Monday, July 3, 2017

Business Components Today

I already run four stores, really.  Or three-and-a-half if you want to be a little more granular in terms of magnitude.  Four permanent facilities and a portable kit, plus two more facilities on the horizon.  DSG has seen the greatest success when I am able to keep its business components integrated for economy of scale but separate enough administratively to track metrics and to insulate each; they can thus share success without sharing as much risk.  This is at the heart of why businesses seek to grow and scale up.

My four stores might more appropriately be referred to as "Business Components."  I have heard them called "modules," though in my mental framework a module is something one level lower that can cross between components.  Administration is a module.  (That's my job.)  Marketing is a module, and unfortunately to some extent that is also, still, my job.  We're not quite at scale to have dedicated marketing staff.  One day, and not long from now.  Organized Play can be a module, but for now is still separate at the physical stores.

The DSG business components are:

  1. Gilbert store (commercial storefront)
  2. Tempe store (commercial storefront)
  3. Mesa store (pending commercial storefront)
  4. Payson store (pending commercial storefront)
  5. Online store (warehouse fulfillment)
  6. Offsite store (portable storefront)
  7. Administrative office (my house)

The Gilbert store, at 2531 S. Gilbert Rd, will soon become the Chandler retail store, located at... nope!  Still can't reveal that yet.  But we expected to be able to reveal it in July and that's still the plan.  Finalizing our lease is taking longer than expected.  The Gilbert store as it exists right now is our original location from 2012 and is responsible for most of our business volume.  Chris Huish is the Gilbert store manager.

The Tempe store, at 1523 E. Apache Blvd, is, in the words of Zohar from Vandal Hearts, "just as you see it."  Formerly Tempe Comics and now our most centrally-located DSG facility, the Tempe store is posting huge year-over-year sales gains now that our trial and error has led us to orient the store with a laser focus on TCGs and comics.  Jake Wachtler is the Tempe store manager.

The Mesa store is still months away from opening, as it is prioritized entirely after the move from Gilbert to Chandler.  It might get pushed into 2018.  But I've already created the business component for it and set up its internal admin.  We already have a sales tax license in Mesa because of vending at Zapcon and last year's Game On Expo via the offsite store module.  We have fixtures to spare and enough inventory to split.  The primary obstacle to this store being open already is the lack of ownership time, attention, and labor available to devote to it, with myself and Griffin and our silent partners all quite busy with existing work and the Chandler move.

The Payson store is at least a year away from opening, perhaps longer.  But like with Mesa, I have created the business module on our books.  It's only a first step, but a significant one.

The online store is the only module aside from the Gilbert store that has existed since the beginning of DSG, and we'd have been better off if I had separated it better from the start.  Online ops are mostly TCGPlayer transactions at this point, with a side helping of eBay.  The online store shares most of its inventory with the Gilbert store, for which it's only a portion of inventory.  The small remainder is solely for eBay listings.  Tanner Gaede is the online store manager.

The offsite store, or "Remote Ops" as we call it in slang, is a portable store location in itself, now with dedicated fixtures and equipment.  We have used it for the past four years at Phoenix Comicon, but we are not planning to renew for 2018 after the fiasco of this year's show.  This makes pulling the plug on the Remote Ops module a realistic option; it justified most of its resources when we had one big show every year to work, and with the move this summer we aren't going to be taking part in Game On Expo either.  Phoenix Comicon was less useful to us each year, and by 2017 most people who saw our booth already knew who we were.  Accordingly, we're out on comic convention appearances from now on.  However, our pop-shop appearances with the offsite store at local festivals and events have been successful, and our appearance at Zapcon 2017 in late April exceeded expectations.  With Chandler and Mesa on deck, I think it makes the most sense to put this business component on ice for the most part.  We have some smaller appearances on the itinerary, and we can worry about doing bigger things in 2018 and beyond.  Our Comics/Media Manager, Dustin Chapman, doubles time as the offsite store manager.

Finally, there is my administrative office and erstwhile storage facility for far too much of the store's gear, and that's my own home in Chandler.  Since I am the statutory agent for the DSG LLC, I also receive governmental mail for the business at home, which is something that has always bothered me.  It's like, come on, you jerks.  Leave me one place I can have some separation.  But I understand why it is done.  An absentee owner or an owner who did not want his employees getting the business's financials or sensitive documents would need them sent somewhere other than the store's mailbox.  And not all businesses are at such scale that they justify a corporate office, even a small one.  Especially not in today's era of cloud computing where just about anywhere can serve as a corporate office.

Late last year I embarked on an ambitious plan to expand to seven store locations.  As it happened, two of the added locations didn't work out, one did, and the rest are still yet to be seen.  But if I look at how I'm running the business today, I don't really need to have notches on my belt to be happy about the way the enterprise has grown.  It helps me sleep a little better at night knowing that it is unusual for all of my business components to be underperforming simultaneously.  That has smoothed out the course of business and our flexibility and resilience.

If your store is starting to get a little out of hand and you find yourself struggling to keep track of it all, consider whether what you really need to do is separate the business components that can, and possibly should, operate under their own horsepower.

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