[AMA] I'm a small business owner - Ask Me Anything!

justinh93 on 10/10/2017 - 18:09
Last edited 12/10/2017 - 10:40 by 1 other user

Hi Ozbargainers!

I've noticed a few threads about starting out restaurants and other businesses, given how much this community has helped my businesses I thought I would start an AMA to see if I can help anyone who has questions about starting or running a business.

A little background: We started our business career with an e-commerce store Gameology about 5 years ago and since then, have also spent the last 2 years with ventures in the hospitality industry Pokéd. Both businesses are still in their growth phases, and continue to provide us with lessons every day.

Prior to starting the businesses, I used to be an accountant, and my business partners also come from professional backgrounds; specifically, dentistry and management consulting. My intention here is not to provide advice (financial or otherwise), but to see if any of our stories or experiences may provide an interesting perspective on a problem or question you might have.

Cheers,

Justin

Feel free to connect with us on Linkedin, we would love to see what exciting things you are up to. Justin, Sam and John

Come say hi to me in person at our new store opening in 2 weeks! Happy to talk through any ideas you may have!

Follow our lessons and see if/when we make it.

Introduce Yourself

closed Comments

  • John Kimble on 10/10/2017 - 18:19
    +1

    How long do you think the poke bowl fad/craze will last?

    • justinh93 on 10/10/2017 - 19:12
      +7

      Hi John,

      We think that this is a trend rather than a fad. People are moving towards healthier options and the product has attracted many repeat customers. We won’t know until the fat lady sings but if we can turn it into a habit we think that there is a place in the market for fresh Hawaiian food. We see similarities to the adoption of Mexican cuisine in the Australian market.

      Justin

      • adante on 12/10/2017 - 09:01

        What is the difference between a trend and a fad?

        I was originally thinking a trend is more a long term pattern shift that is sustainable, while a fad is a momentary shift that will eventually be replaced. But trends are often replaced by other trends so they seem similar. But as you seem to be business types I'd be interested in your interpretation and what the implications are for your businesses

        • justinh93 on 13/10/2017 - 11:48

          I think both fads and trends have life cycles and almost everything will be replaced by something better at some point if they don't innovate and stay ahead of the competition.

          If you think of sushi rolls, at some stage they would have started as a trend and its still going. I think it comes down to how long its popular for. We think that we can keep our product relevant and hopefully it will last for a long time.

  • hell0 on 10/10/2017 - 18:34

    As the game store part of the business. How do you strike a balance between getting customers in the door and being specialists in your field… ie, for best prices, customers often will just head to Big W etc but for in-depth knowledge/products you would be the go-to. Do you aim, at the Big W type customers?

    Also, how much theft do you think has happened in your businesses in a year? I can imagine its really low but even in a small store do you think custoemrs try and steal knowing that the person behind the counter is the one they would be directly stealing from? This is also a question for your food-business too as I am a keen watcher of Mystery Diners and I see there are so many ways for customers & staff to cheat the owners.

    • justinh93 on 10/10/2017 - 20:58
      +1

      Hi Hell0
      We don’t think that being a specialist and offering the best prices are mutually exclusive. We are customer centric AND we aim to offer the best prices possible.

      We had an incident where we discovered a group who regularly came to our showroom to steal Pokémon cards. Once we discovered this we implemented systems to prevent this happening (I.e. extra staff, security cameras).

      It is harder in hospitality because there are more transactions. We have been lucky that this hasn’t been a major problem for us. We place a lot of trust in our team and have found that they often live up to our expectations. That being said we do get variances and have systems and processes to ensure that they are addressed.

      Justin

  • mskeggs on 10/10/2017 - 18:37

    How did you fund these businesses, and assuming you work in them, how have you managed transitioning from high income careers to retailing/food?

    • justinh93 on 10/10/2017 - 20:59
      +15

      Hi Mskeggs,

      John and I actually started off with 2k each. We were on holidays in Thailand and came across some really cute couple pillow cases. The ones where you have the male stick figure throwing a plane and the female stick figure catching it. We spent about 1.5k on them and then stacked all our friends suitcases with these pillowcases. From there we used the remaining 2k to purchase more product from alibaba. Think jewelry and toys, then we stumbled across the board game category and have specialized in that since.

