Starting a business...now?

[TMeury]

Friends,

I'm looking for some general insight and opinions here.

The live events industry I was in for 10+ years has been decimated by the pandemic, obviously. I've been out of work since March and this business idea I had years ago has been rolling around in the back of my mind seemingly trying to nudge me into taking the chance. I'm at the point of, call it, information gathering...

I don't want to go into too much detail of what it is exactly but, it does involve selling guitars with a store front plus some other things. Lets say gear sales would be between 30-40% of the business.

Those of you who have started your own thing. Can you tell me a little about the experience? I know I shouldn't plan on sleeping for awhile.

What do you think about starting something in the middle of a pandemic? I'm in Florida so things are a bit lax around here (I'm not quite comfortable with how lax but nevertheless) in terms of business openings.

Where is the used guitar market headed? Will there always be a market? Where does "vintage" stuff go from here?

As a young player, I always looked up to my guitar player heroes and thought "I could never afford a 'X' guitar" but as life progressed, I ended up with several "X" guitars. Is that a thing anymore? I know electronic music is and has been huge. Less and less guitar players but I think it'll come full circle again. I read recently that due to the pandemic, instrument and recording software sales have boomed.

Ok, I'm rambling now...

Thoughts? Let us have a discussion.

 

[Kiwi]

I don't want to go into too much detail of what it is exactly but, it does involve selling guitars with a store front plus some other things. Lets say gear sales would be between 30-40% of the business.

TM,

Retail with a store front, inventory, monthly rent and insurance and overhead will kill you in short order right now. Even in normal times, this is every older gear-head's Plan B: I'm-a open a store, deal guitars, make a few thou a month.

No one makes it. Big Box GC, backed by private equity and their unlimited appetite for losses, is dying - and you want to open a mom-n-pop? How many established dealers are trying to just hang on right now?

I don't mean to be funny, but that other 60-70% of sales needs to be ... uhhh, untaxed substances, for you to even have a chance of being around in 6 months.

Prepare an Excel spreadsheet with estimated cash flow for 12 months. Plug in your fixed costs, your variable costs, and your semi-variable costs. Then plug in your monthly sales revenue and your reasonable gross margin. If you don't know what these are... don't even start.

Sorry to be ghastly, but business is what I do.

--K

 

[TMeury]

Sorry to be ghastly, but business is what I do.

--K

K,

I appreciate your reply and input. It’s definitely valued. This reply is via mobile so pardon any mistakes.

I don’t want to be to open about the full vision (maybe selfishly or maybe even foolishly) but, the theory is gear sales wouldn’t be the main chunk of income. As you said, we all at some point wanted to open a gear shop. I don’t plan on slinging Chinese Squires and offer guitar lessons to the neighborhood kids nor having a **** ton of overhead.
I’m also realistic to the fact that high end vintage and high end guitars (ala core PRS) may be a dying breed for now.

Although I haven’t started my own business ever, I am familiar with the process to enough degree to be dangerous...possibly to myself.

I’ve got startup cost and projections sheet going now. Plus I’m in contact with someodd similar business models throughout the US. I’m hoping to gain some insight from them.

Again, I appreciate your input and look forward to discussing further. Perhaps privately via email.

 

[veinbuster]

I’m pretty much of Kiwi’s mindset.
Store front music is a tough market. Store front retail at all is going to be especially challenging for some time to come.
Cash flow will be a bear for quite a while because you need to get months worth of inventory before you open the doors.

Used market is anybody with a spare guitar on Reverb. Yes, there will always be a used market. There will always be a market for vintage, but I think many of the high dollar buyers are aging out of the market.

I don’t believe there are any fewer guitar players out there, Guitar just gets a bit less air time.

So...if you have gobs of time to put into it, and have inventory or can afford to have cash tied up in inventory, and you have a vision for something that will bring people to you, I wouldn’t talk you out of it. But maybe test your vision in a low overhead way.

 

[veinbuster]

Although I haven’t started my own business ever, I am familiar with the process to enough degree to be dangerous...possibly to myself.

I’ve got startup cost and projections sheet going now.

I’ve been through 4 startups (not counting my wife’s business).
It’s always more work than you think, and a lot of the work isn’t in your area of expertise- no matter how broad your background is.

It’s very easy to miss costs in a spreadsheet. It’s also very easy to be overly optimistic about cash flow. Sales are unlikely to close as fast as you hope. You probably won’t get paid as fast as you think. And it takes time for sales to build to a sustainable level. It’s also easy to trick yourself into believing a surge in sales is permanent. It could be lucky timing, a novelty, who knows, so don’t get cocky until you see a lasting trend.

