Downtown Electronic Business?

[xen0blue]

I've been toying with the idea of opening an electronics store downtown, and the more I think about it the better idea it seems, but I don't really know where to start and there are alot of unanswered questions I have that I hope some of you might be able to answer

1) Does the city give any kind of incentives to business opening downtown like they did with urban market?
2) What would you think about a electronics store downtown? what would you like to see in it
3) To protect myself from the bank coming after me if the business fails, do I make the company before or after I make the loan? Also, should I do an LLC, Sole Proprietorship, corp, etc?
4) Where do you get the cash registers/system to scan credit cards?
5) Where would you get the merchandise? For instance, if you want to buy a TV, do you have to call the manufacturer of each TV you want to buy and order them?
6) How much would a ballpark for rent be downtown? I'm thinking specifically of the lower floor 1414 elm.
7) How much should I ask for a loan?
8) What permits do I need?

[Hannibal Lecter]

OK, I'm going to come across as a cold-hearted bastard here (so what else is new?), but I'm going to be blunt. Please take this in the constructive vein in which it is intended: If you don't already know the answers to these questions you have no business starting a business.

If you really want to pursue this, here's a great place to start: http://www.cox.smu.edu/centers/caruthentrepreneurship/

If you don't already have a lot of money in a the bank, or at least an excellent relationship with a banker, don't expect a bank to loan you money.

1) Does the city give any kind of incentives to business opening downtown like they did with urban market?

That should be the last question you ask, not the first.

BTW, if high volume, low overhead mass market retailers like CompUSA, Circuit City, and Tweeter are dead or on life support, how do you expect to make it with one small store in a retail wasteland like downtown Dallas?

[xen0blue]

OK, I'm going to come across as a cold-hearted bastard here (so what else is new?), but I'm going to be blunt. Please take this in the constructive vein in which it is intended: If you don't already know the answers to these questions you have no business starting a business.

If you really want to pursue this, here's a great place to start: http://www.cox.smu.edu/centers/caruthentrepreneurship/

If you don't already have a lot of money in a the bank, or at least an excellent relationship with a banker, don't expect a bank to loan you money.

That should be the last question you ask, not the first.

BTW, if high volume, low overhead mass market retailers like CompUSA, Circuit City, and Tweeter are dead or on life support, how do you expect to make it with one small store in a retail wasteland like downtown Dallas?

Well, first of all, this would be a small store and mostly cater to downtown and uptown. The closest competition is Target which really isn't much competition because they don't have a great variety of *good* brands and most of their stuff is of cheap quality anyway, and the closest "real" competition is Best Buy on Walnut Hill. Second, downtown Dallas is booming...you know this or you wouldn't be on this forum, and I believe it is becoming "the" place to live. Also, the daytime population balloons to about 350,000. An electronic store is a huge gap that needs to be filled in the retail spectrum of downtown.

[carousel]

^ plz keep ur money in the bank and not in the landlord's pocket. an electronics store in downtown dallas has little to no chance for survival. perhaps, in 5 yrs you should cautiously consider pursuing this concept.

[carousel]

I've been toying with the idea of opening an electronics store downtown, and the more I think about it the better idea it seems, but I don't really know where to start and there are alot of unanswered questions I have that I hope some of you might be able to answer

1) Does the city give any kind of incentives to business opening downtown like they did with urban market?
2) What would you think about a electronics store downtown? what would you like to see in it
3) To protect myself from the bank coming after me if the business fails, do I make the company before or after I make the loan? Also, should I do an LLC, Sole Proprietorship, corp, etc?
4) Where do you get the cash registers/system to scan credit cards?
5) Where would you get the merchandise? For instance, if you want to buy a TV, do you have to call the manufacturer of each TV you want to buy and order them?
6) How much would a ballpark for rent be downtown? I'm thinking specifically of the lower floor 1414 elm.
7) How much should I ask for a loan?
8) What permits do I need?

I have to agree w/ HL. If you are seriously asking these questions, you have no business pursuing this concept.

[Mballar]

I begrudgingly agree with Lector150%! You probably shouldn't be going into business AT ALL, much less DT, if you don't know the answers to those questions. Find a small business incubator and educate yourself first.

[galore]

The closest competition is Target.

Actually, the closest competition are online shops.

I haven't bought an electronic consumer device in a brick'n'mortar shop in almost 10 years.

[JohnMcKee]

Well, first of all, this would be a small store and mostly cater to downtown and uptown. The closest competition is Target which really isn't much competition because they don't have a great variety of *good* brands and most of their stuff is of cheap quality anyway, and the closest "real" competition is Best Buy on Walnut Hill. Second, downtown Dallas is booming...you know this or you wouldn't be on this forum, and I believe it is becoming "the" place to live. Also, the daytime population balloons to about 350,000. An electronic store is a huge gap that needs to be filled in the retail spectrum of downtown.

