Any tips or suggestions for opening a store?

[KJohnson]

I am thinking of opening a store....I would like to think that I have thought of everything...transfering insurance, rent, electricity and gas for heat in the winter....but I am sure not! LOL Does anyone that already has a store front...have any tips or suggestions to someone who has never had a store before??

Thanks

Kris

[Twoscentsworth]

Yes, my first tip is "don't do it". But, you probably will anyway so my best tip is make sure your overhead is LOW....rock bottom low. since you are on a candle making forum let's say you are going to sell your candles. Figure out how many candles you have to sell a week just to pay your overhead...don't forget to subtract the cost of making those candles. Now, do you really think you can sell that many candles in a week to cover your overhead?

Every one thinks they want to open a store. Check and see how many here have opened a store only to shut it down within six months or less. Most times they have an excuse like, poor health, crazy people bothering them, etc etc but the reality is "low sales" and not enough money to cover their overhead. Just because you build it does NOT mean they will come.

1. Make a business plan.

2. Keep overhead low.

3. figure what supplies you will need (fixtures, bags, register, sign, etc.)

5. What will your store hours be? Remember you have to be there to make sales.

6. Make sure you have a great location.

7. Make sure you have enough money in reserve to cover all operating expenses for a year or more.

8. DO NOT count on making any income from the store for at least two years or more (if you do then count your blessings!) most money will be poured right back into the business.

9.Do a LOT of research on small businesses.

I really hate to see people pour their money and effort into a store front only to lose a lot of money. Owning a shop is not as easy as you think. It's not as much fun as you think it will be either. In reality it is a lot of hard work, time and money just to get going.

IF you are prepared to lose money for at least the first six months to a year or more and believe you can stick it out then you will have almost an even chance.

With rising gas costs people are not spending like they used to. They are not traveling to the small independent retailers like they used to either. (There are always exceptions, shops that have been around a long time, shops in great locations etc.)

Be very very very sure this is what you want to do.

[Beth-VT]

I think Twoscentsworth said it all, and said it well

[barncat]

Yes, my first tip is "don't do it"

I agree!! I have had my store now for 5 years, and still not making a profit. If this was my main income, I would ahve gone bankrupt 4 years ago. Advertising is very expensive and usually only gets you one or two people in. People drive by you everyday but it takes at least 2 years before they have the time to stop. And you never have what they want!!!!!

[cellydaniel]

Yup, I agree with Twocentsworth, a detailed business plan is a must

[lindsaycb]

I wouldn't do it...unless you already have a following from Markets & Shows in your area really. & people shopping your store online. Its much MUCH much easier to make fresh or have inventory to ship out vs stock things you 'hope' sell.

[Mei-Mei]

I agree with Twoscentsworth but I do think that sometimes (rarely!) candle stores can be successful if you carry items other than candles (like a spa).

My store is doing pretty well but I share the space with a Yoga studio so I have a built in customer base. Plus I live in a tourist town (New Orleans) and the shop is on a street that is frequented by tourists. We are right across from one of the most popular restaurants in town. So I have a lot of pluses that others may not have. But still some days I sit in the store all day long and don't sell a single thing. If I didn't have dirt cheap rent I would have gone out of business at the end of the first month.:embarasse

Think about it. How many $10.00 candles do you have to sell in a month just to cover rent if your rent is $1500.00? Even if your rent is only $500.00 that's a lot of candles to sell. And that just covers rent~not utilities, bags, decor, supplies, etc.

[camoflauge]

I've thought of this too. But, like the others have stated, you have to sell so much stuff just to be able to pay rent, utilities, advertising, furniture, beginning inventory so you can fill your store, insurance, maintenance-would you need to paint, fix anything, etc.

I do daycare out of my home and my friend thinks it would be so easy to just turn it into a store. well, it's a home and you'd have to get it zoned commercial-which i don't think would be a problem as i do have a huge driveway you can turn around in. but, there are downsides to this idea too-i'm in town, but on the edge-so i would need tons of advertising so people would know where to find me, i would be stuck to the hours my store would be open-couldn't just take a 3 day weekend whenever i wanted to without advertising that i was going to be closed, not to mention the fact that most people probably aren't going to feel comfortable coming to someone's home to go shopping...

plus, we have a similar store here and she is ungodly expensive-probably because of all of her overhead.

ok, just my thoughts as to why i haven't done it. i make more doing daycare-even if it's not what i want to do. I can't afford to quit right now.

imo you would be better off trying to get your products into more stores, maybe hold your own craft "shows" by renting out a community center etc. or do you have any farmer's market places, or can you rent out some space with something else attached that would benefit your sales-like the post with the yoga? just to get started and see if people are interested.

