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Opening my first comercial location


#1

I love this ganoksin!!!

Im about to open my first commercial studio. the location is on an
off road to a very busy main street in a large city, in some ways
sorta hidden off the main road.

rent is like 1000$ per month and it zoned residedential/commercial,
so i get to live in the back!~! yay! “eyes roll” l ill do anything to
make this work.

i have worked for many goldsmith shops (mall repair shops,
production shops, custom type shops…ect (no high tho) and thought
id try working for myself…iv got good hands and a staight eye. i
have a few contracts with some big chain stores to keep 25 % of a my
work week busy… and keeping work 2 days a week with a local shop.

iv have saved up many tools and displays ect… to provide a "very"
functional goldsmith shop. including matrix and a revo mill!!!

weve worked hard to to pay off this machine and were almost payed it
off. ( my girlfreind is a goldsmith as well and will be working in
the shop with me at night as she has a day job…(working on our own
lines)

the kicker is iv no money saved up. and no purchased wholesale
jewellery inventory. Just some of my own lines to lightly accomodate
the displays

“my question to anyone out there who has tried this… is there any
advice you can give to a newbie” in this senerio…

what advice can other goldsmiths out there give me to make sure i
have success??


#2

Congrats! What’s the name of your new venture?

Get ready to work…a lot. Laugh at the bad times, sing during the
good times. Find a good bookkeeper, a good tax accountant, and a
good lawyer. If you love what you do, if you have passion in what you
do, you will not fail. You might fall on your butt, but get up, dust
yourself off, learn from the experience and move on.

I have been a proud Orchidian for 10 years now. This is the place
and these are the people to learn about how to do things, how not to
do things and this place is the most special place on earth.

Welcome to the sandbox.

If I haven’t thank you lately Hanuman and Ton…thank you.

k

Karen Christians
Waltham, MA
http:www.cleverwerx.com


#3

Seamus, congratulations!

I’ve owned four retail jewelry stores. They ranged from miserable to
pretty darned good. Currently, and finally, I’m experiencing the
latter.

Given that background I will say that your primary job in the
beginning is to avoid failure (duh! but its a very active job). You
can’t make a million until you’ve made a few hundred thousand. So
don’t over spend trying to ‘look good’. Focus on short term profit
while also keeping in mind longer term goals. You’re off to a good
start with the low rent and a second income for the family. Don’t be
too eager to jump to phase two, although its hard to resist. Get a
good solid foundation, build your customer base, start with
basics(they’re safer). Remember that the market for wizbang jewelery
is smaller and more difficult to capture. It takes time to develop
that. In the meantime you need turnover.

You need goods. Whether you manufacture all your own product or buy
some finished. Resist getting involved with big, long term debt. Keep
yourself flexible. You need to adapt to the market which has not yet
defined itself to you. The same guy in the same town doing the same
thing might not get the same crowd once he’s on his own. You don’t
want to be sitting on a large inventory that does not move.

As much as you can pay COD or pro forma. Right behind that see if
you can get short term credit arrangements. What a lot of suppliers
are doing now is accepting a series of post dated checks. You can
tailor the monthly amounts to something comfortable. This lets you
build inventory without having a balloon payment in January(for
example). You will build your credit rating because for sure you are
going to cover those checks. With an open account sometimes you may
delay sending payment. This also relieves you of some book keeping
and the anguish that sometimes goes with it.

Old jewelers’ joke… Mom and Pop jewelry store routinely puts its
payables in a hat, draws several out and those are the ones that get
paid that month. Bill collector comes in one day and strong arms the
owners for a check, the owners take offense. Pop says, “I don’t like
your tone, if you’re not careful I’ll take your name out of the hat”.

Which of course is disastrous.

Contact me off list if you’d like, so I don’t have to bore the forum
any longer.


#4

Hey Seamus,

Good for you! Re: filling the cases without much inventory… a
couple of ideas. You can put emphasis on custom work - put displays
of waxes, etc. in your cases. You can allow other craftspeople to
display their work (you can exchange ‘case space’ for them working
the register PT). You can take in consignments. Emphasize your
signature look, whatever that might be.

In addition I am assuming you will be taking in repair work. You
will need to find ways to advertise on the cheap. Smaller town
newspapers for example, allow ‘press releases’ and this is one idea
to get your name out there. I have considered printing up coupons and
dropping them off to a wide variety of stores where I believe I might
develop a customer base. For example any department store that sells
the second rate stuff but doesn’t do repairs. Kohls is an example in
my state. If you have a laser then all the local opticians could get
coupons. Or even if you have braising skills. Anything to get your
name out there. I believe that people are always looking for a good
place to get repairs done - if you do good work at a fair price then
you just need time on your side to develop a client base. In my
store we have both (a) lost work to a place doing it for less money
and, (b) got those clients back, and more, because their workmanship
was poor. One P.O.'ed customer will equal three or more you will
never see.

It sounds to me as if you have all the seeds of success, especially
where your shop rent = living space. Plus your girlfriends a
goldsmith? You’ve got it made. Get your name out there. Hire kids to
go door-to-door with flyers in the immediate neighborhood, whatever
it takes. Also I notice a lot of jewelers are ‘sloppy’ when it comes
to an online presence. You can develop a cheap website for around
$120/yr via Network Solutions. Very easy. Get yourself listed on all
the ‘jewelry repair in my area’ listings such as MSN City Guides.
Hand out business cards every chance you get. I know one successful
sales guy that includes cards with his utility bill payments - and
has gotten sales from it.