      We then used the profits/wages from that to start our food business. We haven’t really taken much money out of any of our businesses over the last 5 years as we still live with our parents.

      It has been hard transitioning from having a regular income to none. We eat out less and we find enjoyment from things that don’t cost money. That being said we are having enormous amounts of fun!

      Justin

      • KevinFine on 12/10/2017 - 06:45

        Thanks Justin,
        I have been trying to get this way of thinking into my 19 yo. Just does not see that living with parents is a huge launchpad for anything they might want to venture into. And as the years tick by one is 30 and very little is on the achievement list.

        • justinh93 on 12/10/2017 - 07:38
          +3

          No Worries! I am really grateful that my parent allow me to still live with them as it has allowed me to pursue what I want to do. With the pressures of rent and having to do all the housework myself it would be quite difficult.

          For me it was a break up with my long term gf that got me into business, but you are right there is no time like 19 to go all in and chase your dreams! Happy to have a chat with them if they are keen on business.

      • Aceboy884 on 14/10/2017 - 13:03

        This reminds me when I first started back in high school

        I stakes a suitcase worth of av splitters . Remember the old days when tv had three cables?

  • Broke-Ken on 10/10/2017 - 18:42

    Hi Justin, thanks for doing this AMA

    My questions is, did you keep your day job while starting the ecom business or dived right in? if you were doing both at the start, at which point did you decide to quit your day job?

    • justinh93 on 10/10/2017 - 21:00
      +9

      Hi Cityend,

      Great question!

      I never advise people to quit their day job to start a business. I was working full time at PwC when we started Gameology and also studying part time. The business was a hobby for me. Everyone has this perception that business is a full time job, but in reality its usually not. That is unless you are opening a restaurant. Lol.

      I think the point when someone leaves their day job for their business is and should be different for every person. I still live at home, I don’t have kids and have no requirement for a stable income. I didn’t have much to lose. Instead of quitting I took a leave of absence (unpaid leave) from PwC for 12 months so if things did not go to plan I could go back to an awesome workplace.

      Justin

      • dealman on 11/10/2017 - 19:12

        Both businesses are still in their growth phases,

        Mate thanks for sharing, does this mean, still pre revenue or not big enough to take a salary ?

        We've got projects in the pipeline too, always think is this a growth phase or am I fooling myself.

        • justinh93 on 12/10/2017 - 07:41
          +1

          No worries!

          We are not prerevenue, but we haven't taken a lot of the business. If we slowed down the growth we can definitely take out a salary.

          I know exactly what you are feeeling and I still ask my partners if these businesses are actually worth anything or it's just perception. I think if you are pre-revenue you should really get your product out or the market ASAP to test your MVP and then refine it. Have a read of the lean start up.

  • John on 10/10/2017 - 18:48

    How much money did you spend on startup (and whether its combined with other party)? How much proportion was borrowed and how much was from yourself?

    • justinh93 on 10/10/2017 - 21:19
      +1

      Hi John,

      We did not spend much to startour ecommerce business <5k.

      Pokéd was more capital intensive but we started with around 100k in savings between the partners. This is considerably lower than industry standard but we had contacts and experience through our first hospitality venture (Scroll Ice Cream). We try to avoid debt where possible.

      Justin

  • [Deactivated] on 10/10/2017 - 19:06

    what's your personal opinion on what a small business is worth based on gross or net return.

    • justinh93 on 11/10/2017 - 16:53

      Hi RowdyAlpha,

      I think it depends on your industry and the buyer. In hospitality it typically goes from 2-12x earnings before interest and tax.

      We usually work off 4-6, when we look at businesses, but we definitely base it off EBITA (net return).

      Justin

    • samk92 on 11/10/2017 - 17:09
      +6

      Hi RowdyAlpha,

      Sam here (Justin's business partner).

      We like using Warren Buffett's approach to understanding business value:
      "A bird in the hand is worth two in the bush."

      To flesh out this principle, you must answer only three questions.