Not that I’m talking you out of it, but you have to have the stomach for uncertainty.

 

[AP515]

Doesn't take an excel spreadsheet to know any luxury items are going to struggle for months if not years. Unless your business model is about high turnover commodities, brick and mortar are business killers. Online maybe...

 

[László]

I’ve been through 4 startups (not counting my wife’s business).
It’s always more work than you think, and a lot of the work isn’t in your area of expertise- no matter how broad your background is.

It’s very easy to miss costs in a spreadsheet. It’s also very easy to be overly optimistic about cash flow. Sales are unlikely to close as fast as you hope. You probably won’t get paid as fast as you think. And it takes time for sales to build to a sustainable level. It’s also easy to trick yourself into believing a surge in sales is permanent. It could be lucky timing, a novelty, who knows, so don’t get cocky until you see a lasting trend.

Not that I’m talking you out of it, but you have to have the stomach for uncertainty.

As a guy with plenty of experience with my own businesses, I'd agree with everything veinbuster says here, and then some.

 

[TMeury]

Not too much optimism going on here.

 

[TMeury]

I’ve been through 4 startups (not counting my wife’s).

How are they doing now? Pre and Mid pandemic

 

[RC Mike]

Spending on high-end items doesn’t seem to be slowing yet. I know I’ve spent more on hobbies this year than ever before. Those with good jobs and stability have fewer opportunities to spend on travel, services, and things like dining.

In other words, there’s opportunity if you pick your market correctly.

Retail space should get very plentiful, so it should be cheap.

There’s nothing wrong with trying something, provided that you’re smart about it. Decide how much you can lose and when you’ll pull the plug before you begin. Be realistic, not optimistic. Don’t over-extend yourself.

What are your opportunity costs? Think about what you give up by doing this.

 

[CandidPicker]

@TMeury,

If your plan to open a retail store doesn't work out, you could always go back to school and earn a teaching certificate in music.

While there aren't as many in-person teachers what with Covid, YT and online lessons, the value of sitting with a teacher virtually via Zoom, FaceTime or Skype for 30 to 45 minutes goes a long way towards providing income. Your lessons could be payable via a Patreon page, or paypal.me.

If teaching guitar isn't your strength, are there other marketable skills that you have? Could you create a YT channel that would be a source of income? Consider what strengths you might have that would be less risky to invest in, and pursue these.

You may need to remember that retail storefront requires a lot of upfront investment cash portioned out for space rent, insurance, supply line, inventory, training, knowledgable staff, payroll, and more. There is much greater chance of not making a profit in this economy for several years until the pandemic subsides and consumers can feel more confident spending money on wants, instead of needing to save it for needs, especially because many are still unemployed and can't budget for luxuries like music gear.

In prosperous times, I'd say your chance would be better. Just not 2020-2021, until the economy turns around...

 

[jxe]

i appreciate being nervous but geez, it’s not like every guitar shop is doomed or has to be in an $5000/month location. and maybe the 65% is strippers and hooch or (and?) overpriced donuts? ‘hey davey rock on’

 

[jxe]

please don’t get a teaching certificate.

 

[veinbuster]

How are they doing now? Pre and Mid pandemic

One was put to rest long ago - sold the underlying technology to a bigger company.
One I parted ways with quite a while ago, but it has a stable business, not remotely impacted by the pandemic.
One made a dramatic change of direction after I stopped my involvement. It was stable pre pandemic, but will be challenged coming out of it. It is the only one that was consumer facing.
The only one I’m still involved with (though retired from) has proven pandemic proof.

My wife’s business slowed a little prior to the pandemic because she is thinking of retiring.

 

[Edward Shaw]

Before you commit to unchartered waters, TM, let's look at your original assumption;
namely, that the live events business has been decimated by COVID. Does that mean
you are to pack up and go away, start a store? This would mean throwing away ten
or more years of experience and knowledge gained. You might have guessed I am going
to suggest you look into how people are filling the needs and desires accomodated by
concerts. When you look, you will find exploding new markets in live and recorded
entertainment, using techniques we have just scratched the surface of developing.
The best thing is if you throw yourself into filling the unique needs of today's
audiences, they will literally throw roses at you for caring and making the effort
to enrich their lives and the lives of their loved ones. Why don't you consider putting
some of that hard earned creativity to use by jumping right in to what will be seen
in retrospect as possibly the greatest entrertainment opportunity and challenge of
our lifetimes. No, I am not talking about streaming, but since you brought it up,
every church in the country is now streaming their services. That's only one area
that needs help in the form of professional guidance. Do they ever. Then there are
You Tube and Facebook.
Let's get to brainstorming and
figuring out how to beat this thing. No, guy, let's keep the good times rolling.

