Im thinking about opening a craft shop

jojododd

Hi Im looking at opening a craft shop in the my local area. I havnt got a clue where to start. If anybody could give me some web addresses I could look at I would appreicate it. Its just a pipe dream atm but, I would also perhaps be looking to get training to teach crafts. I really dont have a clue as to where to start or look.

Many thanxs

Jojo

Googlewhacker

Firstly know your competition, find out the companies they use for product (normally printed on the back of products). If there are alot around then I would be reluctant to go into that market.

Your place needs to be both cost efficiant but also where people are, there is little point putting yourself on an industrial estate where it maybe cheaper rent if you are not going to get anyone going there.

inmypocketnottheirs

Think long and hard first about the overheads (costs) of the business. For example, rent, rates, insurance, service charges, electricity. Then work out what your profit margin will be (the difference between the price you pay and the price you sell), not forgetting to include VAT (20% from Jan 2011). Then work out how much you will have to sell each and every week to cover the overheads. If that works, then you will break even (not make a profit but not lose anything). Your sales will then have to exceed that for you to be in a profit.

In the last few years I have lost count of the number of similar businesses that I have seen fail due to a lack of rudimentary business experience.

Hope this is of some help.

paulwf

The first step is to visit the Business Link website (or regional equivalent) and spend a lot of time reading through the guides then call them with any questions and arrange to go on their free start up courses.

To be blunt the most important thing to think about before you go too far down the line is where will you get the money from? Shops cost a lot of money to set up, both due to stock (some of which will sell slowly being craft items) and all your professional fees and H&S compliance generated from taking on a building.

Banks generally expect you to put in 1/3 and they loan 2/3...this is a very rough figure but it gives you an idea. Unless you can lay your hands on £10-20K cash now you need to think about where you can get that from otherwise I doubt any bank will be interested.

I might be wrong - please do your own research - but the best business plan in the world will mean nothing to a bank manager unless you can show them you are putting in your own money as well.

Pennywise

I've seen a few "crafts" shops open up and close down again fairly quickly. To make it viable, you'll need a huge range of "craft" materials which will mean you'll need to spend many thousands of pounds on buying stock.

"Crafts" is also a massively wide range. Are you meaning jewelry making, painting, knitting, cake decorating, embroidery, model making, ornaments, or what?

Just think about, say, paints - if you're going to sell them, you need a relatively wide range of colours - that could mean around 50 different colours for one type of paint alone - say acrylic. Then you'd need water colours - another 50 colours, possibly oils - another 50 colours, then maybe paint for clothing - another 50. Before you know it, you'll need 200 different "pots" and would need a few of each, so that's a thousand "pots" of paint, just to sell a basic range of paints for artists and basic crafts.

Bigger ranges mean bigger premises. Bigger premises mean more staff needed, higher power, more rent & rates, increased theft, etc etc.

"Crafts" is a very lucrative area for ebayers and ecommerce websites but very few, if any, cater for a full range of "crafts". There are plenty selling paints, plenty selling cake decorating, plenty for jewelry supplies, plenty for embroidery/knitting, etc., but very few stray into different areas of "crafts".

You have two directions - one is to really specialise - i.e. pick a particular craft activity and be an expert in it to try to get people to come to you from far and wide as the local "expert" - you'd need to quickly build reputation, advertise in the specialist media, etc. You'd need easy road access to major roads and plenty of easy, cheap/free parking very close by as you'd be wanting people to drive from the next towns to come to you.

The other is to just be a very "general" shop, with a small bit of everything - fewer lines in each range, etc., just to try and attract the casual buyer who's not too much of an expert. Specialist media is pointless as you wouldn't be "specialist" enough. You'd need to have a major throughput of people, town centre, high street, type of shop to attract passing trade.

In either case, a professional, quality, good website is essential - if you're going to have thousands of pounds in stock, you need more than one "vehicle" to keep it moving. A website is an ideal way of keeping stock turning over, not to mention giving you something to do when there are no customers in the shop - i.e. packing orders and updating the website on your laptop on the counter.

paulwf

Pennywise makes some very valid points! Although crafting seems to be very popular I have seen shops fail, probably not helped by ebay.

As well as having the 1000 pots of paint you have to accept that 500 of those may not sell in a year. But if you don't have them serious crafters will go elsewhere. You also have the problem of growing the business...as you get successful you'll need to increase your range. I used to manage a cycle store and basically the yearly profit was used to increase the stock holding, it was very hard to take out the profit without harming growth.

themull1

you will be competing with the likes of hobbycraft. can u not set up an online business first to see how it goes?

Pennywise

paulwf wrote: »

As well as having the 1000 pots of paint you have to accept that 500 of those may not sell in a year. But if you don't have them serious crafters will go elsewhere. You also have the problem of growing the business...as you get successful you'll need to increase your range. I used to manage a cycle store and basically the yearly profit was used to increase the stock holding, it was very hard to take out the profit without harming growth.

A point well made. I have a good friend who runs a model railways shop (different I know!) and has customers coming from miles around because of his wide product range. Some customers are from hundreds of miles away and come on their holidays or whilst passing on business trips.

He has over £70,000 worth of stock at cost price! Some of his stock sits on the shelves for years, but he has to stock it otherwise his loyal customer base wouldn't bother travelling to come. He's been ploughing his profits back into stock for years. He boasts (in a nice way) that no-one ever leaves his shop empty handed. Trouble is that he'll only get his money out if he sells up and someone else is willing to buy all his stock. If he starts to reduce his stock levels, he'll lose his reputation and lose customers.

Online is definitely the way to go as a start, perhaps moving into a shop when you've a better feel for what people want.

jojododd

Thanx everybody. I can see the best idea is probably to set up an internet shop in the first instance. Some very interesting points thanx again everbody I will take your information on board.

Jojo

angelpie1000

I'd second the recommendation to speak to business link - they are often a great place to start and can help with most aspects of your business.

Karen

vcrdesigns

I think all of the advice here sounds good and it will be giving you a lot of food for thought. One thing I will say, hobbycraft may be a large company who can afford to stock a wide range of items, but, their stumbling block is prices! i used to work in an art supply shop where a variety of the goods that they stock, were cheaper than with hobbycraft. that's just my experience :-)

first things first. Craft Shop. did you want to sell materials or a range of ready made products and have a "gift shop" so to speak? this will lead you down two different paths and needs to be decided early on. with you saying you want to maybe teach crafts as well, then the idea of running a shop that sells the materials and then you run classes to show ways of using your materials...:-) sounds good to me! i know of a business in northern ireland, back !!!! of nowhere, set up just like that, but people travelled the length of the country to go to that shop!

i think you are probably feeling overwhelmed by all the info we are giving you so before you commit yourself to anything, you need to try and define how you see your shop and how you see the craft teachings tying in with the shop! then, armed with this information, it will make it easier for any business advisors to guide you. business link are good and they run workshops for people thinking about becoming self employed. it helps you work through your ideas and see if they are feasible and what your next step is.

please keep us posted on the site as i am very keen to see how you get on! :-) good luck