Opening a Contemporary or Paint your own Pottery Studio
By Connie Speer - The Pottery Consultant
Been to a few paint your own pottery studios and now you're dreaming of opening your own? Come down from the clouds and check out the reality first. There can be many rewards, but it won't just fall into your lap. There's hard work and sacrifices ahead of you. Nothing worthwhile is free. You might not like everything you read here, because it won't be what you want to hear, but I'm not here to tell you what you want to hear. That would be doing you a great disservice.
This is prep work you should do BEFORE you start calling around asking every manufacturer, distributor or other studios for information.
Realize there are no guarantees in life, and that might go double for business. You can bet McDonalds does their homework before they open a new location, and they have tons of experience opening new stores. Does that guarantee every store will be a financial success? Unfortunately, no. So, what about you and your desire to open a contemporary studio? Do you think you have what it takes to make it?
There are three critical issues facing a potential new studio owner in terms of whether or not they will be successful. They are: 1) City and studio location 2) Marketing, advertising and public relations and 3) Business knowledge and common sense. These articles will cover these issues in the hopes of helping you overcome the odds of opening a new business.
I'm going to tell you what you need to know to be a success. But, success means different things to different people. To one person, it might mean being able to pay all the bills every month and have a comfortable, (if not rich) existence; happy with not working in the corporate world, being creative, working and helping other people bring out the joy of doing ceramics. To another person, this might be completely unacceptable. They want to make lots of money, hire a manager and be off on vacations all the time. This situation is very, very rare. You better be willing to gamble your loan on it. Can you make a decent living? Define decent. 30K, 40K, 50K+? We're not talking about gross sales at this moment; we're talking YOUR salary. You most likely won't have a salary of 50K your first year, or even second year. (And what if you have a partner or two?) You MIGHT make 50K your third year IF you do everything right and you're lucky. And what is right? Read on.
You hear it all the time, 'Location, Location, Location', yet, over and over again, prospective owners either ignore this or don't understand what it truly means. In a nutshell, it means you have to open where the money is.
Consider city population and kind of city. Several years ago, some numbers were thrown around saying a town with a population of at least 60,000 could sustain a studio. Perhaps, but with this number, the kind of city becomes important. Is it a resort city, college town, seasonal? (Yes, there is a difference between resort and seasonal.) Is the population above average income? Are the families driving Lexus and Mercedes? Is there some other big city within an hour, and the upper income families have made this town their oasis from the asphalt, traffic and noise? Are there plenty of possibilities for the people of the town to spend their money like movie complexes, many large grocery stores, clothing stores, florists, etc, etc.? Is Mom home with the kids? If so, then this town might be just fine. If there are fewer people, you could be trying to sell the store in less than a year.
Year-round resort towns fair much better than seasonal resort. The studios who wisely opened in the year-round resort towns have sustained business. They also realized having a convenient, easy 'we can ship it to you' system in place was an absolute must. Seasonal resort towns have it much harder. Some even shut down those 3-9 months when the business is off. Better have a great deal worked out with the landlord, and another full-time job if this is the route you choose.
College towns are also hard. If most of the students leave town every May and don't come back until the end of August, and September is a down month anyway (more on that later), that's five months that you might not be able to pay all the bills. Better have had a pretty spectacular other seven months. But, don't kid yourself. They just won't be good enough to get you through. And something else to consider...do most college kids have enough time and disposable income to pay the prices you need to charge to survive? The answer is NO. Sure, there are a few universities sprinkled across the nation that are in big cities, and those cities are fabulous for your consideration.
Big cities are great. Medium cities are good. These have populations of over 500,000. Most of the early studios that opened figured that out pretty fast, and studios popped up all over the country - some down the street from each other. There are pro's and con's to this. Pro's are the other studio introduced the concept to the town so when you open, you don't have to spend as much time and effort 'teaching the community' what you are. Con's are the other studio will HATE you, and you will have to be better in public relations, price and atmosphere to steal their business. Competition, like it or not, is a part of business. When you see one grocery store, there's usually another one just a few blocks away. I'm not advocating finding an existing studio and opening yours down the street. There are MANY locations in MANY cities across the U. S. (and around the world!) that are untapped and PERFECT. You could have one of these spots all to yourself and be the talk of the town. You won't constantly be worrying about what the competition is doing. Instead, you can be using that energy planning your own original and successful marketing strategies to make yourself even bigger and more profitable.
So, how do you figure out if a location in a city is the one for you? And pay attention!
