Do I really need a business plan to sell games?

I mean, don’t I just rent an empty place in a strip mall somewhere, put the games on the shelf and sell ‘em to people?

Well, sure you can. Just be prepared to have a lot of surprises roll your way. For example, should you be happy or scared when you figure out that your rent is costing you 30% of your income. (Answer:  you should be terrified. All your fixed costs should be no more than 10% of your gross income.)

In business, surprises are mostly bad. Sure, there’s the occasional pleasant surprise, but most of the time they fall into the, “Oh, S***!” category. A business plan is an attempt to eliminate as many surprises as possible.  Think of everything you can now before it sneaks up and bites you on the ass.

The downside is, of course, these things aren’t easy to write. Particularly if you’re new to business. They’re especially good at forcing you to grok all those business terms you think you know the meaning of, but you really don’t. I’ve been puzzling over the exact meaning of Long Term Assets for the last two days. I eventually had to go to the library and get a couple books on reading financial statements.

Then there’s the long list of unknowns you’ll have to write about.  The first draft of my business plan was half blank, mostly because I had no idea how to answer the questions. How much money will you spend on advertising? What kind of advertising? An exactly who are you advertising to? How much money do you expect to make the first year? How about three years from now? Will it be enough to hire more people so you won’t completely crash and burn from working 80 hours a week?

The upside is, of course, the tremendous feeling of confidence it gives you. You may not have all the answers, but at least you’ve got a pretty good shot at finding them

I’ve been working with Business Plan Pro by Palo Alto Software. It’s a great program that walks you through each section of the document, explaining what each part is for, why it’s needed and giving a few examples. The best part is, the software keeps track of all the numbers for you. If I enter my rent in one part of the document, it automatically fills it in under any other section that needs it. I recommend it.

Next time, shopping for fixtures. “Hey mister! Got any old display cases out in the barn?”