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Time to pass along what's probably the most important reason for seeking out shops that have established themselves in this industry and have been able to withstand the early growing pains. It's something we hear over and over again, and something everyone needs to be aware of.
It's the simple fact that most businesses lose money in their 1st year of business. Whether we're talking about a candy store, or an offshore bookmaker. Setting up shop is not the immediate cash cow that some would have you believe. It may in fact turn into a cash cow down the road, but definitely not early on.
Which is why you need to be careful when choosing who to do business with.Again,it's not to say that a new book doesn't deserve a chance to make it in this biz,but let's not forget that as much as that book deserves a chance to make it,YOU deserve an opportunity to play at a shop that has already made it. It's your hard earned money we're talking about here.
Having had the opportunity over the years, and more importantly recently, to sit down with people in this industry and discuss it at length, I can tell you that one of the comments that's repeated the most often, by several different people, is "There were times when we'd go to sleep at night, not knowing if we were going to be able to pay off today's wagers".
That's the cold, hard reality. We could sit here and sugar coat everything for everyone, and make it seem as though everything has always been ok with everyone, but that's not what we're about. Again, that comment doesn't come from one particular shop, it comes from many.
Remember something else. When these shops came in, there was much less competition, yet they still ran into potential trouble. These days ,there's 5 times as many books as there was then.
How could this have happened? There's several contributing factors. One simply being that they came into the business under funded. Many scrapped together all they could, borrowed from friends, etc. etc. Raised a couple hundred thousand, and rolled the dice. Others came in with plenty of cash, one instance about 5 million, which quickly dwindled to 1 million in no time at all.
Another contributing factor is when they started. If they opened shop during baseball season, or mid hoops season, chance are that they'll already be starting behind the 8 ball once football rolls around. A bad football season, WHICH CAN HAPPEN, and they're cooked.
In many cases, these places were able to bounce back solely due to the fact that they had other resources with which to get access to funds. The question you have to ask yourself is, does this new shop I'm dealing with show signs of being well backed financially?
Once these shops get over that hump, they are very profitable, don't take this the wrong way. But it's quite obvious why it takes time to get over that hump.
Some shops start up offshore with existing clients from wherever they operated from before, but those shops are in the minority. Most start fresh, and in order to start booking, you need customers. Well, the only way to get customers is to advertise, so..........half a million dollars later, you've built yourself a nice little handle. Unfortunately, with that nice handle, comes the hiring of more employees to deal with them, thus increasing payroll, and equipment. The phone bills increase, and then there's bandwidth, which may as well be gold.
Then of course, many go through a little initiation with the wiseguys when they first open up .These guys come in and rip your heart out and hand it to you on a silver platter a few times, before you even realize what happened to you."Wow, you mean bookmaking is actually a skill?" It's an expensive lesson, but a necessary one.
Let's not forget, if you're operating on the Isle of Man, or Antigua, or similar locations, there's a hefty fee, due annually simply for the right to do business there.
These obstacles can kill a book if they're not prepared. Again, after a year or two, once all of the above are in check, THEN you can start thinking about really making some money if your a book.
It should be noted that many of these places are so professionally run, it would really blow you away. These shops have records of every little detail you can imagine. They have records of each and every customer complaint that was ever logged, and what the outcome was, whether it was decided in the customers favor or the books favor. In other words, who was at fault. It should come as no surprise that the majority of the mistakes, disputes, etc, are the fault of the player. For example not listening to a read back or whatever. But what should also be noted, is that the majority of these disputes are decided in the customers favor, even though in many cases, they are at fault.
These shops can tell at the click of a mouse, where every penny is being spent, advertising, phones, etc. etc. etc. It's a helluva lot different than Joe the bookie at the local gin mill. Very detailed records are kept. These places are without a doubt maximizing their potential with good sound business practices that would make any Business school professor proud.
Yet even that isn't a guaranteed recipe for success. So please remember all of the above before you decide to send your lunch money to the Caribbean for vacation. Vacations are supposed to be round trip tickets, not one way.........