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As part of our continuing series on how to open a trading card shop, we spent some time with Dave Yeates from Grosnor Distribution in Canada. Take a listen as he provides some tips to be successful in this industry as a shop owner and some insight into creating a business plan.
Dave was also kind enough to answer some follow up questions for us:
Question: How do I write a business plan to open up a trading card shop?
Dave at Grosnor: “The most important thing to do when writing a business plan is to be as accurate as possible in trying to forecast your expenses while being conservative with forecasting your sales. Even though many items in your store will be keystone, assume a 30 or 35% gross margin on sales to allow a little more room for error in case things don’t go as planned. It is much better to be on the short side of a business plan and end up out performing this plan, than to have the opposite occur. Talk with shops and ask them about unexpected costs they had come up. When I started back in this business in 1989, it only took me four months to exceed my yearly forecast in my business plan because I did not factor in all the potential expenses of my business.”
Question: How do I apply for a loan for a trading card business?
Dave at Grosnor: “A detailed business plan will be required to apply for a loan to open a trading card store. Banks are traditionally unwilling to lend people money for trading card stores without having these funds 100% secured by a third party co-signer with ample assets to cover these loans. In my case the Canadian government had, and still has, a program wherein they will match you dollar for dollar and loan you money as a ‘New Venture Loan.’ If you get creative, you can definitely make that work to your advantage and get a good start.”
Question: How do I hire staff for a trading card store?
Dave at Grosnor: “Honestly, the way I look at this is YOU ARE the staff of your new trading card store and you should be prepared to work seven days a week in the beginning. Hopefully you are young like I was when I entered into this business (24) and not afraid of hard work and long hours. I did hire a local kid from the neighborhood that was always very helpful when I asked to assist with odd jobs around the shop. Because of the values tied to your inventory, it is difficult to find people you can trust.”
Question: Where should I advertise?
Dave at Grosnor: “My favorite spot initially to advertise was in the local newspaper. Make sure to add in advertising as a cost in your business plan. Advertising rates are very affordable right now and you specifically target potential customers in the area. Include a coupon for 10% off or even better, a free pack of cards with copy of the ad so you can evaluate the advertising effect on your business and costs. Keep tweaking it until you find something that works as every area is different.”
As you can spend more and more time interviewing shop owners and distributors, they frequently mention a business plan and it really is an important piece to the puzzle in terms of getting your start in the sports collectibles industry. For more on how to create a business plan for your small business, click here.
Looking for more information on how to open up a trading card shop of your own? Check out the first three stories on how to open up a shop here:
The information provided in this story is for assistance only and is not intended to be and must not be taken alone as the basis for an investment decision. Opening a trading card store, like any other business, presents certain risks for the business owner. Each reader of this information should make such investigations as it deems necessary to arrive at an independent evaluation of an investment.