Keep the faith!
Pete


#5

Sorry for the late reply to this one. I just opened 2 years ago with
basically no cash, I did have some inventory and custom jobs to
start, and good credit. Which we used the first year, a lot. I opened
in a really neat town on the main street (high rent) but it paid off.
When you are in an office or off the main street location you need to
advertise more than on the main street so your cost per month are
about the same (my opinion). I would find a location that has good
walking traffic if possible, not people walking to get to work but
walking to shop, big difference. Also in an area of town where the
money is or tourist go or both which is ideal. The old saying
Location Location Location really holds true. Be different, if you
are not there is no reason for someone to come in. Have good
lighting, Good Luck and push repairs, do it better than anyone and go
the extra mile, if you only charged for 2 new prongs and it needs
more do it anyway and let them know. It will pay off.

Bill Wismar
www.metalbendersgallery.com


#6
When you are in an office or off the main street location you need
to advertise more than on the main street so your cost per month
are about the same 

Yes that’s true, give or take. But, if someone is undercapitalized,
the business will need flexibility. If you are locked in to a fixed
recurring cost, like high rent(or high payables), you either make the
payment or sooner or later fold. Advertising for an off street
location let’s you choose how your dollars are spent and when. When
you find the media that works you can power it up and dump the non
performers. You cannot dump your rent if your results from simply
being there, aren’t what you expected.

I can attest that a prime location does not necessarily translate
into sales. All the traffic going by does you no good unless they
come in and buy. On the other hand, advertising by itself does not
necessarily lead to sales. So if you have two iffy choices, the lower
cost, flexible option may be a safer bet, particularly in the very
early stages.

Over the years and reincarnations I have paid as much as $6K monthly
rent for what was considered top location in town. Yes we did good
volume. But it was not profitable long term. Lesson learned… volume
is not profit. If I told you my current rent for this off street,
humble location you’d not believe me (I still have trouble believing
it, I’m making the biggest sales of my life with virtually no ad
budget so apparently the clientele is not put off by humble
location). But this time the deal is profitable.

I’m not saying Main Street is bad, far from it, it can be dynamite.
IF you are well capitalized. You need all the things($) in place to
facilitate high sales and high profit to sustain a high rent. And you
have to hit the ground running. That means big inventory, good staff,
nice showroom, and your going to have to advertise big anyway,
because there’s more at stake. Unless you have plenty of cash on hand
and can afford to not see it come back for awhile, you might be
tempted to over-utilize credit, big mistake IMHO in the start-up
phase. Angry creditors can put you out of business.

CAN someone do well on Main $treet without a lot of capital? Yes,
but its not automatic. But then, its not automatic even with the
capital. There are no guarantees in start-up, even when everything is
in place and looking good, some unforeseen entity/event/circumstance
can screw you up.

That being said, every now and then I think about moving back out on
the street on the notion that if I’m doing well off street maybe I
can do really well back out front.

I just realized I must sound all I, Me, Mine in my posts but that’s
all I can relate, my experience. Sorry.


#7

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
things:

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
lot.

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
thirty days.

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
the two.

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
and bad.

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,

Dave


#8

When I first opened Metalwerx, we were a combo retail store, custom
commission and small school. We taught only a few classes back then.
Our retail cases were on rollers.

We were on Main Street next to a sub shop and a place for
acupuncture. There was another jewelry store down the street which
sold more conventional stock like gold diamond rings and chains. We
didn’t. We were from art school and in a town with 7 pizza parlors
and 12 nail salons, our totally cool and unique collections went way
over the heads of the kraft klientele. Some folks got it, and we sold
more retail to our students than people off the street.

We moved across the street, upstairs with a larger retail space and
larger school space. Finally, we closed the retail altogether, as
concentrating on getting top notch instructors took precedence over
top notch retail that nobody understood. Tough to sell art when our
shoppers wanted Beanie Babies. Our landlord also did not provide air
conditioning, and it’s hard to sell work when you have to climb
stairs and into a sweltering 105 F atmosphere.

You might have the prime location, but it will depend a lot on what
you have in your stock and who is the audience. Advertising is a
tough call. Ads are really expensive. We found that writing an
article about what did and submitting it with pictures to a local
community paper did wonders.

-k


#9

Hey Neil- I read your posts avidly-especially lately as we are
eventually going to go down to street level from a 3rd floor
studio/showroom situation. What you’re saying makes a lot of sense-
especially the bit about volume not necessarily equaling profit. Just
wanted to say thanks for putting your experiences out there!

Rona Fisher
ronafisher.com


#10
I read your posts avi 

Shhhh, you’ll only encourage him.

Some years ago I read an article that stated that entrepreneurs often
feel like they need certain trappings as a measure of
success(reflective of our society in general, perhaps). Fancy office
with mahogany desk, beautiful showroom, luxurious vacations, blah
blah. I realized that was ME! It took a few more years of ruminating
over that before I changed my way of thinking and consequently my
way of doing business. Its expensive and not necessarily profitable
to have those trappings. Its often said that image is everything,
I’ve said that myself here. I think more importantly its the product
(Whether that product is an item in the case or a service
performed). Image will get you new customers. But if the product is
counter to the image, repeat customers might be scarce. If I had the
capital I’d do both…fancy image backed up by excellent product. But
I don’t. So I go for the long haul.

See, I warned you.