Mod Edit: This was cool until you brought up politics. Please keep your political opinions to yourself. Cheers

 

[TMeury]

Firstly, I really, really appreciate all your inputs!

Secondly, after taking all your (and others) comments to heart and some beers to the head, I agree that now in this uncertain time is a terrible time to start anything brick+mortar.
I’ll keep growing my side hustle and see how it comes out on the other side of this madness.

Lastly, great input Edward! My old company has been adapting as well as possible with steaming services and outdoor LED walls for sports, churches, schools, etc but it hasn’t been fruitful enough to bring any staff back.
But you’re correct in there has to be some uncharted waters that will become the new norm. It’s just a matter of figuring it out.
Off to brainstorm!

Thanks again everyone!

 

[CVS]

The only mom and pop shops making it pre COVID were those who's owner owned the building the shop was in and those that made repairs, lessons and service a major part of their business. Just my 2 cents. By all means as others have mentioned do prepare a spreadsheet with all your costs and revenues in as much detail as you can - add in an expense contingency for expenses you don't know about right now. Front load the expenses and be very conservative with the revenues.

Good luck. You will need it. Maybe consider working at a mom and pop store for a while before you decide to take the plunge???

 

[Edward Shaw]

Sure thing, TM; any time.
You catch on quick. Video conferencing has been around as long as T-1 lines. Making it pay outside the public sector has been a unsolved problem but that may eventually change. There's challenge #1. Also, maybe conferencing and streaming is not the answer. When I was younger, we had this idea of using the satellite rig a motel was using to broadcast horse racing to do something creative with music entertainment. The idea was to set a screen behind the band, and feed in known stars who would play along with the band as if they were there in real life. Great for birthday parties and makes for a great
couple of lines on the Best Western marquee. So, there's a creative brainstorm for ya. Oh, before I forget, consider downloading OBS, Open Broadcasting Software. Just the thing, and free. Best wishes!

 

[HANGAR18]

Friends,

I'm looking for some general insight and opinions here.

The live events industry I was in for 10+ years has been decimated by the pandemic, obviously. I've been out of work since March and this business idea I had years ago has been rolling around in the back of my mind seemingly trying to nudge me into taking the chance. I'm at the point of, call it, information gathering...

I don't want to go into too much detail of what it is exactly but, it does involve selling guitars with a store front plus some other things. Lets say gear sales would be between 30-40% of the business.

Those of you who have started your own thing. Can you tell me a little about the experience? I know I shouldn't plan on sleeping for awhile.

What do you think about starting something in the middle of a pandemic? I'm in Florida so things are a bit lax around here (I'm not quite comfortable with how lax but nevertheless) in terms of business openings.

Where is the used guitar market headed? Will there always be a market? Where does "vintage" stuff go from here?

As a young player, I always looked up to my guitar player heroes and thought "I could never afford a 'X' guitar" but as life progressed, I ended up with several "X" guitars. Is that a thing anymore? I know electronic music is and has been huge. Less and less guitar players but I think it'll come full circle again. I read recently that due to the pandemic, instrument and recording software sales have boomed.

Ok, I'm rambling now...

Thoughts? Let us have a discussion.

Well, I can tell you how I failed and what I learned in my many attempts to operate a "side business".
1. "Do something you love and make a business out of it" is complete hogwash. Find out what you are good at and do that instead.
2. Do market research of some sort and find out what people actually want to buy and then figure out a way to supply that need in a more cost effective way than your competitors who are selling the same thing. (Basic capitalism.)
3. The guitar industry is a dying industry barely running on life support at the moment. The only people buying guitars are old guys, age 40-60 years old. The new generation of young people growing up right now aren't buying guitars, they never will and neither will their kids. If you are reading this, you are probably a member of the last generation of the guitar buyers.

That ought to get you started.

 

[jxe]

i’ve been waiting for the guitar apocalypse for decades, but for whatever reason everyone seems to have more guitars than ever before (80s and 90s almost no one had a giant collection), vintage gear is still expensive, and (when i was selling) young guys showed up and bought all of my guitars, amps, and pedals.