      1. How certain are you that there are indeed birds in the bush? (probability of success)
      2. When will they emerge and how many will there be? (timing and quantity)
      3. What is the risk-free interest rate (which we consider to be the yield on long-term U.S. bonds)? (opportunity cost of capital)

      I've written up an example here that you might find useful.
      http://www.whenwemakeit.com/home-1/2017/1/21/thinking-about-…

      There are intricacies that are unique to small businesses to keep in mind as well (e.g. founder risk, corporate structure etc.).

      Hope that helps,
      Sam

  • PJC on 10/10/2017 - 19:13
    +1

    OP perhaps amend title to I'm A Small Business Owner.

    • hell0 on 10/10/2017 - 19:15
      +1

      I don't know, I think either is correct.

      I'm a small business owner
      I'm a small business business owner

      • justinh93 on 10/10/2017 - 19:22
        +1

        Thanks guys! Updated.

    • justinh93 on 10/10/2017 - 23:00
      +1

      Good pick up.

  • tannyboy on 10/10/2017 - 19:18
    +1

    More on Poked itself… when's the 360 Collins store opening :) (save me the walk, i work in the building)

    More on the business side.. When did you realise that the day-to-day was no longer for you.

    • justinh93 on 10/10/2017 - 21:20

      Hi Tannyboy,

      Thank you for supporting us! The grand opening is on the 26th October. We will have a soft opening a couple of days before.

      I don’t think the day to day is not for me. If an exciting opportunity came along I would definitely consider it. Running a business usually sounds sexier than it is. The grass is often greener on the other side.

      That being said we love what we are doing.

      Justin

  • MathNerd on 10/10/2017 - 20:17
    +4

    Hi Justin!

    Firstly, well done on the 2 successful businesses! I see you're enjoying the fruits of your hard work :)

    My question relates to the cost of acceptance of cards, I'm a bit addicted to everything payment network related, especially AmEx. Is the cost of AmEx really as high as people say it is (assuming you accept it, of course!)? Figures from an actual business owner are much better than people who haven't been in business.

    I don't think I'll ever own my own business, but these questions pique my interest and I'd love to hear what the case is for you.

    Cheers!

    • justinh93 on 10/10/2017 - 21:25
      +1

      Hi Mathnerd!

      Thank you for the kind comments!

      I know what you mean! You have to speak to my business partner John, he is a whizz with maximising points. With regards to the actual cost, the price difference varies depending on the size of the transaction and what volume the business does. For us the difference is around 1%. This can make quite a difference on profitability. We have been tossing up with whether to accept Amex or not for a while.

      Happy to answer any other questions you might have.

      Cheers

      Justin

      • MathNerd on 10/10/2017 - 22:24

        Thanks for that Justin :)
        While I love using my AmEx wherever I shop, especially small businesses where I can see the owner working really hard to support the business, I do wonder how much my points-chasing is costing them.
        So you don't currently accept AmEx at your shopfronts, is that correct?
        I must say, I do subconsciously seek out shops that do accept it, and tend to frequent those shops (case in point, my local pizza, fish 'n' chips, dumplings and kebab takeaway shops all get massive repeat business from me). I love seeing the blue logo next to the door of the shop :)

        Cheers

        • justinh93 on 10/10/2017 - 23:08
          +1

          We don't currently accept Amex at Pokéd but we do on our website through Paypal. At the end of the day its the business choice so if they are willing to accept it than they obviously see the value in it.

          Thats really helpful feedback. We have been trying to work out whether it is worth us accepting Amex, the fact that you are seeking out the logo is very interesting.

          You must be having heaps of business class flights. :P

        • MathNerd on 10/10/2017 - 23:14

          @justinh93: You're right Justin, I even have pictures on my phone that I've taken simply of the logo next to the door. 2 weeks ago I was in Central Australia (Alice springs etc) and Darwin, and even places out in the outback/bush had the logo, and I couldn't help but take pictures of these :p
          In terms of business class flightsz sadly I haven't redeemed any of my points, I only started collecting them this year so it'll be a while before I can get to an amount that's redeemable! That dream First class flight is just on the horizon but I wouldn't mind it coming just that bit sooner! ;)

        • justinh93 on 10/10/2017 - 23:43

          @MathNerd: I wonder how many people are soo dedicated! It's like a bug though haha. Soo much fun!

