How much money would you need to start a good movie rental store? (1 Viewer)

[TreyP]

I got about a year left in the Air Force, and I'm considering every possiblity that interests me if I don't re-enlist. Anyway, one of the things I'm pondering is moving back home and opening up a video store. But I will say, that this isn't exactly at the top of the list, because I've seen a lot of stores open and flunk, but I've seen many succeed very well also. And I know it may cost a pretty nice penny just to start out with inventory and supplies.

Anyway, I'm just curious if anyone has any good estimates, I would guess that there are probably a few owners here who may be able to help me with this. Thanks.

 

[Bill Balcziak]

I've seen a lot of stores open and flunk...

That might tell you a lot about the potential for this kind of business. As in the coffeehouse business, every good corner is already taken for video rental shops. So, if you want to open a video rental shop, you have to find a location that isn't already saturated (good luck). Of course, you can buy an existing shop if you can find an owner eager to sell. (Odds are, though, they will believe their business is worth millions when in fact it is likely to be a month away from insolvency. That kind of makes it tough for you to make a good purchase).

I encourage you to get a job managing a franchise video rental shop (Blockbuster, Hollywood, etc.) to see how much you like the daily grind before you spend your money on a startup.

 

[Aurel Savin]

Trey:

Just to give you an idea ... as I was thinking about this myself a while back.

There is a great Video Store down the block from me that boasts the second largest selection of rentals in NYC. They were even written up in the NY Times !!!!

Great selection and great prices ... Guess what the owner is doing?

He is seling his inventory on EBAY one by one for huge profits as business is slow and 90% of the people only rent New Releases anyway, so he is basically turning it into another Blockbuster

And he is on a busy strip in NY .. I am not sure where you'd like to open.

 

[MickeS]

As long as you have a good and large selection of porn titles to finance your more "obscure" regular titles, you should be fine...

As for starting a busi8ness, I'm sure there are organizations, both private and city-funded, that can help you in your area.

/Mike

 

[Pamela]

Opening up a movie rental store is a risky proposition these days, with Blockbuster and the other rental behemoths. I live across the street from a mom and pop operation, and one time a friend of mine asked them about their costs.

The biggist cost is the lease on the store front and the cost of the merchandise. They have to buy the videos for $80 a piece. It's a one-time fee per video.I'm not sure of the price of DVDs, but I believe they said they were cheaper. Then there's the store displays and upkeep. Insurance. Cost of employees.

Unless if it's a niche store, I don't know if the movie rental business is a solid business proposition for the future. More and more people will be turning to internet rentals like NetFlix, or "video on demand" services from cable and satellite companies.

 

[Deane Johnson]

You might have better odds by taking your money to Las Vegas when you get out.

It's tough to start any small business, but the video rental business is very tough for the reasons stated in previous threads. We've all seen mom and pops going out of business far too often now. And they were already established.

We had a really good mom and pop near us who not only had a lot of videos, but also had 2500 laser disc titles, as well as being first to have DVD. They didn't make it.

You can't make it on obscure titles and other specialty items. There is just not enough traffic to pay all of the costs.

Deane

 

[TreyP]

As for starting a busi8ness, I'm sure there are organizations, both private and city-funded, that can help you in your area.

OK, so your saying I can apply for something to get money to start my own business, sort of like a scholarship or a grant, just not for school? Where do I go to check this out?

 

[Bill Balcziak]

I can apply for something to get money to start my own business, sort of like a scholarship or a grant, just not for school?

Generally no. SBA and similar "grants" are typically not grants at all but low-interest loans. They are intended to benefit people of limited means, minorities, women and others who might need a little help to compete. They look for innovative business ideas that help the community in some way. You will have a hard time getting an organization like this interested in a video rental business (been there, done that).
You're also in for an uphill climb if you intend to seek a bank loan. It's going to be tough to convince a banker you can compete with the big boys unless you have a rock solid business plan and some startup capital. A video rental store is probably the last thing the bank wants to lend money for.
Be realistic. Just wanting to start a business isn't going to get you very far. You need to really think this through and be prepared for a lot of rejection. Don't expect a lot of handouts or help. With so many video rental stores failing everywhere, why will yours succeed? If you can't answer that question--and back it up with facts and numbers--then you don't have a chance with the money people.
I wish I could be more upbeat, but you chose a tough business to get in to. You owe it to yourself to give it your best shot, but you have to be realistic to succeed.

 

[TreyP]

Like I said, this is just one of the things I was considering getting into. I also wouldn't mind opening a sports memorabilia/card store, but I'm not exactly sure if that would generate enough money to live off of. I also wouldn't mind a video game store, but I've seen many of those fall through too. Anyway, just things I'm considering. I actually could probably get an easy job just cause I have 4 years exp in networking, but I'm so sick and bored of working in computers that I don't know if I can keep interested in it for much longer. Especially with it changing all the time. Anyway, thanks for the input. Let me know if you have any other ideas.

 

[Aurel Savin]

Trey:

No offense to what you'd like to do, but all the different interests you'd like to start a business in ... EBAY has already cornered the market in.

With your computer experience you might want to start something on there selling videos/sports memorobilia/video games. If you are a good salesman and know how to write good auction listings and can get goods at good wholesale prices, EBAY is a good way to make buck and raise money to start an offline business.

You still did not mention in what city you are thinking to open?

 

[TreyP]

I'll probably end up moving back home to Biloxi, MS. But I have always loved the city life. I wouldn't mind settling down in Atlanta, but that is just a thought that probably won't happen cause I don't really know anyone in Atlanta or know the place all that well. I just been through there a few times and liked it. But anyway, back to the point, your right. So much of the business is online now I guess cause people are lazy (like me) and prefer to just order stuff from home in their underwear without even having to pick up the phone. I wouldn't mind doing that, but I would have to get into the biz in order to get stuff like that at wholesale, and I have exactly zero (0) experience in that. One time I ordered a couple things from this dude on eBay and I got to talking to him. Turns out he buys these pallets of overstocked and shipped in bad condition or packaging from Best Buy and Circuit City and stuff like that. I actually would really like to do that cause its easy and I could just sit at home with a digital camera and make eBay listings and make a lot of money by selling stuff at half price that I probably paid just 5-10% for. Anyway, I haven't decided that I am getting out of the AF, but I'd say the forecast right now calls for about a 60% chance that I will get out with the major factors being what my orders are. If I stay in, I get a pretty nice re-enlistment bonus of roughly about $38,000. I'll get half of that up front, and I'm tasked to go back to the middle east later this year in September, so if I re-enlist over there then every penny is tax free, then I can finally get out of debt. But honestly, I just don't really enjoy this military life, I mean its not horrible, and I take a lot of pride in being the the U.S. military (especially right now), but I just prefer being a civilian. Oh jeez, now I'm rambling, sorry I'm at work and pretty bored.

 

[Paul O]

Based on some of your comments it sounds like you may need some non-military work experience before trying out some of these businesses youve mentioned. I like the idea someone mentioned of first being a store manager - get to know how a business is run as an employee and then think about becoming an owner. You are on the right track though - do what you like and what your interested in and eventually you will be succesful.