alexseanchai | (no subject)

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I had a thought today, and I want to know whether, if I were to seriously pursue this thought, I'd be out of my tree or just out on a limb.

Opening a jewelry business. Like, an actual business. Borrowing startup capital, hiring employees, making a metric ton of inventory, storefront in the mall or downtown, the works. A particular storefront near my current place of employment is open, rent $650 a month, and I figure I'd want me and one employee to start at $15 an hour (and do not suggest lowering that number, that's only a little above a living wage) for forty hours a week apiece which comes to $4800 a month so $5450, materials could easily be another five hundred a month, so if I could get a loan for twenty thousand dollars (or hit up kickstarter.com for twenty thousand dollars) I'd have operating expenses for three months plus two thousand more to fix up the storefront with, and if I could pull in six thousand dollars a month I'd come out ahead. But I'd have to be very sure this would work for it to be worth quitting the state job, which I'd have to do to have the time and to avoid having the conflict of interest.

I keep thinking, Syn did it! I am trying not to think about all the experience Syn had working for LJ before she started DW. My experience in retail consists of the back room at Macy's and the production line at Subway. But I'm sure successful entrepreneurs have started with less.

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You are not out of your tree on the idea; you're very far out on a limb, but the limb's pretty sturdy. If you're serious about it, I will happily mentor the fuck out of you in the process of starting up the business. We'd also probably be willing to place some stuff on consignment with you, to help you with initial inventory (terms to be negotiated later, yadda).

A few things to think about, in no particular order, while you consider whether or not to pursue the idea more seriously:

* Over 50% of small businesses fold within the first five years. This is not an attempt to discourage you; it's just a statement of the odds. (The odds also mean that if you do fold within the first five years, it's not a personal failure; you are no worse than 50% of the people out there, and hey, at least you tried.) Be absolutely, solidly, bedrock-positive that you are okay with this fact, and okay with the possibility of failure, before you start. If you're not okay with the idea that your business might be broke in 60 months or less, or if the business failing would wreck you, don't even try.

* if you own a business with any actual storefront presence, you will be working, at minimum, twelve-hour days, no matter what your actual working hours are. You will have to be both retail manager and person responsible for creating stock, and you won't be able to do a lot of the actual creating while you're open, because you will always be interrupted just as you've got things all set up. You will not be able to take a vacation, or possibly even a day off, for at least a year after opening, and possibly (probably) longer. You will not be able to take a sick day. If you are dying of the crud, you will have to paste a goddamn smile on your face and drag your dying ass to the store and open it. Be okay with this. If the thought of all that commitment makes you want to cry, opening a retail storefront is not the opportunity for you right now.

* There is no shame in not being okay with either of the above two points. Watching my parents operate their small businesses for years while I was growing up is what infected me with my entrepreneural spirit, but it's also what convinced me that I could never, ever, ever own any form of retail storefront. I can deal with the hard work, I can deal with the possibility of failure, but I just can't deal with the regimented schedule. And that's okay! Retail/storefront businesses are not for everyone. If you're one of the people for whom it's not right, recognizing it now will save you much in the way of ulcer medication.

* If you have employees other than yourself, you will need to budget much more than what you actually pay them for employment costs: payroll taxes, SSI, workers' comp insurance, etc. Rule of thumb is that you budget twice what you're paying someone for payroll if you are paying them health benefits, 75% more than what you're paying for them if you aren't. So, you'd be looking at around $8k/month for payroll.

* Plan on losing at least 10% of your stock to damages, theft, etc. You may get lucky; you may not. Depending on your insurance policy, shoplifting may or may not be covered. (Usually it isn't unless it's over a certain amount, and that only if you jump through their hoops for protection, which is often incompatable with good customer service practice; you just can't keep jewelry in a locked counter 100% of the time.)

* You will need to have items at multiple price points, especially things at lower price points. Jewelry is a luxury item, and you'll occasionally sell the high-end pieces to people, but you'll get way more sales of the $5 special in the bowl on the counter.

* Your prices are way, way too low for a retail store. Double them. At least. (Then hold a gigantic "20% off!" opening month sale.) Then listen to what your customers are saying, to each other and to you, about your prices, and adjust accordingly. For retail pricing, you want to do at least three times materials cost + labor cost; four or five times is probably better.

* Starting a retail business, especially in this economy, requires a holy fuckton of self-marketing. You will need to pound the pavement for weeks leading up to your launch, and you'll need to market the fuck out of yourself: mass snail-mailings, handing out flyers, handing out coupons/postcards, partnering with other businesses to leave your cards on their "local businesses" exchange table in return for leaving their cards on yours, finding complementary businesses to see if you can offer dual specials ("20% off on your purchase with receipt from XYZ"), sponsoring local events and appearing at local gatherings with your happy perky smile face on and your best sales pitch, etc. You will need the capability to look someone in the eye and tell them, without hesitation, why your jewelry is the best choice in town (best value, best materials, best art, etc -- you don't need to be able to say you're best in all of those areas, but you need to find your niche, and you need to be able to rock that niche).

