Transition from home-based to small retail space?

[faceOdd]

Hello,

I've been successfully selling my wearable art masks and hand sewn bags at arts and crafts shows, art parties, conferences and large conventions since last October. Many people have asked me where my store is and/or if I teach classes.

While trying to figure out where to put all the wire walls and shelving from the week-end's large convention, I had an idea. Today I found a small but expensive space that would be perfect as a little showroom/storefront with a somewhat larger room attached that would be perfect for a class size of 4. It's along the street that leads to an extremely popular beach, and with the weather getting nicer, traffic will be heavy in that direction soon. It's month-to-month and the deposit is fully refundable after six months. Without one class of 4 per month, I can't afford the space. I've already put out inquiries to see how much community interest there is, but 4 people per month doesn't seem that difficult to pull off. I'm either really naive or exceptionally optimistic! Both are potentially dangerous... : )

The space is for artists, hobbyists and small businesses. It's not zoned for retail per se, but people are allowed to conduct their business from the space. They just can't post hours of operation; customers are by appointment or whenever it's convenient to be 'open'. I really need a place where I can do custom fittings for masks, and there's 220 power so I can have a small oven onsite for drying my masks. The floor is painted concrete, there's power, heat, running water, great ventillation, a coffee shop three doors down, a hair salon next door, and easy bus ride or leisurely 45-minute walk to and from my house. Much of the walk is along the waterfront with a beautiful Seattle skyline across the water.

My questions: Have you made the transition from a small home-based business to a small retail/classroom space? If so, what things am I perhaps not taking into consideration? I know I'll need insurance to keep from getting sued, and I have to check with the city and state to see if I need a different type of business license. Other than that, what potential nightmares may lie ahead?

I'm confident that I'll be able to find 4 students per month, and the class fees will cover the monthly rent. I'm planning to pay the deposit and first two months' rent so that I'll be one month ahead at all times. I have three tubs full of scrap leather that would be ideal for students to experiment with, and lots of small project ideas. I'm also thinking a week-long summer daycamp for kids would be fun, but I probably need some sort of special licensing for that.

Anyway, I'm one of those utterly focused, hard-working risk-takers that finds a way to make things work. It's not common for me to ask these kinds of questions; normally I just go for it. But, it's expensive and I decided this time I'd get some advice from the pros.

Thank you! Sorry for the novella; just be glad you can't hear me talking a mile a minute about all the other plans I have for the future! : )

~Tammy

[Jordan]

Research, research, research. Ask other artisans in the area how they do and sit around and check traffic flow. Maybe contact summerschools to see if daytrips to the beach are in their plans and weigh the costs with what you can afford to lose and then go for it if it feels right.$0.02

[leatheroo]

without having to lock into a long lease contract, it may be a good adventure...dont forget to allow for power and water and garbage collection rates... make sure you check the figures for these things. how long has the shop been empty...if it has been empty for awhile you may be able to haggle for a lower rent. ...dont forget the tax man!!

[abn]

Tammy, I can't help you much here since I'm a hobbyist, but one of my first stops would probably be the local Small Business Administration (SBA) office. I notice there's one in Seattle. I suspect they would have lots of resources and the ability to counsel you on your decision.

http://www.sba.gov/

Good luck with your new venture! Let us know what you learn.

Best, Alex

[faceOdd]

Thank you so much for the input!

Jordan, little arts organizations keep popping up everywhere in my neighborhood, but I'm tired of selling things on consignment. I'd rather pay rent and sell other artisans' wares and give them 60% instead of the standard 50-50 split. I have to check to see if this is ok with the landlord, of course. And as far as daycamp, I was thinking it would be a good place where parents could drop their kids off for 6 hours a day, one week sessions at a time, and the kids could come home excited about leatherworking and with lots of little completed projects. I've taught a few one-on-one sewing classes at parents' requests, but it seems like it would be more fun - and financially beneficial - with a small group of students.

