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Old 01-12-2008, 11:05 AM #1
SplatzMaine
 
 
Join Date: Nov 2007
thinking of opening a new store or field?

There are a ton of people asking for basic information on how to open a field, or how they have a great idea about a new paintball business so I thought I would throw out a few thoughts and comments:

I've owned MANY paintball fields and stores, many other businesses and I work as a business broker so I have quite a bit of experience to draw from.

Think about this...rather than open a new paintball field/store how about buying an existing one?

In general, buying an existing business you benefit from:

1. existing cash flow
2. customer base
3. market share
4. operations and systems

and you automatically get rid of a market competitor.

Opening a new business, you

1. add to an already diluted market,
2. have to build up both customers and cash flow
3. make the beginning missteps that all new owners encounter

New paintball businesses(in general) try to capture market share and compete through price. That in turn depresses market pricing and price integrity and reduces margins for all operators.

Thus you could end up with two(or more) paintball businesses in the same market in a pricing death spiral, sharing the same customer base with even lower margins. that sounds like fun doesn't it? I see it ALL the time across all industries but even more so in paintball. Why? inexperienced operators, low cost of entry, low barriers to entry and lifestyle drivers.

Buying an existing business is much less risky than a new start up. period.

Look for a struggling business or a burnt out store owner. You may be able to buy a store A LOT less than the cost of starting up a new store and eliminate the risk of competition at the same time.

If you buy the non-obsolescent inventory at 80% of cost, the displays and lease hold improvements at cost less depreciation and you are buying a customer data base and traffic flow along with existing cash flow then you can take all of those saving and put it into advertising, improvements and inventory. Since you have existing cash flow and customers you save the business ramp up deficit AND you save on customer acquisition cost.

When you think about it, it's pretty common sensical, and yet, everyone always wants to open a new store and put the "other guy" out of business. Good luck.
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Old 01-12-2008, 11:44 AM #2
vtdawg404
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I agree with most everything you have said. In my area, for example, the store that is here is part of a chain of about 4 other stores and they would not sell it. So it's either new store or no store.
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Old 01-12-2008, 12:29 PM #3
Horizon
 
 
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Quote:
Originally Posted by SplatzMaine View Post
There are a ton of people asking for basic information on how to open a field, or how they have a great idea about a new paintball business so I thought I would throw out a few thoughts and comments:

I've owned MANY paintball fields and stores, many other businesses and I work as a business broker so I have quite a bit of experience to draw from.

Think about this...rather than open a new paintball field/store how about buying an existing one?

In general, buying an existing business you benefit from:

1. existing cash flow
2. customer base
3. market share
4. operations and systems

and you automatically get rid of a market competitor.

Opening a new business, you

1. add to an already diluted market,
2. have to build up both customers and cash flow
3. make the beginning missteps that all new owners encounter

New paintball businesses(in general) try to capture market share and compete through price. That in turn depresses market pricing and price integrity and reduces margins for all operators.

Thus you could end up with two(or more) paintball businesses in the same market in a pricing death spiral, sharing the same customer base with even lower margins. that sounds like fun doesn't it? I see it ALL the time across all industries but even more so in paintball. Why? inexperienced operators, low cost of entry, low barriers to entry and lifestyle drivers.

Buying an existing business is much less risky than a new start up. period.

Look for a struggling business or a burnt out store owner. You may be able to buy a store A LOT less than the cost of starting up a new store and eliminate the risk of competition at the same time.

If you buy the non-obsolescent inventory at 80% of cost, the displays and lease hold improvements at cost less depreciation and you are buying a customer data base and traffic flow along with existing cash flow then you can take all of those saving and put it into advertising, improvements and inventory. Since you have existing cash flow and customers you save the business ramp up deficit AND you save on customer acquisition cost.

When you think about it, it's pretty common sensical, and yet, everyone always wants to open a new store and put the "other guy" out of business. Good luck.
Great post. It all makes sense. Take your savings and improve on the existing infrastructure. For a field for instance, if you buy a struggling/failing field, you will get it for far less than it would cost you to start from scratch. Then you replace/repair the things that people don't like and add on to that with some new improvements. As long as you then, from the time you take over, run the field professionally, not only will you keep the existing customers, you will attract many new ones. Regular paintball players hang out in a fairly small community. Word will get out that ABC field is under new management and is making big improvements. Newbies will never have known the old field, so your new professionally run field will start building that side of the business as well. Thanks SplatzMaine

Quote:
Originally Posted by vtdawg404 View Post
I agree with most everything you have said. In my area, for example, the store that is here is part of a chain of about 4 other stores and they would not sell it. So it's either new store or no store.
Competing against a store that is part of a chain is that much more difficult. An owner that owns four stores, can afford to take a loss on the one you are competing against by propping it up with the sales of the other three. That's why big chain stores can put mom and pop stores out of business so easily if they choose to do so.
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Old 01-12-2008, 01:23 PM #4
mike2468
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The only problem I see with purchasing an existing store is if the store has a bad reputation. If they do, you will have to work very hard to change people's opinion about the store. It can take awhile to repair the damaged reputation. Unhappy customers are more likely to share their experience than happy customers.
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Old 12-20-2010, 01:17 PM #5
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and not to mention if the store is up for sale it is probably not making money.....
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Old 12-20-2010, 01:54 PM #6
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And you realize this is a thread that is 2 years old?? And everything is for sale. Mine makes money and is for sale. My Scuba shop is for sale, my house is for sale, Kee is for sale... It just takes the right offer... but every business has a number.
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Old 12-20-2010, 02:54 PM #7
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And you realize this is a thread that is 2 years old?? ...........
and on that keen note of awareness:

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