I thought it might be fun too, but just doing daycare-i know from experience that it is a lot of hard work, it's not a steady income either.

and i know from chatting with you that you have quite a few kids. what would you do with them when you are at the store? especially all summer. you'd have to find daycare for them? plus, how would you pick them up after school?

things to think about. I know there was a gal on here who regretted opening a store.

Good luck in whatever you decide.

Heather

[KJohnson]

Thank you all for your advice!

I have thought about all of the above....I do have a nice size customer base already with lots of repeat customers...I have done several fundraisers, and I have several wholesale accts....I also usually have great a great turn out at craft shows that I do...

.The rent for this store is sooooo low, that if I do open the store just the 2 trips I would cut out driving back home after taking kids to school.....would cover my rent and then some.

I am in the process of working on a business plan..which is something I have never done. If I open the store or not....a business plan is my next step. Can anyone tell me where to find a business plan that is for candle and soap making?? I have googled and I find every other business but this.

Thanks

Kris

[YooperCandles]

I dont know where there is a template for one, but a few years back I read Candle Cocoon's business plan online. I think if you contacted her, she would email you a copy....if she still has it on her computer.

HTH ~ Pam

[camoflauge]

did a search on here, here's a post i found-the sba link has a great

What is a Business Plan?

A business plan is a formal statement of a set of business goals. The plan may contain background information about the company. Think of your business plan as a decision making tool. It will help you concentrate on multiple areas of the business while staying focused on its main goal.

A business plan often includes how will you pay your bills, handle employees, order products, fill orders, market your products and protect your designs.

When is a Business Plan used?

All businesses should have a business plan. Good and bad opportunities come up everyday. A business plan will help you stay focused and make good decisions about these opportunities.

A business plan is always necessary when going to the bank for a loan or when seeking investors. A bank will want to be convinced you can repay a loan. An investor will be interested in what will be done with the initial investment, upcoming growth opportunities and exit plan.

Keys to a Good Business Plan.

A business plan should be simple, specific, realistic and complete. It will have a plan, actions, responsibilities, deadlines, measured results and follow up. Most of all, a business plan should be practical.

Questions to Answer Before Writing a Plan.

1. Describe your business, in 25 words or less.
   
2. What is your reason in starting this business?
   
3. What trend is your company going use?
   
4. Why will you be successful?
   
5. Describe your company mission, in 10 words or less.
   
6. How do you know you will be meeting what your customers needs?
   
7. Where will your first 10 customers come from and how much will they be willing to pay?
   
8. Why should a customer seek your company instead of another?
   
9. How much will it take to fund your company for the first year?
   
10. What will tell you that your business is serious trouble?
    
11. What is the biggest drawback/limitation/flaw to your business idea?
    
12. How are you going to handle the money and accounting?
    
13. What is your gross profit margin? (selling product price vs. cost of product materials)
    
14. What is your net profit margin? (gross profit margin minus business expenses such as payroll, rent, utilities, etc.)
    
15. How will you handle growth and overwhelming success?

Resources in Helping you Write a Business Plan.

• Book: Entrepreneur's Notebook - Practical Advice for Starting a New Business Venture
  
• Book: Business Plan Kit for Dummies
  
• Software: Business Plan Pro 2007
  
• Software: Marketing Plan Pro 9.0
  
• Government Resources: SBA - Small Business Administration

hth you some.

Heather

[HeavenScentU]

I would really think twice about it. Questions you need to ask yourself are:

1. How much am I earning right now selling candles?

2. Do I have at least 1 years income to fund the lease, rent for the business?

3. A business plan helps, but mine kept changing so much that I threw it away.

4. I had restaurants, salons, real estate agencies, book stores, etc. all around me and only a few people that walked by to go into those places entered mine. So you may not get the traffic as expected.

5. What else are you going to sell to get the customers in. Summers aren't a good time to sell candles, sales tend to go way down.

6. Do you have the extra money for advertising??? commercials, telephone book, weekly newspaper, etc.

7. Is there sufficient parking for your customers?

8. Can I commit to being at the store every day?

I would arrive at the store around 8 to clean the store and make sure I had enough money for the dayand something to eat for the day. My store was normally open from 10-6 Mon.- Sat. and closed Sun. but I always felt I had to be at the store early and leave late. Customers would stay past closing to talk or call and wanted to pick up a gift so I stayed open for them. I loved having the store, but I hated it because I felt confined. I wish you lots of luck if you do open your store.

[Patience]

Here's a link to download "business plan" outlines. It's from Microsoft Excel.

http://office.microsoft.com/en-us/templates/results.aspx?qu=business+plans&av=TPL000

Hopes this helps. And I hope you do what is right for you! If it feels right, do it!!

[David Fields]

There's nothing posted I would disagree with. Having your own store front is TOUGH!! KJohnson, you said your rent would be cheap. Cheap in business lease terms translates into "bad location, low traffic". If so, don't do it. Either will kill your business. A candle store must have traffic. We had a store for three years, closed it after learning a lot and opened up another one. Costs are double that of the first, but sales are four to five times greater. We are in our third year at our new location and make a nice living. After location and traffic flow, I would say sell more than just candles. Good luck.