Roo, good point about the utilities, but luckily they're included in the rent. I'm in the process of getting insurance quotes at the moment, and the bad thing is that I won't be able to get a short-term policy to match my possibly short-term rental. Insurance will be a one-year policy. Depending on how much it is, it may crash my little dream... for now. Luckily, I haven't paid the deposit yet. Taxes will definitely be higher, but there is more potential to make money with the space than I have at my home. I'll still do the big shows, and if the trend continues, that's where the 'extra' money will come from to pay the taxes, my coffee addiction, etc.

Alex, I hadn't even thought to look into what the SBA had to offer. I bookmarked their page and will read through it this afternoon.

My ultimate goals with the space are to heavily promote Puget Sound Leather Artsian's Co-op (PSLAC), MacPherson Leather, Leatherworker.net, other artisans' works and of course my own little creatures. Over the week-end I must have written the url for leatherworker.net on four dozen business cards... there may be a flurry of new members soon!

But my selfish reason for all of this is that I want an ongoing display of my little creatures so I can sit back and admire them. Vain, I know... but I'm a Leo!

Thank you again for your input! I'll let you know how it turns out.

~Tammy

[Art]

Hi Tammy,

Since the place has an "artistic bent" you may get decent traffic that way. Talk to your lawyer, they are usually overly cautious, but expect them to want to make you lawsuit proof with assets held jointly with others with no interest (legally speaking) in the business. You need to do a simulated P&L to make sure this venture makes any sense initially. No use doing it if you KNOW you are going to loose money. If you have taxable income that can be advantageously offset by the startup costs, then that can help. Liability insurance is a necessity if customers come in for classes. You may not sell enough initially (or ever) to make expenses (including salary for you) so you may still have to do shows, but shows are a good thing both as a sales channel and as a marketing vector to get customers to your store for classes. Class sizes of 4 really cut down your opportunities like home schooled kids etc.; my daughter was having class sizes of ten or so and did pretty good. You really need to do the Winnie the Pooh thing and think, think, think and figure out what all the problems are and then think, think, think how to overcome them. Business is doing what you like to do and overcoming the problems that inevitably crop-up in the pursuit of same.

Art

Hello,

I've been successfully selling my wearable art masks and hand sewn bags at arts and crafts shows, art parties, conferences and large conventions since last October. Many people have asked me where my store is and/or if I teach classes.

While trying to figure out where to put all the wire walls and shelving from the week-end's large convention, I had an idea. Today I found a small but expensive space that would be perfect as a little showroom/storefront with a somewhat larger room attached that would be perfect for a class size of 4. It's along the street that leads to an extremely popular beach, and with the weather getting nicer, traffic will be heavy in that direction soon. It's month-to-month and the deposit is fully refundable after six months. Without one class of 4 per month, I can't afford the space. I've already put out inquiries to see how much community interest there is, but 4 people per month doesn't seem that difficult to pull off. I'm either really naive or exceptionally optimistic! Both are potentially dangerous... : )

The space is for artists, hobbyists and small businesses. It's not zoned for retail per se, but people are allowed to conduct their business from the space. They just can't post hours of operation; customers are by appointment or whenever it's convenient to be 'open'. I really need a place where I can do custom fittings for masks, and there's 220 power so I can have a small oven onsite for drying my masks. The floor is painted concrete, there's power, heat, running water, great ventillation, a coffee shop three doors down, a hair salon next door, and easy bus ride or leisurely 45-minute walk to and from my house. Much of the walk is along the waterfront with a beautiful Seattle skyline across the water.

My questions: Have you made the transition from a small home-based business to a small retail/classroom space? If so, what things am I perhaps not taking into consideration? I know I'll need insurance to keep from getting sued, and I have to check with the city and state to see if I need a different type of business license. Other than that, what potential nightmares may lie ahead?

I'm confident that I'll be able to find 4 students per month, and the class fees will cover the monthly rent. I'm planning to pay the deposit and first two months' rent so that I'll be one month ahead at all times. I have three tubs full of scrap leather that would be ideal for students to experiment with, and lots of small project ideas. I'm also thinking a week-long summer daycamp for kids would be fun, but I probably need some sort of special licensing for that.

