Asa Jay's weblog

Yesterday I heard from Chad Carper regarding the space next to Dominos Pizza in Airway Heights.  After several attempts to contact the representatives at Tomlinson Black Commercial, I found that Chad’s name, with Kiemle & Hagood, was recently posted on the property.  I called Chad and left a message last week, and he promptly called me back once he was back in town on Monday.   Chad’s number is 755-7572.
Chad is actually the person who found the land and helped a developer build the location.  The developer then sold it to another owner, and that owner is now trying to sell the property as well.  The current price is set at $1.3M.  That’s a bit more than I want to spend, I’m more interested in leasing a the moment which is what we talked about first.
The current space available is 3000 sq. ft. which can be divided into two spaces.  Chad told me there were no specific plans, so the space could be used as one large area, or could be leased anywhere between 1200 and 1800 sq. ft.  This location out of all the others so far, gives me the most options.  The old Premier Video was 3700 sq. ft. but there was no option to divide it. The spaces at Hayford Rd. were all pre-set, but had a varying degree of sizes.  This spot allows me the flexibility to choose something within the area my floor planning is coming up with.

The space is approximately 70 feet deep, so if I’m interested in this space I can massage my floor plans appropriately.  There are two restrooms currently installed, one for each of two space the 3000 sq. ft. can be divided into.  The lease price is $15.75 per sq. ft. per year, with $2.50 per sq. ft. triple net (taxes, insurance and common area maintenance).
There are no remodelling restrictions as long as they are approved by the building owner.  I was told I could put in a deli and a coffee bar if I wanted.  Chad mentioned I might not want to put in a grill since it would be very costly to install an overhead hood vent system.  I’ll have to keep that in mind.

As for the term, Chad said they ae negotiable, right up front.  There was no talk about a five year lease being mandatory or even preferred.  In fact, Chad told me the owners were open to providing the first three or four months FREE with the signing of a three or five year lease.   This was by far the most flexible a plan I have been approached with yet and Chad seemed very calm and open about what we could do to get my business into the building.

I must say I had the best conversation with Chad out of any of the other people I’ve talked to regarding space.  He also complimented me on my forethought of questions to ask, at one point believing I already owned or was leasing other properties.  That tells me I’ve begun to understand many of the things I need to know when it come to leasing a place.

Well, in the end, this spot falls in the mid-range of leasing cost per square foot.  However, it also has the most flexible arrangement of features so far, between space and leasing terms.  The only drawback right now is the parking available.  There are only two non-handicap spots out front, along with two handicap spots.  There is however a 17 space lot out back that was put in as part of the construction.  That just means I might need to use the back door as a valid customer entrance.  Overall, I’m really liking this spot more than any other right now.

Another thing to think about is that this space would be a good “starter” space and location.  If the business was successful and needed to grow, I could possibly expand it into the remaining space (if not leased at the time), or even move into something larger in a different location.

I was on the phone with Chad for a little over 20 minutes.  Today I need to study for a mid-term I’m taking tonight so I won’t get to the spreadsheet today, but I have enough info on leasing and locations that I can build something now.  I’ll have to work on that tomorrow.

The last option I wanted to get information on, was the idea of buying land and building.  I know that would be the greater expense so it’s probably not the best idea, but one I think I should get information on anyway.

That’s all for now.

Asa Jay

Today I was successful in contacting Vandervelt Construction to get lease informaiton on properties recently built on the Northeast corner of Hayford Rd. and Hwy 2. I talked with Jason Strain who was a very nice and patient gentleman and helped answer a lot of extra questions. The phone number I called was 467-6654 and the receptionsist forwarded me to Jason. Jason told me he does not have a direct number.

There are currently four spaces open for lease, 1178, 1229, 1448 and 1620 square feet respectively. Each leases for $18 a square foot, per year. The triple net is currently estimated at $3.25 a square foot. Again, they require a five year lease which would be increased by 12.5% in the next five year renewal. As I talked with Jason about other terms, he mentioned he was not sure, but thought the banking arrangment they had with their lender required them to lease at five year intervals. He did mention he though maybe a three year lease could be negotiated. He did not come across with any kind of pressure and really seemed to understand I was new at this and was helping provide valuable information.

From my perspective, Jason gave me some good information that could be used during lease negotiations. I could try to offer a shorter lease term with a renewal option that included an incrimental increase. Something like a one year lease with an option to renew with a 3.5% increase. I do believe this is the kind of thing Jason’s extra information would help me with.