What about Ed Kellum and Son on Cole ave and Starpower on Oak Lawn?

[LH_Newbie]

Well, first of all, this would be a small store and mostly cater to downtown and uptown. The closest competition is Target which really isn't much competition because they don't have a great variety of *good* brands and most of their stuff is of cheap quality anyway, and the closest "real" competition is Best Buy on Walnut Hill. Second, downtown Dallas is booming...you know this or you wouldn't be on this forum, and I believe it is becoming "the" place to live. Also, the daytime population balloons to about 350,000. An electronic store is a huge gap that needs to be filled in the retail spectrum of downtown.

I used to be a bit of an audio head (ie Sunfire Amp, Velodyne subwoofer, Magnepan 3.6 mains, etc)... if you're saying Best Buy carries "good" gear, you might want to do a little more audio research. If you're looking to open a store with good brands, you have to differentiate yourself from your competition. As an example, my Magnepan 3.6 speakers were absolutely amazing, but I'm not sure about the market in Dallas. It seems that the people I've talked with about audio are more into small and flashy - think Bang and Olufsen (spelling?) or (another marketing company with crap for product) Bose. Brand recognition is alive and well here, so I couldn't even imagine putting together a unique product line and trying to market it out of downtown at this point. The market just isn't there - either in taste, budget or sheer quantity of buyers for what you're referring to.

As others have suggested - spend the next 5 years studying the market and letting it grow. Go to audio shops and listen to different products. Learn their product lines, determine which lines of products are good, have the right price points and can differentiate your store from all the others. Contact them. Start a relationship with them so when you start you can actually get product.

Brian

[xen0blue]

I used to be a bit of an audio head (ie Sunfire Amp, Velodyne subwoofer, Magnepan 3.6 mains, etc)... if you're saying Best Buy carries "good" gear, you might want to do a little more audio research. If you're looking to open a store with good brands, you have to differentiate yourself from your competition. As an example, my Magnepan 3.6 speakers were absolutely amazing, but I'm not sure about the market in Dallas. It seems that the people I've talked with about audio are more into small and flashy - think Bang and Olufsen (spelling?) or (another marketing company with crap for product) Bose. Brand recognition is alive and well here, so I couldn't even imagine putting together a unique product line and trying to market it out of downtown at this point. The market just isn't there - either in taste, budget or sheer quantity of buyers for what you're referring to.

As others have suggested - spend the next 5 years studying the market and letting it grow. Go to audio shops and listen to different products. Learn their product lines, determine which lines of products are good, have the right price points and can differentiate your store from all the others. Contact them. Start a relationship with them so when you start you can actually get product.

Brian

I'm really not talking about audio, i'm thinking more along the lines of TVs and computers. Anyway, I wouldn't start a business if I didn't know what I'm doing (yes, i'm clueless but of course i'm willing to learn and will study my ass off to find out what I need to know).

So, let's assume i'm a experienced business person and know what i'm doing, what would ya'll say then?

[sterling]

I'm really not talking about audio, i'm thinking more along the lines of TVs and computers. Anyway, I wouldn't start a business if I didn't know what I'm doing (yes, i'm clueless but of course i'm willing to learn and will study my ass off to find out what I need to know).

So, let's assume i'm a experienced business person and know what i'm doing, what would ya'll say then?

Assuming and all, I would posit that downtown has many yawning gaps in it's fabric, many of which don't relate to electronics. Though electronics may be as good a shot-in-the-dark as anything else, it seems to me "counter-evolutionary" in downtown Dallas retail currently. Of course, you may be the visionary who proves everyone else wrong.

I believe you've raised this in another thread, so I guess it is of some primary interest to you. Sorry not to be able to be very optimistic about it, big box retailers et al not withstanding. Small business is a difficult artform. As for this forum, and lambs asking questions of wolves... Oh, goodness me.

My take... If you want to be in electronics, work every job in someone else's store. At least when you work for someone else, you always have the option to quit. When you work for yourself, you almost have to shoot yourself to get a day off. Multiply that stress by the number of employees you have, quadruple that if one of the employees is a spouse or relative. Come to think of it, just go ahead and get a job at the post office.

[aygriffith]

Having worked in some retail consulting with a few small and medium sized CE chains, i can tell you run don't walk away from that idea. If you want to open a store with extremely large profit margins open a furnature store.

To answer your question about how do they make money it boils down to the amount of accessories they sell, the service plans they sell and the install. Computers very often made between single digit negative percentages and no more than 5 or 6 percent profit. If they were in the sunday paper, you can kiss even single digit losses away expect double digit. TV's are a product that can sink you in two ways: If you carry alot of inventory and always are the guy that has it in stock you will either have bought them at the beginning of the run for too much of a cost or you will have just bought too many at any cost and never be able to get rid of them for a profitable price. If you are they small guy that always has to have it the next day the customer will walk out the door and go buy it at best buy because they have it in stock. You can't be the guy who goes to your distributor every day and picks up product. The happy medium is the place most companies never find because the small companies have neither the demand or the capital to keep the inventory right.