          You should refer all your friends and family to get the 100k bonus cards! You will have business class tickets in no time!

        • MathNerd on 11/10/2017 - 08:17

          @justinh93: you're right it is a bug! I'm sure there's plenty of people (concentrated on this site in fact) that'll be similar, it is really addicting stuff!
          Yup, done a few referrals already and clocked up some decent bonus points already :)
          Thanks again for your insight mate, much appreciated :)

        • justinh93 on 11/10/2017 - 11:50

          @MathNerd:

          That's awesome! Anytime mate :)

        • Stoozer on 11/10/2017 - 20:47
          +2

          @justinh93:

          Why not give Amex a chance next year

          Set up as an Amex merchant, make sure you have at least one Amex transaction between 1st June 2018 and 31st August 2018. Keep your Amex transactions below $1.3 million for the 12 months prior to 1st November 2018.

          The increased revenue during the November shop small promotion should more than cover your costs to accept Amex for the whole year.

          Make it easy for your customers to spend $20. Lots od deals for exactly $20.

          Set up a few ipads in your business and encourage your customers to enrol their cards to the shop small promotion before they pay.

        • justinh93 on 11/10/2017 - 22:29

          @Creditcardking:

          I am not sure I follow what you are saying. Is there a link to this promotion?

          Thank you in advance!

        • 86boy on 12/10/2017 - 10:23

          @justinh93:

          He is talking about the Shop Small promo, where AMEX gives cashback.

          I'll try sort it out.

        • [Deactivated] on 12/10/2017 - 17:34

          As someone who owns a franchise, the reason for not taking Amex is primarly because it's a pain in the ass when trying to process the payments through MYOB.
          Their fees are also atrocious. They are apparently reducing fees soon but not enough in my opinion.

          But yeah, they are not business friendly by any means.

          Our business has almost $3 million turnover, with over 50% of transactions being via credit card.
          The no Amex policy probably costs us less then a single sale a day in a super high volume store.

          As mentioned by others, people just always bring their visa or mastercard with them for backup.

        • MathNerd on 12/10/2017 - 17:37
          +1

          @murphy84: Oh, that's interesting! They invest so heavily in marketing and getting the word out there, regarding their "world class" customer service etc, which I've found to be true in my dealings with them. This is what makes me want to use their cards more too, they always have my back.
          Disappointing though to hear that on the other side (merchants that is), they're not as good. I wonder why the discrepancy? After all, businesses that accept the card allow customers to use the card which allows AmEx to continue to profit!

        • [Deactivated] on 12/10/2017 - 17:40

          @MathNerd:

          yes, very customer focused. Interesting strategy in Australia considering the costs of running a business here are so much higher than most of their other major markets.
          They're still learning though and their fees will come down and subsequently the rewards probably will too :)

        • MathNerd on 12/10/2017 - 17:42

          @murphy84: Good to hear the fees will be coming down, but not good to hear the rewards are :( I hope this doesn't eventuate! They'll cop a pretty bad backlash if so!

      • Stoozer on 11/10/2017 - 09:25

        If a business does not accept Amex they wont have me as a customer.

        • justinh93 on 11/10/2017 - 11:49
          +1

          Given your username I totally get it! I love using Amex to. Do you still keep a visa or mastercard with you though?

        • Stoozer on 11/10/2017 - 21:52
          +1

          @justinh93:

          I buy prepaid visa cards with my Amex just incase Amex is not accepted.

        • justinh93 on 11/10/2017 - 22:29

          @Creditcardking:

          Thats just awesome! What a great idea.

        • Stoozer on 11/10/2017 - 23:36

          @justinh93:

          If a customer wants to pay their $400 bill split over 20 Amex cards during the shop small promotion just smile and thank them for their support rather than complaining how long it will take to process the transactions.

        • justinh93 on 11/10/2017 - 23:56
          +3

          @Creditcardking: we are always grateful to our customers and would love to help them save as much as possible. Net gain considerably outweighs the transaction time.

