Asa Jay's weblog

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

A few days ago I was doing some Internet browsing to find the various Chambers of Commerce for the local town when I came across the West Plains Chamber of Commerce at www.westplainschamber.org. This Chamber covers Airway Heights, Medical Lake and Cheney. I contacted them by email and they responded, telling me they were sending me a packet of information by mail. Today I received the packet.

The envelope from the West Plains Chamber of Commerce contained several brochures to various business resources, many of which I’ve learned about through the SBA. In addition, there were three city information packets covering Airway Heights, Medical Lake and Cheney. I’m a little disappointed in the demographic information, in that it really doesn’t contain much about the people, and focuses more on simple city information. I was looking for more information on the percentages of different age groups and incomes. Here is what I did get:

• Airway Heights:

• Population = 5,000
• Median age = 34 years old
• Median income = $29,829

• Population = 4,350
• Median age = 36 years old
• Median income = $42,159

• Population = 10,070
• Median age = 23 years old
• Median income = $22,593

On the surface, Cheney had the most surprising results with the largest population but the lowest age and income. I imagine this takes into consideration what I would call the transient student population. This would of course cause the population figure to go up, and if the students were taken into account for income demographics, then the income would of course appear lower as well. This really doesn’t fit picture I would have liked for Cheney, but that’s okay since I’m really focusing on Airway Heights.

What I would really like to know is the percentage of people who are in different age groups, such as between 6 and 12, 13 to 17, 18 to 26, that sort of thing. I will most likely need to contact the city directly in order to get that kind of information.

Other items I did today:

One of the books I got from the SBA BIZStreet was provided by Key Bank. There was a web link listed to www.key.com/smallbiz which I browsed for quite some time. They have a lot of information to help small business, I’ll be revisiting this site in the future.

I spent time reading about market research in the Computer Learning Center guide, which I also brought home from the SBA

Time spent leaning today was about an hour.

Asa Jay

More accurately, I visited the Spokane Chamber of Commerce BIZStreet & PTAC office at 801 W. Riverside Ave. Suite 240 in Spokane WA, 509-459-4120 (www.bizstreetspokane.com). This was my first visit to the office. I really didn’t know what to expect; I was on a mission to mostly find out what the office could provide.

In addition to counselors, the office contains a small business oriented library where customers may check out up to three books for seven days. I spent part of the afternoon browsing books and doing a little reading. I had come to the conclusion that I need to focus more of my efforts on market research, so I tried to choose titles that would help in this regard.

Here are some of the notes I took:

www.circlelending.com. I found a pamphlet printed out from Circle Lending that talked about financing small businesses. After reading through it I came to a better understanding of where I should go for money resources first, family. I’d never thought about asking friends or family for small loans to start a business; however, from this pamphlet it would appear some very successful businesses got their start that way including Wal-Mart and Subway. So this has given me a new perspective on where I might look for some money. This pamphlet was so helpful, I downloaded it and printed it for myself once I got home. In addition, the web site also has other resources I’ll probably get back to at some point.

If approaching a bank, think like a bank. Keep these things in mind which they will look for or ask about:

• Management Expertise and Experience.
• Detailed Business Plan.
• Cash Injection, i.e. how much will I finance myself.
• Collateral, what will I hawk to back up the loan.
• Personal Character, I should think about references.
• Credit History, so far so good.
• Personal Financial Statement.
• Consider different loan types:

• Amortized
• Startup/Graduated
• Interest Only
• Seasonal

I certainly need to do more research and reading on this subject.

After some time reviewing financing ideas, I turned my attention to marketing. I found a loose-leaf book about starting a computer learning center. This was an idea very close to what I was thinking, so I began to page through it. I found some highlights and questions I need to ask myself regarding who I want to sell to, or rather, who I am targeting:

• Middle to upper class?
• Dual income families?
• Single Parent families?
• Parent(s) with a child under 6?
• Adults seeking training or retraining?
• Teachers looking for alternate learning centers for students after school?

From here, I now need to figure out a way to survey the market and see if there is a need or a desire for my Internet cafe’.

I made an appointment for next week, 9 August at 1pm with John Coleman, who is one of the councilors. I’m not sure what we’ll talk about but I’ll get a set of questions together. Lastly, I checked out some books before leaving, some of which I took the above notes from:

• Small Business Owners Manual, by Entrepreneur Magazine, ISBN: 1-891984-00-4
• Financing the small business, by Robert Sisson, ISBN: 1-58062-681-5
• Computer Learning Center, Entrepreneur Magazine Group Business Start-up Guide (No ISBN)

I spent just over two hours browsing books and taking notes on these key ideas.

Things I learned:

• Think more than banks for financing: family, friends, etc.
• Prepare properly and thoroughly before approaching a bank.
• There are some great on-line resources for information about starting a small business, including forms as well as advice.
• I need to map my target audience, much like any other presentation, I need to know who I wish to serve.
• I really need to do a market survey to know if my target audience is interested.

Tasks to add:

• Prepare a market survey questionnaire.
• When I finally know my financial requirement to start up, break it down into smaller chunks and make a list for alternate financial approaches. (Make a list of people I might ask to borrow money from)
• Read more from the books, and make it to my appointment next week.

Asa Jay