It should be anchored to some sort of shopping strip center or mall, but it doesn't always have to be a center or mall. Think multiple shopping destination with HIGH foot traffic. Go to this spot one weekday late morning, one weekday late afternoon, one Saturday morning and afternoon. If the center is a BEE-HIVE of cars and people all the time, it's most likely perfect. If not, look elsewhere. It's NOT worth it, no matter how cute you think the building is, or how low the rent is for the square footage. In fact, low rent is sometimes the cornerstone of failure. High rent means everyone wants to be there. It's desirable. So they can charge you big bucks. If you don't take it, what do they care? They'll have a Baskin Robbins in there next week or a Starbucks, or a - you get the picture. Which brings us to what kind of other stores are in this center? Multiplex theatres? Starbucks? Hallmark? Chili's? The nicest grocery store in town? Understand? YOU want to be there, too!! Choice between a cute house four doors down off Main Street with 1500 sq. ft for $1,000 per month, or 1,200 sq. feet across town in the new strip center with Starbucks and the new theatre for $2,800 per month? Think you'll be able to make up for the location with advertising? Many before you also thought so, and now they are closed. Sold, once or twice over. Don't be afraid of the rent if the location is right.
What are the national cost averages per square foot? As low as $12 sq. ft., as high as $35+ sq. ft.. What happened to typical successful studios with these average rents? $12 sq. ft. got lucky and did $150,000 gross last year after two years in business, with about a $20,000 net profit. $35 sq. ft. sweated year one becoming established, but hung on, did everything right with their marketing and controlling inventory and taxes (more on those later, too!) and grossed
$275,000+ after year two with a $32,000 net profit. Salaries come out of the expenses, not net! These are only singled out averages of two studios who are still operating. There are better and worse case scenarios.
You need demographics to determine if the location is right; can't go by gut alone on this one, have to back it up with hard numbers. When you think you've found the right location, there will be a sign on the door with the name and number of the leasing agent or property manager. Call them. They don't always call back after one or even two messages. Sometimes you have to KEEP calling them. Remember, 'squeaky wheel get the grease'. Always be pleasant, no matter how many times you call. Tell them you are interested in the retail space for lease. Don't forget the address and suite number. Sometimes they'll ask you up-front what kind of business you will be opening. If you say 'new' or 'pottery painting' or ceramics, there have been cases of hang-ups. Remember these people are looking for renters who have tried and true businesses that will sign long leases and are 100% successful. Put yourself in their shoes and choose your words carefully. You might say something like, (and with measured enthusiasm) 'Oh, it's this great new family oriented entertainment and relaxation painting and craft business that has been sweeping the nation for the past 12 years! Haven't you seen the articles in People, Better Homes and Gardens, and USA Today with Arnold Schwarznegger and Rosie O'Donnell? It's been one of the hottest top growing businesses, and I want to put one in your strip center.' Now, did you get all the psychology in those sentences? You've said 'family'. That means mother's, father's and their children. More people to their center. '12 years, hottest, top growing.' It's not a fad, and you should be around for at least 5 years. That's critical to them. 'Top magazines.' And you've dropped celebrity names. That always hits people in their gut. Everytime. Glamour. It's an aphrodisiac.
Set up a time to meet with them and to look over the location. Be professional. Wear professional clothes. Borrow a nice car if you don't have one. Bring notepad and paper. Take careful notes. Ask lease length, cost per square foot, triple net, commons, finish out allowance, maximum capacity, signage allowances, strip center hours and requirements (some will require you be open and closed the hours the center is - which may not be best for your business - you might need to be open some or all evenings of the week). Ask when it will become available, what other terms or allowances there might be like first two months free once lease is signed while it's being fixed to your specifications. Ask for the demographics on the area. They WILL have them, maybe not right there with them, but they can get them to you. In fact, you might even ask them to bring them the first time you talk on the phone. If not, go by and pick them up, or get them faxed to you.
The demographics will tell you all kinds of things, and you should use copies of them in your business plan. One of the more important things it will tell you is within a 1, 3, 5, 10 mile radius how many people, broken down by family type and their income range. You are looking for that magic percentage of 25%+ of families 50K -75K+. If it's there, bingo. You can also get some of this info from the Chamber of Commerce. Another great source is the media, radio, newspaper and cable television. Call up their advertising departments. Tell them you are opening a new business and are planning your advertising budget and would like to budget them into plans. You need rates and circulation information. They will fall all over themselves to get you their media kits. Inside are sheets and sheets of demographic info you can use for your business plan, choosing the right location plan and marketing and advertising strategies. You WILL use some or all of them eventually.
What size should you be? Let's talk national averages again, and you can decide what's best for you. They are as small as 600 sq. ft. and as large as 3000 sq. ft. Most are 1500-2000 sq. ft. What kind of studio you imagine yours to be and what activities go on inside will determine the size YOU need. How should that be broken down once inside? You will need a kiln room-one kiln or two kilns? (We'll get into pro's and con's of that issue later.) In that kiln room, you'll need shelves for bisque, finished pieces, kiln shelves, stilts and posts, cones, etc. , storage space, a floor fan.