If you really want to run a CE company here's the rough way to create a successful for now company. Install is the hot thing right now. Most cities are full of do it yourselfers that have no business installing and CE products. You have to be an Install company that happens to sell CE product. Not a CE company that does install. You do this by only carrying maybe one brand of speakers, one brand of audio and sources, and then you have the customers pick from what ever your distributor has IN STOCK of TV's on the day they want to do their job and then you pick it up. In essence you should only have one setup in your show room. And it isn't a show room, it is a design studio to sell and idea not a product. Everyone sells a product you have to sell the idea. There are more people in most cities that want a 50in plasma and 5.1 speakers and all the gear hidden in a closet than people who know that they want a Pioneer 50in plasma, JM Labs speakers, and Bryson amps and components. People who love electronics have a really really hard idea with this concept. That is why so many of them have horrible problems selling, they want to sell electronics and most people want to buy the idea of home theater system. Not what is 3:2 pull down or what refresh rate or the hertz a speaker can reproduce.

If you really want to do it, buy a small office space somewhere for cheap and start with one Econoline panel van for your installers and then go find yourself a distributor that has the products you want to sell IN STOCK.

Downtown is a pipe dream, you don't want to be the only person downtown selling electronics. Thats the first part of your problem. Just remember a rising tide lifts all boats. If you have no exposure from larger companies bring people into your area with their advertising dollars you will never make it. Everything I've mentioned is about 5 percent of the problems of owning a CE shop so trust me the issues just start with those listed above.

[gshelton91]

I think something that catered to the IT Geeks working downtown might work out... All the companies downtown have IT departments and from time to time they will need something immediately.... the problem is the margins are so low that you can't afford rent and the carrying cost of the stock.

[AeroD]

This thread is probably better suited in Opolis.

[xen0blue]

I find it dishearting that everyone is heralding downtown as "the" next place, yet everyone is saying it's a bad idea? Surely i'm not the only one who is frustrated because I have to drive to Best Buy every time I want to buy a DVD, video game, TV or computer part?

[AeroD]

I find it dishearting that everyone is heralding downtown as "the" next place, yet everyone is saying it's a bad idea? Surely i'm not the only one who is frustrated because I have to drive to Best Buy every time I want to buy a DVD, video game, TV or computer part?

Cry me a river.

You moved downtown knowing full well that DT lacked certain "amenities". But now you expect that to be changed overnight just because you live there now.

Suck it up.

[LH_Newbie]

I find it dishearting that everyone is heralding downtown as "the" next place, yet everyone is saying it's a bad idea? Surely i'm not the only one who is frustrated because I have to drive to Best Buy every time I want to buy a DVD, video game, TV or computer part?

Everyone is saying it's a bad idea to open up this type of store... NOW. I think several folks stated that the area may be mature enough in 5 years to support a CE store (with it's notoriously low margins).

[incrediculous]

So, let's assume i'm a experienced business person and know what i'm doing, what would ya'll say then?

Well, that changes everything. If you were an experienced business person and inquired about opening a small electronics store in downtown Dallas, I'd say you weren't an experienced business person.

But seriously, you can't jump into this kind of thing overnight. Doing retail right, and actually making money off of it, is a beast of a chore. I wouldn't do it. It's not glamorous. It's expensive. It's hard work. There are little perks. The margins are small, and the risks are high.

Not to discourage you though. Just the reality of retail.

***EDIT***

Someone resurrected this thread. I'm not as cynical as I used to be. I suppose it could be done, but you'd have to be an extraordinarily inventive businessperson to pull it off.

[xen0blue]

Cry me a river.

You moved downtown knowing full well that DT lacked certain "amenities". But now you expect that to be changed overnight just because you live there now.

Suck it up.

Hey, i'm asking for advice, don't be an ass.

[sterling]

Always good business to close a conversation with a pejorative rejoinder.

[ablesharp001]

He is absolutely correct, online shopping is providing more and more fun to people without going physically to the store.

[mjblazin]

I find it dishearting that everyone is heralding downtown as "the" next place, yet everyone is saying it's a bad idea? Surely i'm not the only one who is frustrated because I have to drive to Best Buy every time I want to buy a DVD, video game, TV or computer part?

Why aren't you taking the Red Line to Park Lane and making the 5 minute walk to Best Buy?

[frankchitown]

Why aren't you taking the Red Line to Park Lane and making the 5 minute walk to Best Buy?

Because that is one of the least pedestrian friendly walks in Dallas. I take the shortcut and walk through the drainage ditch on the N side of the train stop, then across a couple parking lots only to be greeted by the backside of the shopping center.