I would be responsible for all utilities. There is at least one restroom installed in each space, with the largest space having two. Interior remodeling would be my responsibility. The only requirement is that I have any plans pre-approved prior to seeking permits from the county. When I asked about being able to put in a deli/coffee bar, I was told that Starbucks (which is a current tenant) had an exclusive agreement to supply coffe. So what I could do is still have the deli bar, but I could not advertise any specialty brand coffee, even though I could serve it.

Now that I’m thinking about it, the best thing I could do with regard to the deli/coffee bar, is to talk to the management of the Starbucks to see if I could swing some kind of deal with them. I’m not sure what kind of deal, but I need to put that at the back of my mind and noodle it for a while.

Here is a basic chart of the costs for the different sized spaces currently available:

Size Monthy Cost Triple-Net Cost

• 1178 $1767.00 $319.04
• 1229 $1843.50 $332.85
• 1448 $2172.00 $392.17
• 1620 $2430.00 $438.75

I need to get this information into a spreadsheet for comparison against other properties, and then get it posted to my Mind Map.

Time spent on the phone with Jason, approximately 15 minutes.

Asa Jay

I’ve created a Mind Map of my project and posted it here. A mind map is a visual way to put ideas down and rearrange them as necessary. It’s kind of like brainstorming with sticky notes on a whiteboard. You keep putting ideas down until you get exhausted, and the begin a process of combining similar ideas and thoughts into categories. In this case, I’m using a piece of software called Mind Manager to put the notes into. I’m able to categorize items, add notes, hyperlinks, etc. This becomes valuable as a tool becuase it organizes the different thoughts, and in my case, different information I’ve come across and applies to those thoughts.

This mind mapping application also allows me to export to html, which means I can post it on the internet and navigate it using just about any browser. This also allows me access to the information no matter where I am, as long as I have a computer handy and can get on the internet. The map on-line is arranged into two basic frames, a table of contents and a map/notes area. In the structure I have now, most of it is simple headings and maps without a lot of notes. However, there are many links to various articles and vendors I have researched so far. This helps give a person an indication of what my thought process is and where the ideas are going.

Please browse the mindmap and see how things are going.

In other news. . .

I recently got in touch with a gentleman by the name of Tim Martin. Tim founded SpokLAN, an internet gaming group that gets together to do LAN parties. A LAN party is a gathering of like-minded computer geeks, normally for the purpose playing computer games against each other or in teams against other players across the internet. I found Tim and SpokLAN through a magazine from the SBA, in and advertisement for GameFest, a computer festival of gaming held at the Spokane Interstate Fair.

Tim has agreed to meet with me sometime later this week so I can talk with him about SpokLAN and GameFest. My goal is to understand more about the demographic of games, as well as find out information on the kinds of equipment they use to host their LAN parties. Part of this is to understand what kind of equipment I would need to install in order to appeal to that demographic and lure gamers in to the internet cafe. This is of course only one type of user I’m trying to target, but this will be a good group to talk with. I’m excited about meeting with Tim.

This week I’m also going to get started reading about Break Even Analysis. This is a targeted piece given to me by Christie that I need to learn and understand. Just the name alone tells me it’s something important I’m going to need to know when I start putting all the numbers on paper. The idea of owning a business is to make money, and I need to know at what point I’ll be able to do that. I know the basics about expenses versus revenues, but in business there can be a whole lot more to it, as I understand some businesses don’t make a profit for two or more years. That could be difficult if it’s the only income for a family. So I’m dedicated to doing reading this week, besides, I need to get the book back to Christie. 🙂

I also need to work on a spreadsheet I can post on line that makes it easier to see where I’ve been spending my time. I need to account for 120 hours by the end of December, and with only a few months left, I’m starting to worry. I better get busy.

Asa Jay

This morning I ran across an article on slashdot (www.slashdot.org) which asked the question “Can a Gaming Cafe be Successful. The article is linked here:
(http://ask.slashdot.org/askslashdot/06/08/12/0056211.shtml).

