A little while ago I was asked by fellow beader how to go about opening a bead shop. It was her dream, as I am sure it is the dream of many beaders. I mean, what could be better? being surrounded by little sparkly things all day?
She asked me to be honest, so honest I was..... I thought it might be useful to anyone else who was thinking along the same lines.
Setting up a shop is incredibly costly. I was in a different position as I already had a successful online business, so I knew, after doing the sums that we could afford rent for a shop on what we were already making.
Even then....... we found a unit £6,000 a year, don't forget your business rates on top, then business price electric, gas and business rates phone line.
We bought old sideboards from a junk shop for our displays, and covered them all with burgundy velvet - cheap and cheerful, but still a good £300. Then a carpet, big expense that you do not automatically think of. Add to this security lights and alarms, a till, packaging, a sign for outdoors and the windows.....(We had two A-Boards from a junk yard at only a few quid, but to get them "signed" up was £100 a side !! So it was gonna be around £600 for two A-Boards and an over the door signage. Andrew just went out and bought the machine
Proper slatwall units for displays cost around £100-£300 each, you would need a dozen or so. 4' panels for the walls are around £20 each plus shipping (and they are heavy!!) but don't forget your hooks at around £45 for 100 basic ones. And believe me 100 hooks goes nowhere!!
Advertising, a basic bead mag advert around £150 per issue, newpapers similar. Printing business cards, fliers, stickers... it all adds up.
So, start up costs are now at around £3,000 without stock (£1,000 first months rent and deposit / £700 ish for fixtures and fittings / £900 for printing and advertising / + whatever starting stock you might need) Remember also you have to sometimes pay people to fit that security light, or the carpet. Or buy your friend a drink or two for putting that shelf up.
So, taking that into account, and as a really, really rough guide (and I mean REALLY rough) after start up costs you would be looking to make at least £200 a week to make back your rent , rates and basic bills. This of course means at least £400 sales in beads alone if you are working on a 50% profit (I could only wish for that type of profit.
Sometimes you have to take a hit on things to be competitive. For example the KO I sell, I make around 12p a reel on, if I put it up dearer it wouldn't sell, and my customers want it.
So, £400 a week, is £67 a day if you are opening 6 days. But that is without profit, no wages, no pocket money, no nothing. Average spend per person was around £12.
Our takings in the shop DID NOT cover the bills, our online business took the brunt of that, which left hardly any profit at all, hence why we shut.
Then of course there is your time. Who will work in the shop, just you? Then you are a sole trader, what about sickness and holiday? Anyone to cover? What happens when you need a wee, do you lock the door?
Business partners? Good in one respect, but then you need to take a really decent income to pay two wages.
Insurance? What if........ someone slipped on a bead, broke their back, sued you - your insurance doesn't cover it - they will take your assets, do you own your own home? If so, you will need to become a Limited Company, this means you have to make your accounts public. You pay yourself a wage (if there is enough money) and the rest the company owns. This is good if you were to go bankrupt as the buck stops with the company and not with you. But you lose your business name and the chance to start it up again within 6 yrs.
Andrew gave up his job to come in with me when we moved to bigger premises. We narked at each other constantly, and we used all of our well earned savings to live on while the business income went all on paying the bills.
I don't know anything about accounts with wholesalers, as I have always paid as I have gone. Some people work really hard to get accounts with places like Swarovski, but you have to turn over around £100,000 a year, and they want to see your books ! And from what I have been told you have to take more or less what they send you at about £12,000 a time. High pressure sales.
You work all hours, you take boxes of stock home to count and bag, you have a customer come in who looks at the 50 different coloured tubes of Delicas you have and wants another colour, so you order it in (bearing in mind you have to order 100 tubes at a time) and they don't come back.
Then there is VAT, if your takings are over (I think it's...) £60,000, you can be making ZERO profit and still have to pay your VAT on ALL takings, which is currently 20%. The base line is around £193 a day over a 6 day week, which would mean a VAT bill at 20% of £38 a day - eats into your profit big time.
Then of course you can be an employer. This comes with all its own issues, say for example you take on a sales assistant, young lady, great at her job. She gets pregnant and take maternity leave. You have to pay her, and still either pay someone else to cover or cover it yourself. Just one example, of course there are many.
When I was starting out I asked these questions, I even bought some supplies from a lady who was shutting her bead shop. She told me all this, I chose to ignore, I guess I thought I knew better, and now I do But hey! Nothing ventured, nothing gained eh?
So we decided to close. Luckily Andrew was so missed at work he walked back into his job, and we built a big shed and came home.
We lost 3 years due to constantly working, our marriage was tested to the seams, and £12,000 in savings which we lived on while hoping that "next month would be better".
We went from having two overseas holidays a year, to barely a weekend in a Travelodge, and we still haven't yet clawed that back, although it is happening very very slowly.
Well, you asked, was I honest enough?
