Wargames Debt

[Angel Barracks]

I wonder, in light of recent news, how many wargames companies are debt free?

[Whirlwind]

I thought most of the smaller ones were debt free because the companies owned all their assets and only expanded from the profits from past sales?

[McKinstry]

I think any small hobby business is a challenge as you try to move from a small one man(ish) shop to a full time multi-employee business, doubly so if a physical presence is needed either to sell or manufacture. Balancing growth with debt service kills thousands of businesses throughout the West every month and our hobby isn’t immune.

The tree of Life is self pruning.

[Darkest Star Games]

I don’t know about everyone else, but I sank my own personal funds into my company for everything at the start and occasionally throw more personal money in when I want a project done even if there isn’t enough in the business kitty for it.  I have broken even after all these years, but am just barely “in the black” at the moment.  At the moment my options for putting out new kit seem to be to either have a sale to try to generate purchases (as most sub-28mm companies seem to be really slow right now) or throw more personal money at it.  I refuse to get a bank loan, I hate owing any institution any amount!

"I saw this in a cartoon once, but I'm pretty sure I can do it..."

[Mr. Average]

Debt can be a very powerful tool for expanding a business but it has to have good prospects of return. It’s an investment, and, let’s face it, this is a very volatile small-scale luxury industry. I don’t run a game company, but servicing debt must be a very difficult thing to do with such narrow margins.

[Norm S]

Probably crowdfunding has resulted in fewer projects relying on traditional loans (with the burden of failure being passed on to the customer!)

[Phil Dutré]

Define “debt”. Debt for a company is not the same as debt for a private person. Accounting-wise, regulations might also be country-dependent, and bigger or smaller companies play by different rules.

[Mike]

Phil Dutré wrote:

Define “debt”. Debt for a company is not the same as debt for a private person.

Owing money such as a loan or unpaid invoices.
Not having purchased something from a supplier and having an invoice to pay in 30 days.

[Blackhat]

I would have thought that a lot of the smaller companies are not heavily indebted as they are small one man bands who are not limited companies.

The bigger ones will leverage debt/loans like any normal company for capital purchases and expansion.

When I bought Gladiator Games back in 2006 I used my own savings to do so and have not put any more money into Blackhat since and it has paid me a full time wage since 2008…

But I don’t have any personal debt at all (no mortgage, nothing), so I am very lucky to be in that situation.

 

Mike

[Microworld Steve]

I’m pretty much in the same boat as Darkest Star.  Initially it was my own investment, and depending on how much stuff  I want to release in a year, it continues to be partially funded by my personal funds.  The business can probably fund 2 full 6mm fantasy army releases, as long as they are physically sculpted.  Sometimes I just want to put out cool minis, so I just fund them myself.  I would never in a million years take a loan of any kind to release miniatures, if I am ridiculously lucky my releases break even in 3 years, but usually it is about 5.  Wouldn’t want to pay interest for that long 🙂

This year has been particularly slow for some reason, which will just mean less releases next year.

 

[Rhoderic]

Angel Barracks wrote:

in light of recent news

I need to ask because I’ve been away from the hobby for a while: What recent news? Did a company go under?

[Mr. Average]

Spartan Games, of Dystopian Wars, Halo Fleet Battles, and others, went bust on August 25, citing debt issues as the main causal factor.

[Rhoderic]

Well, hell 

[Author]

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