[Sharon in KY]

If your rent is that cheap I would go for it. I really don't want a store I want a shop. More room to store and make stuff, spread out a little. Is their room for all that?

[Aubs]

A couple years back a friend and I were going to start our own business...nothing to do with candles or any tangible product, for that matter...A great resource many towns/cities have is SCORE

They do the following:

1. Hold meetings/learning sessions (those are for small fees) for up and coming business owners as well as current business owners

2. provide you with a counselor(s) (free of charge--at least here it was) that help provide you with tools & advice you'll need

3. provide you with alot of the connections you'll need to get started and grow your business.

This organization is made up of working and retired business owners that succeeded in your area. This maybe something to look into. The nice thing for us was having that group of individuals to brainstorm with and point out the things we had overlooked, hand;t even thought of, etc.

Other thing I would suggest to take a look at is:

SBA

I really don't believe you need to pay money to get the information you need to start your business...Make sure you don't dish out money to someone to make a business plan for you, etc. You need to/should make your own for more reasons than I could list. The only time we paid money during our initial planning stages was to purchase software to create our business plan and we spent no more than 20 bucks, though we could have gotten away without it. That is just my 2 scents *shrug* We never started our business in the end...I don't regret it tho. I like candles more

[tammyc]

About 10 years ago I owned and operated a craft supply store. I had a great location and low rent. I rented my inlaws basement appartment. Trust me, the rent and payment terms do not get much better than that. I still had a hard time making it. I had a good customer base. The store was always busy. The problem is when you are selling products that do not cost a lot it takes more than a good customer base. It takes heavy customer traffic. You need not only your repeat customers, you need to bring in new customers every week. That takes lots of $$$ in advertising. My products sold for anywhere between 10 cents each to $50 each. This is probably similar to your candle prices. How many $5 candles would you have to sell to make your rent, lights, heat/ac, etc. for the month. Now how many more would you have to sell to make it worth your time to be there 5 or 6 days a week. If you are there 5 or 6 days a week, when will you make your candles. You mentioned saving money in gas not having to drive back and forth from dropping off your kids at school. The busiest time for most retailers is the weekend. You really should be open on Sat. and Sun. and take you time off during the week. My store was closed Mondays only. I didn't have kids then thank goodness. I would not have been able to spend any time with them. I opened at 8 and closed at 8 six days a week. I did make money, but for the time I put in I did not make what I was worth. When my husband and I decided it was time to start a family, I closed shop. I went to work in a business office 9-5 mon thru fri and felt like I was on vacation. I am not trying to get you down on the idea. I just think you should have an idea of what you are getting into. A business plan will show you if your store will survive, but it does not show you the time and effort it takes or the time away from your family. Have you thought about setting up displays in local businesses. They take orders for you and get a cut (20 - 40%). This works well for me. No rent, no time committment.

[KJohnson]

Thank you all for your input!

Kris

[Meridith]

There's nothing posted I would disagree with. Having your own store front is TOUGH!! KJohnson, you said your rent would be cheap. Cheap in business lease terms translates into "bad location, low traffic". If so, don't do it. Either will kill your business. A candle store must have traffic. We had a store for three years, closed it after learning a lot and opened up another one. Costs are double that of the first, but sales are four to five times greater. We are in our third year at our new location and make a nice living. After location and traffic flow, I would say sell more than just candles. Good luck.

So very very true. We were lured in by the cheap rent and a need to move the biz out of the house since I had outgrown it. But my location sucks and I think the numbers could be better. This is why I am in the process of looking for a new location and feel I am lucky that I am able to take my time in finding one. This time, I will be much smarter.

[joey825]

Hi guys, I am new to all of this candle making. I have a question. If I just make candles and sell them as a hobby, out of my home. I don't need to worry about taxes and business related BS. Is that correct?..Thank you..wish luck...I always have loved candles...

[MissMary]

Hope I'm not butting in, because I'm still a newbie, but on the business aspect of it, I wanted to talk up insurance. It can be quite expensive because you no longer just carry product liability, but you need to have general liability for if someone falls in your store, and more than likely you'll need a separate business renter's policy to insure your space, and in shopping areas it can be a bit more expensive, especially if you make your candles there, because they look at it as if you had a claim because you burned your store down, the stores surrounding you have to be paid for. Depending on the size of your store, that can add an extra $50-$250 bucks a MONTH to your overhead.

Joey - Yes! You need to worry about everything! Taxes, depending on how much you sell will need to be figured in. I'm thinking, but not sure that if sell more than $600 a year, regardless of how much you spent, you'll need to file that as income. This also means you'll need to keep your receipts from all sales and purchases, so that you can write off some of it as expenses. You'll absolutely, no matter how much or little you sell if you sell a single candle a month, need to have product liability insurance.

