hen Jovan Sherman saw the ad in her local "shopper" for a small retail space -- reasonably priced and in a good location -- she moved fast. "I saw the ad on Monday," she says, "and by Friday, I had committed to the space."
It was only then, after the commitment was made, that she put together a tentative budget and plan for her new endeavor. Three weeks later, on Nov. 29, 1997, Artifacts opened for business. But for Sherman, the challenges of opening a new retail store had not even begun.
Jovan Sherman in her new retail space.
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Background
Sherman, who makes jewelry with an archeological theme, had been working from a studio in her home for the past four years. Self-taught in her craft, she began making jewelry while working on her master's degree in art in 1982. On her first trip in search of jewelry supplies, she and her husband, Bill, drove to the bead district in New York City from their home in Connecticut. She purchased as many beads as she could with her $300 budget, drove home and got started.
Several weeks later she took her finished work to a jewelry shop in Hartford. "They took all I had, with the comment that 'the findings were a little crude,'" she laughs. "That told me I had something that was marketable." Jewelry making immediately became Sherman's sole focus; she never even finished the thesis for her master's degree.
For the next five years, she continued to make jewelry and, with the help of sales reps, built up a good wholesale business.
In 1987, she took a full-time job to help pay for her daughters' college education. She returned to jewelry making in 1993, after both girls graduated. This time, she concentrated on making one-of-a-kind jewelry, and she and her husband traveled around looking for new places to sell her work.
She sold her jewelry to galleries on the East and West Coasts, and in Florida, but by the fall of 1997, she was beginning to feel that it was time for a change.
She wanted more contact with people, and her mother was planning to move in with her in the spring of 1998, so it seemed wise to have some outside commitment to give them both space.
Additionally, her husband was considering early retirement from his position as an administrator for Central Connecticut State University, and they had talked of finding a business they could operate together once he retired.
Sherman has taken
a critical look at her
experience and has
identified a number
of considerations she
overlooked or has
had to reassess.
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BUDGETARY
CONSIDERATIONS
FOR
OPENING
YOUR
OWN
RETAIL
BUSINESS |
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During her first three months in business, Sherman incurred expenses for the following items. Many of these are easy to overlook.
If you're considering opening your own retail store, don't forget to
budget for:
- rent;
- security deposit;
- merchant association fees;
- a storefront sign;
- insurance;
- lights for display cases;
- fixtures;
- security system;
- monthly security fee;
- seasonal decorations;
- display props;
- counter mirrors;
- workbench;
- telephone hook-up;
- monthly telephone costs;
- glass shelves, brackets and storage shelves;
- file cabinet;
- gift boxes;
- tissue, bags, ribbon and seals;
- "grand opening" signs;
- refreshments for first two weeks of opening;
- "open" flag and hardware for entrance;
- balloons for each weekend during "opening";
- paper products;
- advertising;
- credit card setup costs;
- office supplies;
- cash register or adding machine;
- cash for change drawer;
- stock for shop;
- music tapes; and
- CD or tape player.
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A new beginning
The advertised space answered her needs. It was located in Old Avon Village, a prime shopping area for the affluent towns west of Hartford. Rent for the 230-square-foot retail space was reasonable because she was able to sublet from another shop owner who didn't need all of her space. In addition, she was able to negotiate a month-to-month lease. She figured that she could cover her overhead expenses on sales of $700 a month, and she would quickly learn new skills.
Not expecting the unexpected
With only three weeks until the Christmas season would be in full swing, there wasn't much time to set up shop. Sherman raced around to buy stock, obtain insurance, get a sign painted, purchase display fixtures, and the myriad of other things that had to be done prior to opening.
She found that the cost of some of the necessities exceeded her projections. Insurance cost more than she anticipated, as did advertising. She also spent more on display items than she had projected. Fortunately, she had purchased two jewelry display cases several years earlier when a local department store closed, just in case she ever needed them, so this saved her some expense.
For stock, Sherman concentrated on unique items and ethnic pieces. Because there are so many competing shops in the area, she worked hard to find merchandise that was unusual. She also added some consignment work by other area craft artists. But the bulk of the space is filled with Sherman's jewelry and the mosaic tables she started making about two years ago using various materials such as shards of tile, glass, pieces of Italian pottery, crushed tin cans and rusted metal.
Sherman figures that the total cost of opening Artifacts, not including her jewelry and the display pieces she already owned, was a little less than $6,500. Her fixed monthly overhead, not including inventory or supply costs, is around $700.
Because the opening was so close to Christmas, Sherman didn't have time to design and place print advertising, but she tried to capitalize on the season. Sales for most of December were relatively good.
But problems -- not directly related to the shop -- arose almost immediately. Sherman's mother, who had come for a visit in mid-November, became ill. Because Sherman had no back-up help, she was forced to open the shop late many days during December while she took her mother to various doctors and labs for tests.
By the first week of January, the shop was rarely open. Her mother was admitted to the hospital on Jan. 9, and after that, Artifacts was only open a couple of afternoons for the next few weeks. Following her mother's death on Jan. 27, Sherman, an only child, traveled back to her home state of Utah with her husband for the funeral and to make arrangements for selling the family home and settling the estate.
It was mid-February when Sherman returned to Connecticut. She reopened Artifacts for business on Feb. 17, but from a marketing perspective, it was almost like opening a brand-new business, since the store had not been around long enough to attract a loyal clientele.
The outside of Artifacts, which is located in a shopping village that attracts buyers from nearby affluent towns.
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If I knew then what I know now ...
It has been a difficult beginning. Without feeling discouraged, Sherman has taken a critical look at her experience and has identified a number of considerations she overlooked or has had to reassess. For other artists who are considering opening a retail outlet, she shares these insights:
- Have a good business plan in place before you start. Without the income provided by her husband's career, Sherman's lack of a business plan would've been fateful. "If we'd been trying to live on the income from this, we would have starved," she says.
- Don't underestimate the amount of time it takes to write and generate images for advertising, or the cost of advertising.
- Conduct a thorough traffic evaluation of a potential retail location. Sherman made assumptions on foot traffic at Artifacts' location based on the holiday shopping season, which is not an indicator of year-round shopping.
- Don't underestimate the time required for record keeping and bookkeeping. These cut into production time.
- Have a back-up plan for keeping the business open in the event of illness or a family emergency.
- Have part-time help available. With no help, Sherman finds it difficult to run errands, buy stock for the store, etc., and still be on the premises from 10 a.m. to 5 p.m., Tuesday through Saturday.
- Have sufficient capital. Sherman assumed that profits from the Christmas season would be sufficient to cover new inventory costs. This was not the case, and now she finds that she's undercapitalized for the gift area of the shop (which includes everything except Sherman's jewelry and mosaic tables).
- Understand the restrictions on your freedom. Sherman finds being confined to the shop frustrating, especially during slow times. When she operated from her home studio, she could be out making sales calls and trying to generate orders when business was slow.
Despite these problems, Sherman is upbeat about the business. "We're really looking at this as an experiment," she explains. "We'll give it a couple of years and then decide whether to stay here. In the meantime, I'm learning new business skills every day."
Grace Butland is a freelance writer and business consultant who lives in Riverton, Conn., where she owned and operated Variations American Crafts Gallery for 10 years.