Anyway, I'm one of those utterly focused, hard-working risk-takers that finds a way to make things work. It's not common for me to ask these kinds of questions; normally I just go for it. But, it's expensive and I decided this time I'd get some advice from the pros.

Thank you! Sorry for the novella; just be glad you can't hear me talking a mile a minute about all the other plans I have for the future! : )

~Tammy

[Kevin King]

Buy this book. No ifs, ands, or buts. Buy it. It will open your eyes.

e-myth book

E-Myth

Edited March 25, 2008 by Kevin King

[Ian]

Tammy, my experience was similar. After working from my home shop for a few years, I took the plunge and opened a retail store combined with my shop. My investment was considerable (for me) outfitting the store with fixtures, stocking merchandise(I sold other leathergoods besides mine) and building and stocking the repair part of the business.

I started with very few customers, but quickly built through word of mouth. However, I came to realise that I needed to make and sell a hefty amount of stuff just to cover expenses. There is a certain resentment that develops when you see so many of the items you spend countless hours making going out the door strictly to cover expenses. For myself, being in the motorcycle business, there is a definite season too. So almost as soon as the riding season ends, the business drops to zero until spring fever comes again.

I closed my store in January and am once again working out of the house.

But, it doesn't compare with the nice storefront and big workshop I had. And, the daily interaction with all the people that stop by for a chat was a great experience. I'm looking for a new space with lower overhead, with the goal of my grand opening early next year.

Despite the big cash I was out at the end of the whole episode, I highly recommend giving it a go. I learned a million things having the store and having a dedicated time to work was great too.

Be sure to get set up with a credit card company - it's almost a must.

Spend your advertising dollars wisely (a lot of advertising is just money wasted) There are a lot of free advertising posibilities

Don't forget to set your sales tax $ aside

Buy all your supplies from wholesalers and resell them to your students at the common retail price (you'd be amazed at the mark-up)

Anyway, best wishes on your exciting adventure!

Ian

[David Genadek]

Hello,

I've been successfully selling my wearable art masks and hand sewn bags at arts and crafts shows, art parties, conferences and large conventions since last October. Many people have asked me where my store is and/or if I teach classes.

While trying to figure out where to put all the wire walls and shelving from the week-end's large convention, I had an idea. Today I found a small but expensive space that would be perfect as a little showroom/storefront with a somewhat larger room attached that would be perfect for a class size of 4. It's along the street that leads to an extremely popular beach, and with the weather getting nicer, traffic will be heavy in that direction soon. It's month-to-month and the deposit is fully refundable after six months. Without one class of 4 per month, I can't afford the space. I've already put out inquiries to see how much community interest there is, but 4 people per month doesn't seem that difficult to pull off. I'm either really naive or exceptionally optimistic! Both are potentially dangerous... : )

The space is for artists, hobbyists and small businesses. It's not zoned for retail per se, but people are allowed to conduct their business from the space. They just can't post hours of operation; customers are by appointment or whenever it's convenient to be 'open'. I really need a place where I can do custom fittings for masks, and there's 220 power so I can have a small oven onsite for drying my masks. The floor is painted concrete, there's power, heat, running water, great ventillation, a coffee shop three doors down, a hair salon next door, and easy bus ride or leisurely 45-minute walk to and from my house. Much of the walk is along the waterfront with a beautiful Seattle skyline across the water.

My questions: Have you made the transition from a small home-based business to a small retail/classroom space? If so, what things am I perhaps not taking into consideration? I know I'll need insurance to keep from getting sued, and I have to check with the city and state to see if I need a different type of business license. Other than that, what potential nightmares may lie ahead?

I'm confident that I'll be able to find 4 students per month, and the class fees will cover the monthly rent. I'm planning to pay the deposit and first two months' rent so that I'll be one month ahead at all times. I have three tubs full of scrap leather that would be ideal for students to experiment with, and lots of small project ideas. I'm also thinking a week-long summer daycamp for kids would be fun, but I probably need some sort of special licensing for that.