* Speaking of niche: before you consider starting up a retail business, you need to do a lot of legwork to figure out your viability. List every jewelry store in town. Do they make their own, on-premises? Do they have a specific theme or gimmick? Visit the stores: how are they set up? Does the store have a specific feel? What impressions do you get when you walk in? What's their highest-priced item? Lowest-priced item? What's the primary focus of their design aesthetic? How do they package things when you buy something? Do employees wear nametags? Organization uniforms or similar/identical clothing? How do you identify an employee? What are their greeting practices: do they let you browse, or do they give you a guided tour of what's available? Etc. You ideally want to make up a survey sheet with all kinds of observations, and fill one out for every jewelry store (or business that sells a great deal of jewelry even if jewelry isn't their primary merchandise) in at least a 30-mile radius of you. (Fifty miles is better.) Look for patterns. Then find the niche that isn't being served: is it "all natural/no manmade ingredients"? Is it "high end, glamorous jewelry"? Is it "fun and funky"? You may need to change your artistic style in order to fit into the area; I don't remember where you are, but most towns under a certain level of "large city" won't support two stores in the same (commercial or artistic) niche.

* How are you going to package your jewelry for sale? How are you going to display it? Like the quality of your photographs when you're selling online, the presentation can really affect whether people are willing to buy, and if they are, at what prices. You will need to plan to put at least as much time, effort, and capital into presentation and display as you are into the actual supplies for the jewelry itself. (Rule of thumb: your budget should be roughly equal parts supplies, marketing/advertising, location/presentation/display, and payroll/taxes/insurance/professional services/other overhead.)

I don't want to totally overwhelm you. *G* (As you woefully cry out, "Too late!") But in general, for what you're looking at, I'd say your $20k for three months is very much on the low side. I'd plan for at least $80k for your first few months: at least $30k in startup costs (stock, materials, professional services, incorporation fees, merchant processing setup to take credit cards, store renovation to create proper displays, advertising/marketing budget, website creation, phone services, etc, etc, yadda) and around $15k/month to take in in order to pay yourself and your employee a reasonable wage.

If all of this is totally overwhelming you, and you're backing slowly away with a dawning look of horror, might I suggest:

* starting out with doing a few local craft fairs/flea markets/etc. It'll give you a reason to create packaging and display for your jewelry and let you figure out what works and what doesn't, and it'll get you used to the concept of interacting with your customers and trying to sell to people.

* put together a sampler of your work (about a dozen actual pieces, plus good, clear, high-resolution, high-quality, professional or professional-looking photos of at least two dozen more pieces, showing the variety of your jewelry styles, along with a suggested price sheet and guidelines for re-order and custom work, topped off with your logo -- which should be done by a graphic designer -- all done up in a nice .pdf package) in a nice black velvet suitcase-sized display case. Then call around to local jewelry shops and ask for an appointment to discuss consignment sales. Consignment is where you place your jewelry with a store for them to sell it (and do all the hard parts of the bullet points above) in exchange for a percentage of the sale price. Depending on your region, this percentage could be anything from 25% to 50%. (It's rare to see the consignment percentage go higher than that, but it does happen.) Most shops will already have consignment policies set up; some won't, and you'll need to teach them. Never just drop in on them; always call and set up an appointment first. If you are interested in more information on this, I'm happy to stream-of-consciousness-dump on that as well :)

And I am now going to hit post without rereading and discover eighty billion typos and incomplete thoughts, since Sarah is waiting for me to finish up so she can go to bed because she wants to cuddle with me as she's falling asleep!

*applause*

Things to contemplate while I do the daily round of envelope-stuffing. Thanks!

I emailed Dad the same thing I posted here, bar the part about you, and he thinks I am so far out of my tree I'm flying. Which, to be fair, I kind of knew he'd say.

Ha. Let me guess, he's worked for someone else his entire life? (Entrepreneurs usually cheer other entrepreneurs on.)

I don't think it's impossible. I think it would be very, very hard, but not impossible. If you're still interested, after considering everything I said, I will ship you a few books to read.

Career military. Then unemployed for a year, then a stopgap job, then the job he's got now.

I am still interested, in a 'thing I want to do but not right now' way. I figure I'll keep the job I've got so's I get in a better financial position than I'm in, and I'll finish my paralegal degree as a fallback, and over the next year I'll collect resources and information. Starting with the library's books on starting small businesses, though I do appreciate your offer and would like to take you up on it.

Sounds like a plan to me! If you have a goal over time like that, it can help you out considerably -- you can spend the time between then & now looking up information, studying, yadda.

In the meantime, I'd recommend contacting your local Chamber of Commerce to see if they have any sort of new-business-owner classes, or to see if they have any business incubator/mentoring systems -- here in B'more, for instance, there's a program where experienced businesspeople mentor new business owners or people who want to start a business. (Also, low-cost loans/grants are often available for women, people of color, or people with disabilities who want to start a business; your Chamber of Commerce will have information if there are any programs in your area.)

I'll think a bit and try to put together a survey sheet for starting up the survey of local jewelry businesses, too.

Thank you so much!

You've already got some fantastic advice, but may I suggest trying your luck at a farmers market, or something along those lines? See if you like it by sticking a toe in the water rather than jumping all the way in?

Either/or kick it in the ass!

The one such place I can think of is only open Tuesdays and Fridays, when I'm at work. Bah humbug. Thanks, though.

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