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Video store business plan for starting your own business
Video games are becoming more and more popular among youth, teens, as well as adults. Setting up an arena where your customers could play video games, as an individual as well as in groups, can be immensely profitable. To enter this business, making a business plan for a video game store is the first step you have to take. Since each aspect of your business will get affected by your plan, therefore, it is necessary to write a business plan for video game store effectively. If you are looking for an easy yet cost-effective business startup, the video game store business can be a great choice.
Although this venture is relatively easy, you still need professional business plan experts to make the best business plan. The Game Garage video game store will provide a thrilling and real gaming experience mainly for the youth and adults accustomed to games. You can use the following document for help or refer to a business plan for farmers market or a related business to get the ball rolling.
Executive Summary
2.1 The Business
The Game Garage video game store will be a video game store located in an emergent community in Los Angeles, California. After conducting a market survey and feasibility studies, we concluded that Baldwin Park, Los Angeles, is the right location to launch our video game store business plan. According to our video games store business plan, we will equip our gaming outlet with numerous facilities. Furthermore, apart from providing video games and related products at affordable prices, we will ensure that our customer care services are second to none in the whole of Los Angeles.
2.2 Management of Video Store Business
The owner of The Game Garage will be Mr. Helery. He has extensive experience working in managerial positions in various video game stores. Being an experienced person, he will soon be able to drive his business towards success.
In this business plan to start your own video rental store , we’re providing all the details of ecommerce startup business plan to help you devise a plan for your startup.
2.3 Customers of Video Store Business
Our potential and recurring customers are identified as follows:
- Young Professionals
- Children
- College Students
- Other Video Game Stores
2.4 Business Target
The target of The Game Garage is to offer a unique and unforgettable gaming experience to our customers. We will deliver our best-expected services to our game players by providing them with the best possible gaming devices, a comfortable environment, and a fair pricing model.
Our financial targets to meet for the first three years of our launch are demonstrated below:
Company Summary
3.1 Company Owner
Mr. Helery will be the owner of this video store business. Mr.Helery completed his Master’s degree in Business Administration. Previously he served in managerial positions at various games stores. However, he wished to start a video rental business of his own, and therefore, the Game Garage came into being.
3.2 Why the video store business is being started
Mr. Helery knew well that a video game shop business has an evergreen and blossoming market. Therefore, the video store business will be based on giving people, an opportunity to choose from a wide range of video games and other related products.
3.3 How the video store business will be started
Step1: Plan Everything
The main objective of any video game shop business plan is to help develop the business. And this is achieved through thorough planning. To help you plan your business, we are providing this business plan free of cost. You can use this document or a business plan for retail clothing to plan your startup.
Step2: Define the Brand
The next step in setting up the video game business is to define its brand. The business plan of this video game store will be aimed at making a brand that people can trust.
Step3: Establish Your Corporate Office
To start the video game store, Mr. Helery decided to rent out a three-room shop and procure the equipment and furniture.
Step4: Establish a Web Presence
Nowadays, most people search for a service online to read reviews and get a basic overview. Thus, to attract a wider audience, Mr. Helery has decided to make a page on social media platforms and develop a website.
Step5: Promote and Market
Even before the physical establishment of a business, the most important thing is its marketing. It is important to tell people that you exist. Marketing promotes aspects that make you different from your competitors. Thus, the store will utilize promotional streams such as social media to make its presence known to a greater community.
| Start-up Expenses | |
| Legal | $137,700 |
| Consultants | $0 |
| Insurance | $23,000 |
| Rent | $36,600 |
| Research and Development | $10,000 |
| Expensed Equipment | $57,800 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $268,500 |
| Start-up Assets | $288,400 |
| Cash Required | $209,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $278,000 |
| Long-term Assets | $287,000 |
| TOTAL ASSETS | $1,101,400 |
| Total Requirements | $1,369,900 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $268,500 |
| Start-up Assets to Fund | $1,101,400 |
| TOTAL FUNDING REQUIRED | $1,369,900 |
| Assets | |
| Non-cash Assets from Start-up | $1,428,800 |
| Cash Requirements from Start-up | $178,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,691,800 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $58,700 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $76,700 |
| Capital | |
| Planned Investment | $1,369,900 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,369,900 |
| Loss at Start-up (Start-up Expenses) | $245,200 |
| TOTAL CAPITAL | $1,615,100 |
| TOTAL CAPITAL AND LIABILITIES | $1,691,800 |
| Total Funding | $1,369,900 |
Services of Video Store Business
Enlisting the store services is necessary to complete a business plan. For video store business plan sample , it is important to define the services provided by the store. To decide which services you should offer, it is helpful to read the services provided by your competitors via available business plans. Reading blogs on how to start a video rental business can also help you make this decision.