        • ozhunter on 12/10/2017 - 01:39

          Lol, funny as your next comment says "I buy prepaid visa cards with my Amex just incase Amex is not accepted.

          "

        • Stoozer on 12/10/2017 - 09:41

          @ozhunter: there are some cases such as car rego where i can't pay with Amex so i buy the prepaid visa cards to pay.

        • 86boy on 12/10/2017 - 10:24

          @Creditcardking What do you do with your points?

        • leiiv on 12/10/2017 - 16:15

          Won't it (buying a prepaid visa card) be considered as a cash advance?

        • [Deactivated] on 12/10/2017 - 17:58

          You are limiting yourself and paying more money overall to get points.
          Think twice about your personal policy.

        • Stoozer on 14/10/2017 - 22:47

          @86boy:
          Mostly premium flights but i did transfer to SPG recently for a hotel booking. I prefer to keep the cost of a point 1c or below.

          I was tempted with this deal, Amex to SPG to Marriott.

          http://www.marriott.com/rewards/usepoints/morepack.mi

    • 86boy on 12/10/2017 - 10:32
      +2

      Hi MathNerd

      I am also addicted to AmEx points - I don't know why.

      It is definitely higher than VISA/Master - almost double, depending on your industry.
      You'll find hard to find a payment gateway that does not charge extra for AmEx.
      Figure wise - usually 2%+
      They are trying to lower it for small businesses but it still would not be as low as the other cards.
      Taking credit card in itself is costing the business money - but everyone uses it so we can't say no. But not everyone has an AMEX card and we don't see it as necessary to cater for that market as I believe anyone who has an AMEX card will also have a VISA/MC.

      Cheers,
      John

      • MathNerd on 12/10/2017 - 10:51

        Thanks John - that's very helpful insight.
        Have you ever had a customer say "Oh damn, you don't take AmEx? What a shame! I'd be here everyday if you did!", or do they just go "ah well, I'll use my MC/VISA then"?
        I guess if you did have that happen quite often then you can do a Cost/Benefit analysis, at least for CBD stores you'll get quite a few wanting to use AmEx, but for outer suburb stores you wouldn't get much usage at all. I know that my local takeaway shops (I live in Cranbourne, which is almost regional Melbourne) probably have only myself as an AmEx customer but I give them enough business to keep going with it :) I just don't see any AmEx's being flashed around Cranbourne shops, or maybe I'm just not vigilant enough :P

        • 86boy on 12/10/2017 - 10:58

          Out of interest, what do you do with your points?

          Most customers just say they'll use VISA instead. Personally when i get denied my AMEX i just use VISA that earns FF anyway. I think you would be part of a small percentage of people that would actually not go to a store for the pure sake of them not taking AMEX. I think the vast majority will think - If they have something I want, at a price I am willing to pay - the payment method is negligible unless it is inconvenient.

        • illumination on 12/10/2017 - 10:58
          +1

          MathNerd,

          To be honest I think the non-acceptance of AMEX as has been pointed out above is relatively common, because there's the perception that those with an AMEX will also have a Visa/MC (and will likely just choose to pay with Visa/MC).

          In addition, we (point nerds) are the relative minority so I can understand from a business point of view as to why they wouldn't accept AMEX if it costs them that much more to accept it. It does kinda make me think what the motivation to accept AMEX is from the places that do accept it though..

          But I'll leave it to them to answer the question more properly :P

          edit: Beaten

        • MathNerd on 12/10/2017 - 14:20

          @86boy: Good points John.

          Personally I'm saving up my points to get award First Class seats on flights for my partner's and my honeymoon, after when we eventually get married. I've never traveled up the pointy end of the plane and I'd love to experience it, especially for something as big as a honeymoon.

          I can't fathom the cost of paying cash for a first class flight, so my intention is to use points for this purpose. Might as well get rewarded for everyday spend (groceries, fuel, bills, restaurants, etc, just spend required to live day-to-day).

          I am worried, however, that availability will be a concern, worst case scenario is I have this massive bank of points but there's no award seats available to redeem those points. That'd be my nightmare, after years of saving points.
          I haven't booked an award seat yet so am a newbie to it, but hopefully it all works out in the end. I do try and read Point Hacks/Australian Frequent Flyer/Australian Business Traveller forums every now and then, the people there do this stuff every day.

