Hi Seamus and Congratulations!
Sounds like you have a great opportunity and you are well prepared,
even if under-funded. It’s a long hard road you have decided to
travel, but it’s rewarding. Looking back at the good advice I was
given and things I’ve learned the hard way I would advise these
Develop a plan. Consult with the Small Business Administration for
how to get a business plan together. Figure out what kind of business
you are going to build and what you’ll need to do to survive the
first years and live within that. Set up a spreadsheet that will
allow you to play what-if and worst-case scenarios and play with it a
Avoid spending money you don’t have. Unless you know for a fact you
can turn something pretty quickly, get it on memo, consignment or
with a return option. Avoid buying anything you can’t pay for in
Don’t worry too much about your inventory, at least to start. Take
photos of everything you make or restore. Use that as a "virtual"
inventory. Keep a few pieces of your signature look and of your
specialty work in the case, but don’t go overboard. Loose stones
don’t sell well at retail so don’t put a lot into that category until
you can afford to take the money off the table for a while. Apply the
thirty day rule here, and use your what-if / worst-case spreadsheet
to help you figure out what you are going to do if something
expensive doesn’t sell the way you think it will.
Run your business off of the profit margin, not the terms. Pay off
your sales tax and large purchases as soon as you get paid. If you
use the proceeds from a big diamond sale to pay the rent, counting on
another sale next month to pay for the diamond because you still have
thirty days to pay, you can start to fall behind, especially if next
month’s big sale never materializes. Once you get behind, it can turn
into a death spiral as you begin to rob Peter to pay Paul (or as Neil
put it, you start drawing names out of the hat). An honest
reality-based session with your spreadsheet will demonstrate the
dangers of this practice very graphically. This scenario is very easy
to fall into, almost impossible to get out of and has destroyed many
otherwise viable businesses, some of them big names you would
recognize. Don’t let it sneak into yours.
Be ready to live on the cheap. Don’t expect to be able to take any
money out for at least several years for anything above mere
existence, let alone for anything resembling fun.
Get David Geller’s Blue Book, and use it. Remember that wholesale
work is driven by price and retail is driven by trust. Don’t confuse
Treat each and every customer as though they are the most important
person to ever walk through your door. You never know ahead of time
which one will be.
Do the very best work you can. Give the customer more than they
expect and make sure they know. Bill’s advice to reprong four when
you charged for two is very sound, and as he says, make sure they
know exactly what you did and why. But at the same time, be careful
of surprising a customer by overstepping. They may not view a
complete restoration of Grandma’s ring quite the same as you might,
especially if they just brought it in for stone tightening or sizing.
Keep your shop clean and give tours. Show off your tools, your skill
and your knowledge. People are going to be more interested in knowing
that you can do what you say you can do and in how you do it than in
buying things from your cases, again at least to start.
Give your customers a reason to go out of their way to search you
out. Sounds like they are going to have to anyway. Give them a reason
to tell their friends to go out of their way too. The only
advertising that consistently works everywhere and every time it is
used as a fundamental strategy is word of mouth. Remember word of
mouth works even better in reverse. Bad word travels even faster and
more powerfully than good word.
Treat advertising as though it’s a deep dark hole that will never
re-pay you a dime and you will never be disappointed. If you can’t
afford to gamble on what will and what won’t work, be very careful
when spending money on advertising. What works in one market or for
one business may be a bust for another. People that sell advertising
more often than not have their own best interests at heart, not
yours, contrary to what they will tell you. Yellow Pages ads come to
mind. This is also true of most others that charge a fee to "help"
you market your business. This is another good example of where the
worst-case spreadsheet can be useful in the decision making process.
Get addresses, phone numbers and e-mail addresses from everyone that
comes in the door. These are people that already know where you are
and what you do. Target your marketing towards them.
Never, ever give anyone reason to distrust you. Mistakes and bad
things happen. When they do, own up to them, as quickly and as
honestly as possible. Never defer responsibility for something
negative, even if it’s not your fault. You must take ownership and
responsibility for everything that happens with your business. Good
But the best advice I ever got for business or life in general was
this - Do what you say you are going to do when you say you are going
to do it.
Good luck and keep us posted,