Note
For video store business plan sample , it is important to define the services provided by the store.
Our video store will offer the following services:
- New games
The selling of new video games to the customers is the primary revenue stream for the business. The video games that the general public will demand will be provided to the video game store with details of authorized dealers and wholesalers. It has been anticipated by the management of the video store business that approximately 50% of the company’s revenue will come from selling new video games.
- Used games
Additionally, the video game store will also deal in old games that customers can trade and purchase. The store will use a comprehensive used game return policy that allows sellers to receive a good value for each of their used games or game consoles. For more on this, you may consult the used video game store business plan.
- Vintage video games
There has been an increase in the demand for vintage video games from the industry‘s early days. Our video games store will also sell vintage video games following the trending demand.
- Gaming Lounge
Not only can our customers buy video games from the store, but they will also be able to play video games in our gaming lounge.
Marketing Analysis of Video Store Business
Before you start your own video store , it is important to explore the trends that are going on. The market analysis done by you should investigate the relationship between the supply and demand of the products. In this video store business plan we will provide some segments from the marketing analysis of Game Garage. This video game store business plan template will help you understand your target market thoroughly. For a better understanding of how pricing trends and customer expectations are measured, you can also visit gift shop business plan.
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5.1 Market Trends
Due to the increasing trend of video games, the industry has a market share of around $86 billion. If the video rental store business plans are written after carefully analyzing the financial and marketing information, then the video stores can turn into big success stories. Therefore, it is good to invest in an industry with more than 2.7 million users worldwide.
5.2 Marketing Segmentation
As per the industry business plan, the potential customers of The Game Garage Video store are divided into the following groups:
Business plan for investors
5.2.1 Young Professionals
Young professional players spend their maximum time playing games to get rid of the stress of their working routines. These young professional gamers have a great interest in up-to-date video games, so they are expected to have a considerable presence in our store.
5.2.2 Children
Children prove to be avid gamers. And considering that trend, we expect to receive regular visits from children as well, especially from those who are between the ages of 10 and 15.
5.2.3 College students
College and high school students also contribute to increasing video gaming stores’ revenue. Their spending power may be less than our first group but they are still expected to make a significant portion of our revenues. It is because they are not tightly bound with their routines and can visit us more frequently than all other customer groups.
5.2.4 Other Video Game Stores
The final set of our customers will be the video game stores that want to procure inventory from us. As we will store new games in high demand, we expect to often receive these customers.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Young Professionals | 27% | 27,800 | 33,360 | 40,032 | 48,038 | 57,646 | 10.00% |
| Children | 28% | 22,700 | 27,240 | 32,688 | 39,226 | 47,071 | 10.00% |
| College Students | 25% | 24,360 | 29,232 | 35,078 | 42,094 | 50,513 | 10.00% |
| Other Stores | 20% | 21,100 | 25,320 | 30,384 | 36,461 | 43,753 | 11.00% |
| Total | 100% | 95,960 | 115,152 | 138,182 | 165,819 | 198,983 | 10% |
5.3 Business Target
We will try to focus our efforts to achieve the following targets:
- To gain and sustain a CSAT score of more than 95%.
- To generate enough revenue from the company to earn a profit of more than $40.4k a month on average by the end of the third year.
- To extend our services to at least three states within the first three years.
5.4 Product Pricing
To capture the market at the start, we will keep our charges the lowest possible. In addition, our video game store will ensure that the prices of all the video games and accessories available in our store are competitive with those that are obtainable from other video game stores.
Marketing Strategy of video store business
Now that you are familiar with how to build a video game store business, the next step is to develop practical marketing strategies for your store. This is one of the essential parts of a video store business marketing plan. The video game business plan template for Game Garage will help you understand the marketing trends and targeted customers.
Though this video store sample business plan provides the competitive analysis and sales strategy in detail, it is still advisable to study a few more business plans such as a butcher shop business plan to have even greater insight.
6.1 Competitive Analysis
- Our store will aim to hire the most competent and top-ranking professionals with extensive experience in their respective fields.
- Our video store believes in a combined effort. Our experts will have in-depth conversations with the customers/ clients to provide their desired video game products and provide top-class services.
- Under our particular training program, we will provide special training to our executives and employees.
6.2 Sales Strategy
- We will use online channels like Facebook ads, YouTube, and Google to boost our sales.
- We will create a strong presence on all online channels.
