Q. I have what might be a rather crazy idea (maybe it is, maybe it isn’t—I need your help to decide!). I have my own rather extensive handmade jewelry line that I’ve been selling at various fairs. It is higher-end jewelry, and I work a lot in the metal clay arena. A prime downtown retail location just opened in my city, and I’m contemplating leasing the space as a store front to sell my designs. Do you think it is possible to make a go of things selling only my designs in a jewelry shop-type setting? Would I need to carry work from other artists? Is this just a bad idea in general?
-Nadine Hampton (via e-mail)
A. I wouldn’t call this idea crazy, but will require careful planning so you don’t do something crazy. Opening a shop is certainly a challenging commitment whether it’s on the street or on-line.
I see two major issues: time and money. First, it’s essential that you create a business plan and a carefully crafted annual budget. Search online for information about writing a business plan before you do anything else. You have all the information you’ll need to build a projected budget that includes expenses—both fixed and variable. Fixed expenses include rent, insurance, supplies, and utilities—they’re the easy ones. Then there are the variables which include merchandise (yes merchandise, the shop will be purchasing your work to sell), staff, and promotions. Those are the biggies when it comes to variables. Since you have no history to refer to, you’ll be dealing with these expenses on a totally subjective basis. I’d suggest you estimate on the high side, as it is better to have a surplus rather than a deficit at the end of the year.
Secondly, you have to project your sales. This is tough without any history to rely on, so let’s try to work both ends to the middle. For this example, I’m going to set the monthly fixed expenses at $5,000. This means you’d need $5,000 in sales just to keep the space open for business. To budget for variable expenses, you’ll have to decide how many hours each month you’ll work in the store and how many hours will be covered by an employee.
The promotions budget typically fluctuates within the sales curve, wherein you’d spend more during anticipated bigger sales months. If we add another $5,000 for variables, the break even figure is now $10,000. Here comes the potential deal breaker or plan changer: can you run a shop and make enough jewelry to provide the inventory needed to make the sales projections you need to in order to pay the bills? Only you can answer this one. Whatever your answer is, I’d suggest you consider selling the work of other jewelers, and not just your own work. This will do two things; take the heat off of you production-wise, and offer your shoppers a broader selection of merchandise—always a plus for any shop.
I’m aware of craftspeople who have opened shops thinking they could simultaneously make and sell. Most couldn’t, and needed to choose a direction one way or the other. If this happens to you, you’ll want to make the choice that won’t make you crazy.