          There are quite a few stores though that sell product that's unique or their product is so much better than their competitors, but they don't take AmEx or don't even take credit cards. I still go to stores like this, as what they offer is better to me than my chase for points. I'm sure Pokéd will fit into this category as you have a unique product, so the fact you don't accept AmEx wouldn't bother me.

          Hopefully this is all worthit in the end when it matters!

        • 86boy on 12/10/2017 - 21:34
          +1

          @MathNerd:
          That's fantastic!

          I have redeemed first class flights in the past and i think it was an easy process. It works in the favour that people mainly want business class flights rather than first class. All the best for your savings, I envy your partner!

          Let me know when you get there / need help with redemption. Happy to help!

        • MathNerd on 13/10/2017 - 12:02

          @86boy: Thanks John for the offer, I'll certainly ask when the time comes. Cheers for all your super helpful and insightful replies and comments :)

      • rave75 on 12/10/2017 - 11:21

        The place I work only get charged 1.2% by Amex to process transactions, it is even lower than CBA's 1.5%

        • MathNerd on 12/10/2017 - 14:22

          If you don't mind saying, where is this that you work? Or even the industry (retail, restaurant, florist, etc)? That's a very good rate!

        • rave75 on 12/10/2017 - 14:52

          @MathNerd:

          Light manufacturing. We used to get charged around 2 percent but suddenly one day, Amex rep came and said they can give us 1.2%. Meanwhile until January 2016

        • MathNerd on 12/10/2017 - 16:42

          @rave75: Wow, they have reps that go to shops and promote them? That's amazing!

  • tomsco on 10/10/2017 - 20:30

    Hi Justin. What is your spirit animal?

    • justinh93 on 10/10/2017 - 21:04
      +4

      Hi Tomsco,

      Meerkat

      • tomsco on 10/10/2017 - 21:36

        Haha. Thanks for answering my silly question.

        In all seriousness, congrats on your success.

        • justinh93 on 10/10/2017 - 23:01

          Thank you for the kind words! Not silly at all. You should always get to know ones spirit anaimal.

    • samk92 on 10/10/2017 - 21:18
      +1

      Hi Tomsco,

      I'm Sam, Justin's business partner (the ex-consultant).

      I've known Justin for a number of years. I think he's a butterfly; he has lots and lots of ideas.

    • theHMASfriendship on 10/10/2017 - 22:21
      +7

      Hi Tomsco,

      I'm iforgotmysocks, I read Justin's small business owner ama on ozbargain.

      I've known justin for under a minute through his responses to this thread only. I think he's a meerkat; as he said his spirit animal was a meerkat.

      • justinh93 on 10/10/2017 - 23:01

        I couldn't agree more with iforgotmysocks, besides I'm pretty sure a butterfly is an insect so irrelevant to this discussion.

  • Ughhh on 10/10/2017 - 21:28

    Would you say having experience or being educated in accountancy/finance is crucial for small start up?

    • justinh93 on 10/10/2017 - 23:20
      +3

      Hi Ughhh,

      I don't think you need have any experience in accounting/finance, but it is important to be financially literate. Being able to read a profit and loss statement and understanding the financial position of your business is very important. This will help reduce the chances of you spending beyond your means or making decisions that could jeopardise the future of the business.

      Starting work on an idea, getting organised and finding a good team is what I believe is crucial when you start up a new business.

      Justin

    • samk92 on 11/10/2017 - 17:22

      Hi Ughhh,

      We actually made some pretty bad decisions due to a lack of understanding about accounting/corporate structures for our first business. It ended up costing us a lot of money to fix afterwards.

      If we ever start another business, I'd consult an accountant first to understand how best to setup the legal entities.

      There are some finance basics that are important to know. Some off the top of my head would include: GST (and keeping money in the bank to service the liability), PAYG, understanding margins, reading reports, non-cash expenses, and profit distributions.

      Hope that helps.
      Sam

      • Ughhh on 11/10/2017 - 17:36

        Thanks to both of you for taking the time to answer the questions. I'm sure it has/will help people who are looking to start a business.

