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Increasing business


#1

Hi all,

I have enjoyed reading the orchid postings over the past 4 years and,
although I have been unable to contribute much, have truly gained a
wealth of knowledge from the many talented people that do post. I am
at a point now that I hope some of you can offer some opinions based
upon your experiences that will help me and possibly a few others. I am
a self taught goldsmith with about 8 years of experience. It started
as a hobby, while I was working in the electronics industry, with
hopes that after retirement I could work at it to supplement our
retirement income. My wife and I retired about 4 years ago and moved
from New Hampshire to Florida. We worked very little with jewelry
down there and spent most of our time caring for elderly parents. We
have recently moved back to New Hampshire and, out of financial
necessity due to differences in the cost of living, decided to really
put an effort into the expanding our jewelry business. Now comes the
questions. We are currently and have always worked out of our home.
We have a customer base of about 125. We feel that to grow our
business, we either need a small studio or storefront to increase
retail sales or start to sell wholesale to the other shops in our
area. I guess I am interested in the pros and cons of the two paths.
As a secondary issue with the studio/storefront, what is the bare
minimum needed for square footage and the cost (and any sources) for
outfitting (display cases, safes, etc.). Another possibility: Is there
a way to grow the business at home? We are somewhat concerned about
the security issue with regard to advertising. We are also interested
in how others have kept the “home business” separate from the “home”.
Any opinions, comments, suggestions on this issue would be greatly
appreciated. I, as many of you, am interested in trying to making a
decent living at a trade that I have found extremely rewarding. We
don’t want to become so busy that the reward becomes a chore, but we
do need to increase our level of business. Thanks again to all.

Jim Papuga Spirit of New England Warner, NH


#2

Jim, You have asked a whole slew of questions here and I am sure you
will get many responses. I will just try to talk about the issue of
opening a retail space. There is no minimum square footage (witness the
rise of all those shopping cart type things in the middle of malls)
but it does depend on what you want to do in the space. If you need a
workshop area as well as the retail sales area you have to take that
into account. We have 500 sq. ft. with just slightly less than half
of that as retail display area. We have three to four people working
in the entire (both display and workshop) area all the time and it
does get tight in there. However if you plan to only have one bench
set up you can get away with less work area. Obviously the bigger the
space the higher the rent so it makes sense to go with a smaller
space if possible.

The cost for outfitting a new retail space is also quite variable,
however when you take the following into consideration I think you
will see that there is no way it is going to be cheap. You will need
at least a first and last month’s rent. Many landlords require more
than this. You will need to plan on construction expenses from $5,000
to $100,000 depending on what you are left with by the last tenant and
what kind of place you want to present to the public. Landlords rarely
pick up these kind of expenses (although if you can find an
economically depressed area they might–but then your clientele won’t
be too high end either). You will need a good safe–used $2500, new
$5000 and up. You will need insurance, phone deposits, electricity
and gas deposits. You will need display cases (I would look for used
ones and plan on fixing them up yourself–that is probably the
cheapest way), chairs for the customers, a gemological set up (if you
are serious about the way you are going to sell the stuff and you want
to present a professional appearance), lighting (plan on $2000), an
advertising budget (they won’t know you are there unless you tell
them), business cards, stationary, a computer, fax machine and
whatever bench type set up you need. Don’t forget that you will need
inventory to stock the store as well. Bottom line is that you
probably need a good $50,000 to get started and that won’t buy you
nearly everything you need. About 7 years ago we priced out opening a
second store (and we didn’t need inventory as we are always well
stocked). We figured we needed about $100,000 including a reasonable
start up advertising budget. That however was 7 years ago.
Everything is more expensive now. We also were planning a fairly low
key display area. These days many retailers are spending a small
fortune to make their stores look incredible and if you are going to
compete with them you have to look nearly as good.

Incidentally, you can’t forget that after the initial layout of
funding you still have to pay the rent every month. It will take a
while until you actually have enough customers to pay all of your
monthly expenses so you need some backup funding as well.

