Selling in hobby and game stores

Agreed. Here

to me, the 'promotion' Foolster mentions sounds like a good business plan. that's my plan if I can ever actually get one of my games past the half-way point :)

I think XXOOCC is talking specifically about a business plan in terms of the future of your business.

Here's a few questions that'll narrow things down..

How much capital will you have to start your business?

How much of that will be borrowed, and when will it have to be paid back, and with what interest, and what collateral did you put up?

Do you have any investors?

What kind of company will you create (corporation, LLC, partnership, sole proprietorship)?

How much money are you budgeting for game artwork, layout, and production?

How much money are you budgeting for marketing?

When do you plan on your company becoming cash-flow positive?

Can your company handle being in debt for a few years?

Most importantly, where do you see your company in five years?

And with the above questions in mind, what steps can you take to make sure you'll be there?

I don't mean to sound harsh in this post. In fact, I don't see anything unrealistic in starting a game company... IF you have a solid business plan that you can execute.

I'll tell you about what got me started and where I am right now... I originally envisioned designing a single game (my very first design, mind!) and selling it for a tidy profit. If I made enough money from the first game, a few thousand dollars perhaps, maybe I'd design another one.

Hah! My first design was, as most first designs are, as fun as a broken rolling pin. And the more I read about the game design business, the more I realized that I needed to de-emphasize "game design" and emphasize "business."

I started designing games under the impression that I could sell a few to provide some nice supplemental income. That might still be an attainable goal, but looking at the business side, I was wrong to assume that if I started selling my games, I'd be able to lock down a few extra thousand dollars a year. The way I see it, once you "get serious" and start selling your games, you've created a monster in your basement to whom you're going to be sacrificing lots of time and money. If you're not careful, this monster can eat your home and negatively impact your life.

But if you go into it knowing what you're doing - and that you understand that as long as you own your company, there's no "magical moment" when you become profitable and can sit back and relax and let it make money for you, that even in five years, you still have to feed the monster, and figure out how to pull in enough cashflow that you have something left over to feed the monster next quarter - I believe that you can make money doing this. Maybe not a great deal of money, but a profit is a profit.

I'm sure you've heard the discouraging stat about new businesses, about how many fail in their first year. I'm sure many of them are people who jumped in without a business plan, thinking if as long as they were a seller and there were buyers around, the rest would take care of itself. That was my thought going in, and I'm very grateful that somebody didn't drop ten thousand dollars in my lap back then, because that's ten thousand dollars I'd have kissed goodbye.

What I'm doing now is designing games for the fun of it. I'm not ruling out the possibility of eventually selling them, but first I need to learn how to run a business. Once the ideas of setting an advertising budget, raising capital for investors, and preparing my quarterly taxes don't make my palms sweat, then I know I can start taking some steps. By the time that comes around (if it ever does), maybe I'll have a few designs ready. Maybe by then I'll have taken them around to agents and publishers first.

The way I see it, game design is a hobby for me. I find it a lot of fun. If, with work, patience, planning, and some capital, I can get some income from it, all the better. But if the business end kills the fun in game design for me, then it would be a mistake for me to have started it.

In the end, I can't help but quote Reiner Knizia from this interview, about how he started designing games professionally after he turned forty...

All I ask is that my game designs make me, in Reiner's terms, rich. The kind of rich that, in Reiner's terms, "has nothing to do with money."

~Gil