- We will offer a 20% discount on all our services for the first three months.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| New Games | 5,000 | 5,300 | 5,618 |
| Used Games | 6,000 | 6,360 | 6,742 |
| Vintage Games | 6,500 | 6,890 | 7,303 |
| Gaming Lounge | 1,500 | 1,590 | 1,685 |
| TOTAL UNIT SALES | 19,000 | 20,140 | 21,348 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| New Games | $60.00 | $69.60 | $80.74 |
| Used Games | $50.00 | $58.00 | $67.28 |
| Vintage Games | $100.00 | $116.00 | $134.56 |
| Gaming Lounge | $200.00 | $232.00 | $269.12 |
| Sales | |||
| New Games | $300,000.00 | $368,880.00 | $453,574.85 |
| Used Games | $300,000.00 | $368,880.00 | $453,574.85 |
| Vintage Games | $650,000.00 | $799,240.00 | $982,745.50 |
| Gaming Lounge | $300,000.00 | $368,880.00 | $453,574.85 |
| TOTAL SALES | $1,550,000.00 | $1,905,880.00 | $2,343,470.05 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| New Games | $20.00 | $22.00 | $23.10 |
| Used Games | $15.00 | $16.50 | $17.33 |
| Vintage Games | $35.00 | $38.50 | $40.43 |
| Gaming Lounge | $100.00 | $110.00 | $115.50 |
| Direct Cost of Sales | |||
| New Games | $100,000.00 | $116,600.00 | $129,775.80 |
| Used Games | $90,000.00 | $104,940.00 | $116,798.22 |
| Vintage Games | $227,500.00 | $265,265.00 | $295,239.95 |
| Gaming Lounge | $150,000.00 | $174,900.00 | $194,663.70 |
| Subtotal Direct Cost of Sales | $567,500.00 | $661,705.00 | $736,477.67 |
Personnel plan of video game store
The list of people needed to start a video game store business must be included in your business plan video store. When you search for how to open a movie rental store you should identify the major task and personnel required to perform those tasks. If you want to know how to keep your staff motivated and productive throughout the year, you can see some tips in this bridal store business plan. The list of required employees to start Game Garage is given below.
7.1 Company Staff
- 1 General Manager to help direct the business
- 1 Sale and Marketing Manager to increase sales of the store
- 2 Merchandise Managers to manage market visits and vendor relations
- 2 Store Managers to manage the daily activities of the store
- 1 Accountant/ Cashier to manage the monetary activities of the store
- 1 Receptionist to receive calls for video game purchasing
- 2 Cleaners
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| General Manager | $40,000 | $44,000 | $48,400 |
| Sale/ Marketing Manager | $35,000 | $38,500 | $42,350 |
| Merchandise Manager | $60,000 | $66,000 | $72,600 |
| Store Managers | $60,000 | $66,000 | $72,600 |
| Accountant | $25,000 | $27,500 | $30,250 |
| Receptionist | $25,000 | $27,500 | $30,250 |
| Cleaners | $40,000 | $44,000 | $48,400 |
| Total Salaries | $285,000 | $313,500 | $344,850 |
Financial Plan of video store business
A financial plan should entail cash in-flows and outflows of your business for at least three years. In this sample business plan for video store, we are providing the financial plan of Game Garage. Through this financial plan, you can learn how to turn every cent of your investment into huge revenue. Only by following an accurate financial plan can you ensure that your business doesn’t go into a loss and ends up as a video rental store for sale.
For a greater and in-depth knowledge of financial statements, you should also study a few more business plans like a business plan for jewelry business. If you lack the knowledge and expertise in the field, then it is advisable to hire a financial analyst to do the job for you.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $1,550,000 | $1,905,880 | $2,343,470 |
| Direct Cost of Sales | $567,500 | $661,705 | $736,478 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $567,500 | $661,705 | $736,478 |
| Gross Margin | $982,500 | $1,244,175 | $1,606,992 |
| Gross Margin % | 63.39% | 65.28% | 68.57% |
| Expenses | |||
| Payroll | $285,000 | $313,500 | $344,850 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $464,200 | $496,950 | $538,750 |
| Profit Before Interest and Taxes | $518,300 | $747,225 | $1,068,242 |
| EBITDA | $518,300 | $747,225 | $1,068,242 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $103,660 | $149,445 | $213,648 |
| Net Profit | $414,640 | $597,780 | $854,594 |
| Net Profit/Sales | 26.75% | 31.37% | 36.47% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ’S
- How to start a video store business?
Starting a video rental store involves developing a business plan to define the brand, establish your store, establish a web presence, and promote and market your brand.
- How to open a video rental store?
Opening a movie rental store involves the following steps: determine your niche, assess your competitors and finances, build marketing plans and strategies, set up your business goals, and invest in your company.
Download Video Store Business Plan Template in pdf
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