective.
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Assess the startup costs for a board game shop
The next step in creating a board game shop involves thinking about the equipment and staff needed for the business to operate.
After figuring out what you need for your business, your financial plan will reveal how much money you'll need to start and how much you might make (check below for more details).
Because every venture is distinctive, providing a reliable one-size-fits-all budget for launching a board game shop without knowing the specifics of your project is not feasible.
Each project has its own particularities (size, concept, location), and only a forecast can show the exact amount required for the initial investment.
The first thing you'll need to consider is the equipment and investments you'll need to get your business up and running.
Startup costs and investments to launch your board game shop
For a board game shop, the initial working capital requirements (WCR) and investments could include the following elements:
- Storefront Renovation: This includes any renovations or improvements to the physical space of your board game shop, such as painting, flooring, lighting, and fixtures. These renovations can help create a welcoming and visually appealing atmosphere for customers.
- Inventory: The initial purchase of board games and other related products for your shop is a significant capital expenditure. You will need to invest in a variety of games to attract customers and maintain a steady flow of inventory to keep up with demand.
- Furniture and Equipment: This includes items such as display shelves, tables, chairs, and cash registers. These items are essential for creating a functional and comfortable shopping experience for your customers.
- Point-of-Sale (POS) System: A modern and efficient POS system is crucial for managing sales, inventory, and customer data. This system will also help you keep track of your finances and make informed business decisions.
- Security System: Protecting your store and inventory from theft is essential. A security system, including cameras, alarms, and other security measures, is a necessary capital expenditure for any board game shop.
Of course, you will need to adapt this list to your business specificities.
Staffing plan of a board game shop
In addition to equipment, you'll also need to consider the human resources required to run the board game shop on a day-to-day basis.
The number of recruitments you need to plan will depend mainly on the size of your company.
Once again, this list is only indicative and will need to be adjusted according to the specifics of your board game shop.
Other operating expenses for a board game shop
While you're thinking about the resources you'll need, it's also a good time to start listing the operating costs you'll need to anticipate for your business.
The main operating costs for a board game shop may include:
- Staff costs: This includes salaries, wages, and benefits for your employees, such as sales associates, game masters, and customer service representatives.
- Rent: The cost of leasing or renting a physical space for your board game shop.
- Utilities: This includes electricity, water, and gas expenses for your shop.
- Inventory: The cost of purchasing and restocking board games and other products to sell in your shop.
- Marketing and advertising: Expenses for promoting your shop and its products, such as social media ads, flyers, and events.
- Accountancy fees: The cost of hiring an accountant to help with financial management and tax preparation.
- Insurance: This includes general liability insurance, property insurance, and worker's compensation insurance.
- Software licenses: The cost of purchasing and renewing licenses for software used in your shop, such as point-of-sale systems and inventory management software.
- Banking fees: Charges for services such as credit card processing, check deposits, and wire transfers.
- Maintenance and repairs: The cost of maintaining and repairing equipment, fixtures, and furniture in your shop.
- Office supplies: Expenses for purchasing necessary office supplies, such as paper, ink, and pens.
- Professional fees: This includes fees for legal services, consulting services, and other professional services.
- Training and development: The cost of providing training and development opportunities for your employees to improve their skills and knowledge.
- Cleaning services: Expenses for hiring a cleaning service to maintain the cleanliness of your shop.
- Credit card fees: Charges for processing credit card transactions for purchases made in your shop.
Like for the other examples included in this guide, this list will need to be tailored to your business but should be a good starting point for your budget.
How will I promote my board game shop's?
The next step to starting a board game shop is to think about strategies that will help you attract and retain clients.
Consider the following questions:
- How will you attract as many customers as possible?
- How will you build customer loyalty?
- Who will be responsible for advertising and promotion? What budget can be allocated to these activities?
- How many sales and how much revenue can that generate?
Once again, the resources required will depend on your ambitions and the size of your company. But you could potentially action the initiatives below.
Your board game shop's sales plan will also be affected by variations in consumer demand, like changes in activity during peak holiday seasons, and the dynamics within your competitive environment.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
Founder & CEO at The Business Plan Shop Ltd