  • altomic on 10/10/2017 - 23:11
    +1

    are you a "small business owner" or a "business owner" who is small?

    • justinh93 on 10/10/2017 - 23:21
      +64

      I've started going to the gym four times a week so I can hopefully become a medium sized business owner.

      • MathNerd on 11/10/2017 - 08:18

        Most hilarious comment I've read in a while. Even scotty upvoted. Here, have a +1.

        • justinh93 on 11/10/2017 - 16:37
          +4

          It's the truth!

      • 86boy on 12/10/2017 - 09:14

        I am Justin's larger partner. I am also starting to go to the gym, hopefully downsizing from a medium to a small sized business owner.

  • born2reign on 11/10/2017 - 08:27

    With regards to buying/selling board games, how do you get around all of the licensing/copyright requirements and have confidence you aren't breaching any copyright laws?

    i.e to sell Monopoly (or any version of Monopoly) am I correct that you would need to purchase your stock from an authorized Monopoly manufacturer?

    If this is correct, how did you identify and find a reliable/reputable/trustworthy authorized manufacturers for your board games? And do they send all of the necessary paperwork with each shipment that you order?

    Or am I thinking too much and you just drop-ship directly to customers for online orders and you're not that picky on authorized manufacturers etc

    Second question, if you are not drop-shipping and you receive physical orders from overseas… how long on average would you say it takes for a shipment of games to arrive at your door? (4-6 weeks? or less).. and have/do you ever/normally have issues/delays due to customs clearance?

    This has always been questions of mine in the board game industry… Years ago I tried researching copyright laws and authorized manufacturers/distributors but didn't find the information easy to come by. Just about everything on ali baba / taobao / t-mall are copies and I would assume illegal to purchase and re-sell here in Australia without consent from the trademark owners so I was never able to get my head around these topics

    • justinh93 on 11/10/2017 - 16:49
      +2

      Hi Born2reign,

      Great question! We purchase directly from the distributors in Australia or manufacturers overseas.

      We don''t drop ship as we want to get our products to the customer as soon as possible.

      With regards to your shipping it depends where it is coming from and what method you are using to ship. We use a mixture of air and freight and we allow one week for customs clearance.

      We don't purchase our games from those sources as they are usually copies and we are able to get them through legitimate channels.

      Justin

  • decryption on 11/10/2017 - 09:00
    +3

    I've run a few businesses in the past and while customers were always happy and the concepts themselves were solid and profitable, I always, always struggle with marketing and promotion. I actually think having a marketing plan is more important than having a business plan. Do you have any advice or tips for people wanting to start a business and how they should go about telling the world about their services?

    • MathNerd on 11/10/2017 - 10:26
      +4

      Hey, you're the bloke that racked up the 380,000 FF points a while ago by buying items at supermarkets.
      You're my hero, I wish I could do something like that :P

      • justinh93 on 11/10/2017 - 16:37
        +3

        haha just follow the blue logo.

    • justinh93 on 11/10/2017 - 16:46
      +1

      Hi Decryption,

      Congratulations on your successful businesses! If your customers are happy and the concepts profitable you have an awesome business.

      Social media is the most popular and cheapest way to get found at the moment, but it really depends on your industry. I believe that the customer experience and product should do the marketing. Communities like Ozbargain are great if you have created something that gives them more value than what is currently on the market.

      Another important step is doing a lot of testing with as many people as possible. This should help you gauge how big your market will be, and what will be the best way to communicate and to acquire those customers.

      There's usually no silver bullet to getting found, but if you have a really good product and experience getting found should not be difficult. We found being patient, keeping our day jobs and growing over time is what has allowed our current businesses to get to their current stage.

      Justin

      • serpserpserp on 14/10/2017 - 19:47

        Just on social media marketing. Do you have specialist freelancers do all the photography and construction of the posts for your social media outlets? Or do you do it all yourselves?

  • CandyMan on 11/10/2017 - 13:36

    On average, how many hpurs do you spend on your business per week

    • justinh93 on 11/10/2017 - 16:40
      +2

      Hi Candyman,

      It varies from week to week. I would spend around 80 during busy weeks and 40 when its quiet. The main problem is its really hard to totally switch off. You think about it all the time and there's no set hours.

