Game Xchange Owner Named Connecticut Small Business Person Of The Year By SBA
Businessman Chris Runyan isn't one to follow a trend. In an online, downloadable world, he's built a successful brick and mortar business. And, in a time when companies are moving out of state, he relocated from Arkansas to Connecticut to do it.
When Chris Runyan moved to Connecticut in 2009, he came with the intention to start his own business. He said, "My goal was to get six stores on the ground in three years."
The store Runyan wanted to open here was Game Xchange, which buys, sells, and trades video games, movies, and accessories. It's a franchise of sorts- There are more than 50 stores nationwide, most of which are located in the midwest and southern US. Runyan knew one of the corporate owners back in Arkansas, and when his wife accepted a job in the Northeast, he proposed the idea of bringing the brand to new territory.
"With that relationship, I knew the stores, how effective they were, and the success he was having, and expansion," Runyan said. "I needed something to do, coming up to Connecticut, and I thought it was a good fit."
The owners agreed, and Runyan bought into the business. With any retail store, location is key to success, but when he arrived, he still had very little sense of Connecticut's cities and towns. "I spent a long time just driving around to all the communities in Connecticut," Runyan said, "so now I feel like I've lived here my whole life."
In the South, there might be long hours of driving between population centers. But here, Runyan's potential territories are much closer together. He chose Orange as the location for his first store, and opened in the spring of 2010. He found being in the Northeast wasn't a barrier to success. "Luckily," he said, "when I opened Orange, it's grown into the top five, top six store in all of Game Xchange."
The video rental business has moved almost entirely online in recent years, and game sales may be heading that direction, too. Runyan says his customers have made the store a destination for those items, and will often come to browse. "I love to see it when people come into the store," he said, "and spend not five or ten minutes just coming in and grabbing something and leaving--but spending 30 minutes walking around the store, talking to the staff about the movie that's coming out, or old movies that are classics. Games as well."
Enough customers have found his business that he's been able to meet his goal- his sixth store in three years opened in Hamden last month, just as the federal Small Business Administration recognized him as Connecticut's 2013 Small Business Person of the Year. He now employs almost 50 people in the state. But in the beginning, despite a business plan that has turned out to be solid, Runyan was turned down by every bank he approached.
Buck Harris, of the Connecticut Community Investment Corporation, said, "In the current market," Harris said, "most banks will not entertain a startup loan." He says Runyan's recent relocation, and the fact that he didn't yet own a home in the state, also counted against him. "He had property back in Arkansas," Harris added, "but nobody wants to attach collateral that lives in Arkansas to a loan that lives in Connecticut." But CTCIC exists for exactly this sort of situation.
"We're really here as a safety net to catch businesses that can do what Chris's did," said Harris, "where we think it's a good bet, even though it doesn't fit in the mold or criteria of banking." To them, what had concerned the banks was outweighed by other aspects of Runyan's circumstances. His wife had a steady income from her job, and he could use the store's inventory as collateral. Harris continued, "The other thing Chris brought to the table is, from a character perspective, he just clearly demonstrated that he understood his business model, and that he was going to work his butt off. So when we see that kind of fire in someone's eyes, and the smarts to go with it, then we know we've a great opportunity and so we got right behind it."
CTCIC worked through the national microloan program, which covers loans up to $50,000. Interest rates, currently just over eight percent, are higher than you might be offered by a bank, because of the additional risk. But CTCIC also provides business analysis and support throughout the application process and repayment period. Harris said, "From marketing to financial planning, that type of free expertise is critical to the growth of a small business. Chris Runyan is a great example; we've got him three or four different loans in different ways to leverage the growth of his business."
His ability to get those loans has gone a long way toward counteracting some of the more challenging aspects of doing business here in Connecticut.
Runyan said, "If I wasn't able to do that, I might be sitting at three stores instead of six, to be honest with you." His expenses run 25 to 30 percent higher than the other Game Xchange stores around the country, thanks to Connecticut's higher rent, utilities, and labor costs. But he doesn't intend to stop growing here.
Runyan isn't sure which part of the state will get the next Game Xchange, but he sees room for six to ten more stores in Connecticut. He said, "If I stop, then I don't have any other way to promote any of my other guys, so if I continue to grow at a rate of two a year, then that allows for the people that work for me to have a growth path as well and have a career with us."