Have I discouraged you yet? Don’t be. With a little ingenuity and
some money you can get the place up and running and, if you are good
at what you do, you will make money.

Daniel R. Spirer, G.G.
Spirer Somes Jewelers
1794 Massachusetts Ave
Cambridge, MA 02140
617-491-6000
@spirersomes
www.spirersomes.com


#3

Jim, Your questions are well stated and obviously you have done the
research to bring you to this point.

First I would ask “who is my audience”. If you live in a high
traffic area with lots of people, then a storefront makes great sense.
Cases and lighting can be done rather inexpensively as used ones will
suffice nicely. Everyone knows somebody, which is how we got our
cases. Our retail business generates about $300-500 gross a month.
Christmas is usually around $2500. Since we only take 40 percent,
this is not enough to live on which is why the school drives the
income pump. We are now phasing out a lot of the jewelry which doesn’t
move to supplies for the school - sawblades, solder, metal, etc.

If you have your studio at home, I would suggest creating a space
which is really separate from the rest of your house. I have had my
studio in my basement, a studio which was a 30 minute drive and my
present studio, two miles away. The latter is the ideal situation.
When I am at home, I don’t think about work (well not too much, the
computer is there!), but when I am at Metalwerx, then it is all
business. Another consideration is insurance. You can get an
insurance rider for the compressed gases and if you decide to go the
home route, investigate this thouroughly. You can deduct your studio
from your taxes, but come time to sell, you must pay capital gains on
that portion of the house. I am partially deducting my office and my
spare bedroom at home for business purposes. The spare bedroom is for
faculty who stay at my house during workshops. Security is another
issue, which again, I would talk to your insurance agent.

With regard to the square footage, it seems to me, that no matter how
large your space is, you will always fill it up. Efficiency is the
name of the game here. When we moved from our little 450 sq ft retail
space to our cavernous 1800 sq ft space, I thought we would never fill
it completely. Hah! Now we are searching for 3500 sq ft because the
business is growing so fast.

Although having a retail section is great exposure, it is a total
time sump. If you have somebody in place to talk to your customers,
answer their 80 million questions, help with their decisions, etc.,
don’t expect to get any work done. Care and feeding of a retail space
is like a small child. Inventory has to be moved around regularly or
it gets stale. Glass has to be cleaned several times a day because
every person who comes in, leans all over it. When a customer comes
in, pieces are dragged in and out of the cases, it never stops.

If you have a solid customer base, I would spend my time building and
cultivating new customers. If there is anything I have learned over
the years, selling jewelry and classes is about 20 percent product and
80 percent marketing. The competetion is so strong out there for
selling jewelry, and we were lucky to find a niche market and offered
something that nobody else has. Lots of people sell jewelry, but who
really in their right mind would build a school with world class
instructors. This job consumes me, but I love each and every day.

I wish you the best of luck. I was so glad to have Orchid in place
when I started my business. This forum of caring and supportive
people is what has made Metalwerx where it is today. Stay in touch.
Ask questions and bug everyone. And let us know how you are doing and
where to find you if you do decide to do the retail route.

-karen


#4

Jim, Mr. Spirer has given you some very valuable and accurate
as to estimated start-up costs, and the only thing I would
add would be to think twice before you try to enter the retail arena
on a shoe string. The competition is fierce, and you must make a
solid impression on the customer before they will place their trust
in you and spend their dollars.

I went into business some twenty two years ago in the same manor, and
succeeded only because I had no competition, and was well known in the
small community. We bought our own building in 1992, and invested
over $100,000 before re-opening. We carry about $200,000 in inventory
at cost to support $350,000 in annual sales.

If I can offer any other info, please feel free to contact me
off-list and I will tell you anything I can.