Anyway, I'm one of those utterly focused, hard-working risk-takers that finds a way to make things work. It's not common for me to ask these kinds of questions; normally I just go for it. But, it's expensive and I decided this time I'd get some advice from the pros.

Thank you! Sorry for the novella; just be glad you can't hear me talking a mile a minute about all the other plans I have for the future! : )

~Tammy

Tammy,

Is that the little building right on the beach in West Seattle? If so I have a friend in that niehborhood who is a prominant north westcoastal artist that I could hook you up with. He used to own a gallery in town so he is very familier with the art scene in Seattle.

David Genadek

[faceOdd]

Wow, you've all been incredibly helpful! Thank you!

I printed this entire thread so I can refer back to it in the future.

Art, the space is 'off the beaten path' as they say, but it's a shiny new building in a rusty industrial setting. The locals all know where the building is, although getting them to come there will be up to me. My insurance will be a one-year policy; I can't find a shorter term, but in a way, I like the fact that it's one year. If it were short-term and I had a bad day - or a bad week, it might cause me to begin thinking short-term as well. The rent remains month-to-month, and that's the more difficult part to come up with on a monthly basis.

Class size of 4 is currently based on the fact that the 'classroom' portion of the space is a mere 9 1/2' wide by 16 1/2' long. I envision a 6' table lengthwise in the middle of the room, with 4 people seated around it and all the tools, supplies, first aid, etc. in the little alcove created by the two steps into the space. The back 'wall' is a garage door, so the classroom space can be fully ADA accessible without the steps. Maybe it'll actually be comfortable for 8, around 2 4' tables arranged crosswise. I get the keys on Monday, and I have all the tables I need already so I can experiment a bit. I'm thinking tiny classes more often might be a good way to go, especially since I'd like to create a 'bridge club' type atmosphere where people return to make new projects based on the seasons. Masks in early October and January, jut before Halloween and Mardi Gras, for instance. I naturally 'think think think' and analyze everything, but I never thought of it in terms of Winnie the Pooh! : ) People look at me and say, 'Your mind just never stops, does it?!'

Kevin, the book is on its way. If you meant I should read it first before renting the space, it's too late - but my personality type is such that I frequently put myself intentionally in situations that are way over my head and then I learn how to make them work. I love overcoming challenges and finding interesting ways of accomplishing things, and I also love to draw people together in beneficial ways.

Ian, I already have the fixtures, which is what started this whole crazy idea. I've done several versions of floor plan on graph paper and the only thing I'll need to outfit the two little rooms is a coffee pot : ) Essentially, I'll have a 10x10 convention-style booth set up at all times in the front room, and my finished products will be 'on display'. Mostly what this means is that I'll be able to see how they look, what I still need to make, and that they'll actually be ready to go. I have a tendency to not entirely finish them until the day before - or sometimes 3am day of - the next show. If I just have to pack them, instead of attach straps to them, it'll make life much nicer!

I'll be thrilled if I sell things from the shop, but mostly I want to teach the classes. And, I'm the first to admit that I only know how to do the things I'm interested in. I've already started hunting for guest instructors who specialize in the things I don't know how to do. There's another leatherworker in the building next door, but he doesn't seem to have a website. Tomorrow I plan to visit him to make sure I don't cause his business any negative impact in any way. Ideally, I'd like to refer people to him when they want the things I don't wish to make.

David, I think the little building you're referring to is the Alki Bathhouse, which is run by the Seattle Parks Department. I'm working on a bid to teach a class there also, since it's more prominent and a little more accessible than my space. I'd love to talk to your friend, if he's interested.

For better or worse, crazy idea or great plan, I'll have the keys on Monday. And the financial responsibility, but to be honest, no matter how much money I've made in the past, I've tended to spend it on too many latte's and very expensive clothing. I'm ready to drink drip coffee and wear what I already have for awhile.

Maybe I'll be too busy to bombard Leatherworker.net with my lengthy ramblings! Thanks again for your input!

Tammy