You'll pretty much have to worry about everything a business does, but your overhead won't be as much. You should factor in the price of your candles the electricity used to make them, insurance policies, gas to get supplies, shipping on those supplies, etc.

Doing it from your home, unless you actually sell some from your home, you don't have the storefront type insurance, and you aren't paying a rent price to another person just for the store alone.

[iloga]

KJohnson: The other side of the coin, aka food for thought

After three years in retail, I lost my storefront. During that time, I never had to dip into my personal funds. Sales always covered business expenses. The key, I believe, was that I positioned my candles/tarts as an accessory to a variety of product offerings....an add-on sale of sorts which, in reality, was my main product line.

Initially, I was devastated. My married daughter offered to send my landlord a thank you card for putting me out of my misery. At that time, I had no clue I was miserable. My husband offered to draft building plans for a shop on our property....plenty of acreage and no zoning issues.

In Kristine's Shower, a fellow CT board member, generously emailed me her wholesale info. Within three weeks I had five wholesale accounts and consigned with two shops. It's been six months, and I have no inclination to return to bricks and mortar. In 2008, I plan to discontinue all shows except charitable events which benefit the community in which I live.

While I agree with all of the other responses to your question, I thought another view may be helpful. While it is possible to have a profitable storefront from the first month you hang the Open for Business sign, you can easily become so consumed that it's years before you realize that you have become oblivious to almost every aspect of your life except wax, wick, etc.

Wishing you the best!

[Meridith]

Hi guys, I am new to all of this candle making. I have a question. If I just make candles and sell them as a hobby, out of my home. I don't need to worry about taxes and business related BS. Is that correct?..Thank you..wish luck...I always have loved candles...

Another thing, even out of your home, you will still need to have insurance for your product. People are very sue happy these days and what if your candle starts a fire or someone make that allegation against you. Are you prepared to defend yourself in court? The other thing to consider is that your homeowners insurance might not cover you doing candles in your home - alot even frown upon that and I've heard of folks that have lost their HOI as a result of them making candles in the home. And if you have customers coming to your home, that is a whole other ball of wax (no pun intended) and something that just may upset your HOI carrier even further.

[camoflauge]

lots of awesome advice!!

I do think owning your own business can be profitable-many people out there do it, but you do need to do your research.

if you only sell candles and such it will be harder to get people in your store. It all depends on what kind of town you live in too. I have a friend that lives in a small town and she makes candy bouquets. well, they live at least 40 miles from us-our town is much bigger/more shopping. so, she has a little bit more of an "edge" because people are looking for unique gifts, everyone knows everyone, and people don't want to spend $3.25 per gallon to come to mobridge for a gift.

in our town, we have a ton of different stores-we have a gift type store that sells yankme candles, plus has a pharmacy, craft type store, and tons of other gift ideas-figurines such as precious moments-that kind of stuff, we have another store that carries "craft type stuff" but is not stuff she's made-but other's in SD an nearby places, some is just commercial. then you have our "Alco" store which carries a variety of candles, crafts, etc.

i would not even be able to compete with their prices. however, if you had clientelle that was looking for unique, handmade gifts-something special they would be more apt to walk in the door.

I don't want you to get discouraged if this is something you truly want to do, but, imo, i think it would be more beneficial for now to try to get your products placed in more stores-such as beauty salons, coffee shop, etc. anywhere they will let you sell your stuff-but then again you run into the problem of keeping up with your products, where are they placed in the store, they will not be "promoted" well-especially if on consignment, what happens if something is stolen-will their insurance cover it or are you just out.

This is something i would love to do, but for all the reasons listed on this post-i just can't/won't. plus, i have 2 boys and i've done daycare since the first one was born so i won't put them in daycare anywhere else. a new business will eat up a lot of time(not to mention $$$)-you don't just close up at 5 pm and are done til the next morning when your store opens up. my daycare even though it is in my home requires me to : clean the floors after kids have gone home, do dishes periodically-i have a dishwasher which helps-but some has to be washed by hand, trash needs to go out daily, i have to go grocery shopping, make meals, conduct interviews with parents, etc. it doesn't end when the kids leave-unfortunately.

would you be able to make candles etc. during the "store hours" or would you have to do that when you got home? which would take away more time from your kids?

plus, what would you do with your kids during the summer? they most likely will not want to be stuck in a store all day.

good luck, i'm done rambling. your "dreams" sound like mine. i'd love to quit daycare and be able to do this full time and it seems that you need some sort of venue to do that-and craft shows this time of year are few and far between. it takes so many sales just to pay for utlities and other bills!!!

Heather

[KJohnson]

thanks Heather for your input..but I am wayyyyy ahead of you.