Although my business focus is not strictly on gaming, one part of the plan was to be able to support gaming and encourage gamers to come in and utilize pre-positioned hardware. Feedback on the above mentioned article provided different opinions, examples, and stories of both success and failure. The overall feeling was that a gaming cafe -can- be successful. Here are some selected quotes and paraphrases:

“Springfield Mall in Fairfax County (not far from the Franconia/Springfield Metro Station), Virginia has a cyber cafe which also offers gaming on PCs and game consoles and its doing really well. They also have WiFi for people who bring in their own laptops. I’d say go for it!” (TheZorch (925979))

Another person writes about www.backspace.bz in downtown Portland OR. The place has been doing well for three years, is tied in with an art gallery and serves up tables for board gaming, console gaming, pc gaming, arcade gaming and a pool table; in addition, they are located in a swanky part of town catering to middle to high incomes. (kindlekoma (994806))

A general theme is that most gamers just want a place to hang out and be social, without having to bring their own equipment and spend time on configurations; they want to game and have fun. (Orangejesus (898961)) This person also goes on to say “. . . the gaming place I go to is open 24/7 and after 5 hours is free, (5 an hour) So it’s pretty common for us to just go and set up shop and do an overnight there playing till the wee hours of the morning.” (Orangejesus (898961))

One poster had an interesting comment related to marketing, “The guys running the computer place in my neighborhood has it figured out: hot high school girls. Apparently, they get paid 15 an hour, which is decent, but obviously draw in the entire geek crowd (especially from their high school). They sell computers, too.” (darkmeridian (119044)) The idea of using young girls is appealing to draw in the geek crowd, but it’s not my aim. His more pertinent comment that gets lost at the end is that the business sells computers as well, this indicates another tie-in rather that just being a gaming place. Of course, I’ll have to keep the other in mind if I even do a gaming night and want to draw a crowd.

A differing opinion indicates the idea isn’t very viable, “I live in the Chicago area (Chicago proper) and internet access is pervasive. I’m not just talking about in the home. I’m talking about other places that offer free internet access in addition to beverages and food.” (IANAAC (692242))

In support of my overall plan, one author had positive things to say about additional services. Adding printers, scanners and other office supply feature that people could use during the day; host special events targeted to specific ages or individuals; perhaps use a credit card like system for memberships and cash back programs; work out an advertising and sales deal with other businesses. (grapeape (137008))

“. . . more creative business establishments would use something like that as an attraction to compliment their other business.” (mark_lybarger (199098))

“. . . if you combine food/coffee with the gaming, you may be onto something.” ( vbwilliams (968304))

KagatoLNX (141673) who actually runs a place (geekerz.us) along with three other folks, puts some things into perspective. He/She mention that at a hypothetical $5 per hour, it still takes a lot to cover expenses. Some people just want to come in and surf or play games a little, and they will if it’s available instead of doing it at home. There may be other reasons, such as college students who need to get out of the dorm for a while or don’t trust their roomate. And last, they mention how a person should not “go it alone” and should makes sure they budget for equipment upgrades because nobody likes to use outdated equipment. I found this to be very good advice.

Poster cbreaker (561297) had some advice on things to avoid:

• “Ruthless monitoring of the players. If you have the game police watching everyone and barking every time someone does something you don’t like, it will keep people away REAL fast. Make sure you have a supply of keyboards and mice. They’re cheap. Don’t worry about them so much.”
• “Tailoring to the very young kids. While families might visit a gaming center once in awhile, you don’t want to alienate your core customer group by forcing them to be proper little gentlemen because sometimes a young kid might play. Some ediquite is a good idea, but be too strict and you’ll drive them right away.”
• “Limiting internet usage. Don’t limit internet usage. Sure, you could block porn sites, but don’t block everything else. “

. . . and some things to consider offering:

• “A game cafe should have a method of quickly regenerating a PC to “defaults” and should have a couple machines on stand-by. If you don’t have to worry about users screwing up Windows, you don’t have to be the PC Nanny.”
• “You should also provide stations for people that want to bring in their own PC’s. You could charge the same amount of money, but let people use their own equipment. If I am going to go to someplace like this for a bunch of hours with some friends, I want to bring my own PC, my own LCD screen, and my own keyboard+mouse.”

One Anonymous Coward wrote about the possible problem with teens and items coming up missing. His or her point was that a gaming cafe would be of most interest to teens, not adults, and that many teens can be delinquents.

Now this person has a cool idea, “I know a guy that has a successul gaming business. He offers a laundry feature. So people can clean their clothes while they purchase \ play games. This is a great idea considering alot of gamers need to clean their clothes anyways. btw I’m an evil genius.” (dredknight (994814)) Where have I heard this one before?

miyako (632510) is another poster who mentioned more than just games, supplying table tops and other services that gave patrons a better experience.

These comments and a whole lot more provided a lot of insight to a part of my business model. I’m keeping the page bookmarked and will refer back to it in the future.