This room MUST be able to be vented outside. Will this be your dipping room as well? A dipping vat, tables or shelves for drying pieces, storage. Will you have a separate room for an office? Desk, file cabinets, computer, fax machine, mini-refrigerator,? How many bathrooms? Handicap assessable? Party room? You'll desperately wish you didn't skimp on this many, many times over. How big for the party room? Can you put up one or two walls and a door to make it happen? Seating in the party room for up to 25? 35? Long folding tables, picnic tables, etc. allow for versatility here. Where will your paint display and serving area be? The main front area-can you visualize how many tables and chairs? A two-top means table-for-two, so how many two-tops, four-tops, six-tops? How many shelves to display bisque and finished pieces? Does it have a great display window(s) visible to foot traffic? Will you be offering food or beverages? Will you have a designated area for small children who aren't painting? Where will these areas be located in your studio? When you are looking the place over with the lease agent, be thinking about all these issues.
What kind of studio? Pure contemporary? If you've never been in ceramics before, or worked in a contemporary studio for a few months or more, you might want to start out as a pure contemporary--customer paints on bisque, you dip and fire, they pick up in 3-5 days.
Believe me, you will have your hands so full learning the ropes, getting used to the routine, the first three to six months you are open. The learning curve can be difficult whether you get training or not. After you get comfortable with learning dipping, firing, serving paint, pricing, parties, etc., you can consider adding other crafts such as glass, jewelry, or whatever.
If you have a background in ceramics, or are already trained and comfortable with the 'contemporary' technique, then you might consider adding other alternatives such as potter's wheels, or clay or some other kind of craft right from the start. It can set you apart from the competition. Find out what's hot. Research it as much as possible. If you're not a whiz at it, consider hiring part-time or contract specialists to come in for special parties or events.
Remember, it's not JUST about if you've had a ceramic background, but have you had your own business before? Have you dealt with taxes, landlords, paying bills on time, controlling inventory, merchandising, employees?
Another very important issue to think about; what IF three years into your lease the community or the country grows tired of 'painting bisque'? You must be ready to adapt. There is every indication from the trend-forecasters that arts and crafts will continue to grow and flourish as the baby boomers age and more disposable income is available. The cocooning of America has already begun. Why do you think Home Depot and Lowes are so big? Why do you think HGTV is so hot? Why did the Internet take off? People want to fix up their homes and gardens making them havens, and you can be there for them. Be ready, keep learning about other craft trends and adapt to the changes. Be prepared to provide expanded art experiences for young and old.
There is something I really want to point out to you about this article. For every 'do this' or don't do that', for every average or statistic, there will be an exception somewhere out there in the cosmos that makes up what we call 'our contemporary community'. Yes, we have to take risks; that's what being an entrepreneur is all about, but let's take calculated risks. Don't be a fool and believe that just because you so desperately want something to be true, it will. We all want you to not only open that contemporary studio, but we want you to still be around 5 years from now and happy. Be smart. Do your homework. Do it right.
Okay, so if you've got this far, you need a business plan. What goes into a business plan, where to get the info, insurance and taxes all in the next article! Hang in there! Here's some homework for you to do.
1. Look for several locations using the information in the article. Keep your eyes and ears open. Don't fret if the 'perfect' spot gets leased. Keep looking.
2. Take as many small business tax courses as possible. You won't believe how many different kinds of taxes they want from you.
3. Talk to other tenants at the locations. Inquire about their electric, (Yours might be 2-3 times as much at peak times),water, gas. Do they get along pretty well with the landlord? Is the place kept up? How much longer do they have on their lease? Be friendly with them, but not pushy. They may be marketing and tie-in allies later. Go back and talk to them several times. They don't tell you the bad things the first couple of times you talk to them.
4. Start jotting down costs for expenses as you learn them. You will have two sets of expenses as you progress-one for start-up, one for your monthly projected. You will use these in your business plan. Even if you don't plan on getting a loan, you need the plan and the numbers. Include your salary IN THE EXPENSES. Don't forget loan payments and taxes.
5. Start shopping for a lawyer to look over your lease. Don't settle on the first one. Check references. Yes, you will pay for this service. Include it in your start-up expenses.
6. Ditto an accountant. You will continue to use this person's services into the operation of your business.
7. Start thinking about atmosphere: color schemes, (Color Psychology Article) furniture, lighting. When you go to restaurants, department stores, looking through magazines, watching television: keep your eyes wide open for what makes you feel good, what you like. Make mental notes, or better yet, carry around a notepad.
8. Start ordering bisque catalogs, and browsing through them putting tabs on pages or items you like.
9. Read everything you can on how to start and run a small business.