Jon Michael Fuja


#5

One thing you might consider is joining NH Craftsmen Association &
using their store to sell your goods if you are doing original work.
Also consider trying some of the Craft Shows & Cultural Events that
allow merchanting. This would keep your overhead down & expand your
customer base. Then there is always the possibility of consignment in
diffrent shops. In NH one of the best spaces available are the “Art
Mills” I know of 2 in the Wilton, NH area & have seen them other
places as well. They are old Mills that have been subdivided into
studios for artist where they can both work & display their work for
sale. Two of my friends, Linda & Dennis Anfuso, were doing this before
they bought their store on the Millford Square (Over The Rainbow-which
they have sold due to health problems) Another avenue I am looking at
is setting up a web page. Good luck with your efforts. Jim Revells
Olaf’s Plunder Sudden Service #5


#6

Hi all,

Thanks to those who responded to my post. I must say I was hoping
for some different info, but was not surprised. I can understand that
having the type of capital Mr. Spirer and Mr. Fuja referenced helps to
insure that success is at least reachable. I was hoping that there
were some out there that had started with a little less capital
outlay. Anyway, we’re not discouraged, and do plan to move
forward…just not sure of the direction at this point. Thanks
again…

Jim Papuga
Spirit of New England


#7

Try looking at Preston Ruether web site@ www.wire-sculpture.com / He
has that would help any jeweler to make more money. He
also has some video’s you might like. They are costly, one is $97.00
but worth every penny of it. the are also some less expensive ones.
They are based on his own experiences. Couldn’t hurt to check, he also
has links to other places you can go for

Norma


#8

Hi Jim,

I’m probably much in the same situation as you. Early “retired” in my
late 30’s to pursue my dream of being an artist, or artisan,
specializing in metalsmithing and gemstones… predominantly jewelry.
I’ve never worked in a commercial jewelry or retail environment, but I
have strong customer service and people skills.

I have had to reel myself in from the dream (and anchor) of a retail
storefront. I feel the need to walk before I run. Maybe someday I can
justify the overhead, but I feel the need to develop a significant
and compelling following before I take that big leap.

I am in the process of applying for a number of shows. I am putting
together displays and ordering display cases. I’m having professional
photos taken of my work and trying to gain the visibility I can.

I have had a Web site for a few years as I “ramped up” the business.
While it offers some encouragement and revenue, it has yet to fully
pay for itself or be profitable. I am confident as I start
establishing a physical presence, a synergy will develop between my
show schedule and my Web site.

If I saw the “perfect opportunity” to open a retail establishment I
would jump on it, but given the reality of today’s market, I am
exploring low-overhead sales and marketing opportunities before having
the pieces in place to commit to large capital expenditures.

I’d rather be “busting at the seams” to contain my existing business
than discussing the state of the stock market with the crickets in my
store. “Seize the day” works in the movies, but I need to seize them
for quite a while to come. I’d love to be more bold… it really is my
style… but I need to be more pragmatic if I hope to be successful
in this venture.

This is the state of my thinking a the moment, with the Allman
Brothers pouring in to offer me words of encouragement and
consolation.

God bless the artist,

Dave

Dave Sebaste
Sebaste Studio and
Carolina Artisans’ Gallery
Charlotte, NC (USA)
dave@sebaste.com mailto:dave@sebaste.com
http://www.CarolinaArtisans.com


#9

I am currently reading his E-book “insiders guide to selling”. And I
can tell you from my own experiences at shows, that the information
in it is right on the mark. Very well written and useful information
over 100 pages. You do need Acrobat Reader to view it tho.


#10

Dave, Despite all the expenses I listed in my discussion of start up
costs for a retail location it can still be the best medium for moving
your merchandise. Having a retail store adds an air of legitimacy to
your work unavailable through any other medium. Within 6 months of
having a retail store front we had developed more regular customers
than we had during five years of doing craft shows. They were also
all willing to spend more money than the ones we had developed at the
shows. You just need to have some financial backing to get going.

Daniel R. Spirer, G.G.
Spirer Somes Jewelers
@spirersomes
www.spirersomes.com