Generally, I found most comments were positive but always showed there was more to the idea than just supplying some space and computers for rent. In most cases there was another tie-in, such as coffee, drinks and couches; the business supplied a place to relax and socialize as well as game. Cautions were given to not be very strict or focus on just one area of business. Suggestions included:

• Open table tops for board gaming.
• Empty desks with computer hookups for hire (bring your own pc)
• Offer Console and arcade gaming .
• Offer food and drinks.
• Listen to the customers to see what they would like to see.
• Keep up the equipment, update as necessary, don’t let it get old.
• Focus on specific targets, such as teens for gaming, adults for work related business, etc.
• Don’t forget about vandalism, take steps ahead of time.
• Know your neighbors, the businesses next door, help them and they’ll help you.
• Don’t try to do it all on your own, get business partners (or family).

Overall I think this was some really good insight to a portion of the market. From here I still need to do some personal surveying in Airway Heights, but this gives me a lot to think about.

Asa Jay

It’s nice to know there are benefits to -not- rushing into things.

Today I spent over an hour with John Coleman at the SBA BIZStreet center downtown. The very first question as we sat down after introductions was “Have you purchased or leased any space yet?” To which I promptly replied “No, I’m just in a research phase to find out if my idea is viable.” John sat back and let out a sigh of relief and then praised me for my foresight. In the conversation that followed, John told me a little bit about what it takes to start a small business before you ever start thinking about money.

I had wanted to talk about market research with John, and perhaps broach a few other questions. As it was, I was exactly on the track John thought I should be on. Let me first talk about his thoughts on rent, and then move into some of his ideas for what I need to survey and think about.

You may remember that I’ve had one Realtor call me back and tell me the rent was nearly $5,000 per month on a five year lease. John told me that was typical, but do not under any circumstance accept it. Instead, negotiate the lease. John told me the riskiest time is in the first year, perhaps even in the first six months, so it doesn’t make sense to sign a five year lease. He then went on to say I need to think small to start with, using a “phased” approach to space and future expansion. “Don’t try to buy it all at once” he told me, instead try to figure out the core product or service you want to offer, then scale it down, open your storefront and let the customer drive the rest.

What sticks with me most, is how John told me about many people who have a “fantasy” idea of what their business should look like and then they go out and implement it, only to fail because they tried to do it all at once. He said the problem is the customer may not like everything, even if you do. So don’t do at all, do some market research to find out which pieces the public wants first, then as they come in and think about other services, they will let you know and you can expand the business offerings from there. If found this to be refreshing and enlightening. John’s delivery was positive and helpful; he didn’t want to see a person fail, so he made them feel at ease, even when he needed to break down the “fantasy” aspect of the idea.

We also talked about planning for failure. Too many people starting their own business don’t plan for failure, and then don’t know how to handle it when it comes; they are in too deep with the bank, or a lease agreement, or inventory, materials, etc. His highlighted points were:

• Know your business and the market you are in.
• What will you do if nobody comes in the first week you are open?
• What is the worst case scenario that spells failure, and what do you do if it happens?
• Think small at first and grow with your customers.
• Be careful about loans, they can trap you in a failed business and not let you out.
• Most importantly, do everything in such a way that allows you to sleep at night.

This last point was probably his biggest and really summed up everything else. If you go to bed fretting about the bills, or where the next customer is going to come from, you have a problem. The whole counceling session really was more about thinking ahead and trying to anticipate how the business would do, plan small and reduce failure opportunities.

When we discussed surveying the market, John suggested I find other businesses with the same or similar offering. Try to talk to the owners, find out what has worked and what hasn’t. He did mention if the idea hasn’t really been done before that I might have a good shot at it. Later we talked about surveying people in person, but that I probably wouldn’t get a lot of responses unless I could tie in some kind of incentive. In my case, he made the tentative suggestion I give away a computer to try and lure people into taking the survey. I didn’t think that was too bad of an idea and filed it away in my notes. Last, John asked how people will find the business, and suggested I use those methods to find others. Not only would this help me find other businesses I could look to or advice, but I would also learn a little about advertising. Interesting way to tie the two objectives together.
In summary, these are the things I need to do:

• Find out if anyone else is doing what I want to do.
• Create a phased plan of space and implementation.
• Use as little money from banks as possible.
• Don’t be afraid of seconds, used equipment or building things yourself.
• Use the customer to your advantage, to help determine the next step.

That hour went really fast and I would like to have talked to John even more, but I realize I have other work to do before I should go and see him again. I need to do more work on the market survey.

Asa Jay