      My hours are really flexible and I can generally fit in whatever I want. Most important thing is finding something you enjoy because then you won't count the hours.

      Justin

    • samk92 on 11/10/2017 - 17:17
      +1

      Hi CandyMan,

      I'd say it averages about 35 hours a week of "productive working time", but in reality, your brain is running non-stop.

      I think I've had two or three days in the last three years where I haven't checked my business related emails or messages (I'm not complaining, because this was self-imposed; I'm enjoying what I do, and the problems I get to solve).

      This is an instance where the average is quite misleading. The hours can range between 5-10 to 80-100 depending on what is happening.

      We try and really focus on lowering the hours we work, because that's usually a sign that the business can function without us (check out the E-Myth Revisited for tips on how to do this).

      Sam

  • drillvoice on 11/10/2017 - 17:27

    Hey, I'm wondering how much utility costs, especially electricity, are an issue for you? Do you have a sense of what proportion they are of your expenses, and how recent increases have affected you? Have you thought about options to reduce your utility costs, like efficiency, or batteries? This may not apply for e-commerce but could apply for other stores.

    • justinh93 on 11/10/2017 - 21:46

      Hi Drillvoice,

      This is a very specific question… Our utilities are not a big part of our expenses, I believe under 5%. We haven't really actively pursued cutting our utility costs, it really only happens when a rep from another energy company comes and shows us a better rate.

      We have looked at solar, but that was when we were considering doing crypto mining. lol. We didn't end up going ahead with that idea though. haha

      Justin

      • sghetti on 12/10/2017 - 15:47

        Did you consider accepting crypto for purchases? If you did, what assessments did you do on the risks (value of coins crashing etc.)?

        • justinh93 on 13/10/2017 - 17:49
          +1

          Hi Ricklee,

          We have considered accepting it, although the transacting cost is quite high and don't want to complicate our business at the moment given we are expanding quite quickly. It will probably something we look at again once we have stabilised.

          If we were to take it, we wouldn't really worry too much about the fluctuations as we would view it as a speculative gamble from our end. The other option is to instantly convert it into cash which is what all the places that accept bitcoin for apartments do.

          Justin

  • dangerdanger on 11/10/2017 - 18:40
    +1

    What business structure do you use, and why?
    Limited company, with directors? Or Trust structure?

    • justinh93 on 11/10/2017 - 21:43

      Hi Dangerdanger,

      We use a mixture of trusts and companies depending on the business and the strategy.

      You should speak to an accountant as they would best understand your needs. When we first started we used a partnership, however I would recommend starting a business as a company.

      To be honest, I am not entirely sure how they all work, our accountant has been really helpful in setting this up in the right way.

      Justin

      • leiiv on 12/10/2017 - 16:25

        But you are an accountant yourself? Does it mean that you need an accountant specialised in that specific area?
        You said that the ecommerce starts with less than $5000 capital. How much does the accountant cost?

        • justinh93 on 13/10/2017 - 17:51

          No, if you are starting something basic I would just go with a company structure that doesn't need an accountant to set up.

          We didn't spend anything on the accountant at the start, we used a limited partnership which most likely wasn't the best option, but I could set it up myself. We don't usually set up companies until we are sure that its not just an idea and we will actually execute on it.

  • 50centscheaper on 11/10/2017 - 19:26

    Hi Justin,

    First of all, congratulation for the 2 successful businesses. I have a few questions in regards to your e-commerce store Gameology.

    1)why did you choose board game? Is it because it's one of the most profitable area?

    2) When Amazon starts to operate in Australia, do you think it will bring any impacts to your e-commerce store?

    3) If so, what is your plan?

    Thanks

    • justinh93 on 11/10/2017 - 21:57

      Hi 50centscheaper,

      Thank you!

      1) No, we kind of just fell into it as we were interested in games. Its definitely not one of the most profitable areas, but we have managed to get a decent amount of scale which helps.

      2) We think it will help get more people spending online and have a positive impact on our business.

      3) Sell more games!

      Justin

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