Friday, April 6, 2012
shop talk: budgets
a lot of you have asked about budgets, whether of time or money. and seriously, this is the hardest part of owning a business. for starters, i am HIDEOUS at managing money and, well time too, truth be told. but i'll try and give you some helpful tips that i've picked up along the way.
as i said earlier, i had enough money set aside to get through my first year of rent plus some extra for my start up costs. i could tell you how much, but it wouldn't necessarily be relevant to your costs. my rent is VERY reasonable (read CHEAP) because my landlord is insanely generous. however, before you delve into gathering inventory or even considering starting up a business, you need to figure out what the going rate is in your area. your rent is the absolute constant of every month, and it will have to be paid if you sell a single item or not. keep that in mind and make a real effort to find a space with a feasible lease. you also need to consider the costs of display pieces for the shop, window decals, phone setup, internet (and anything to do with 'business' is grossly overpriced), credit card machines, licenses, whether or not you want to insure your inventory, shopping bags......the list seriously goes on and on. all the little things that just begin to add up. make a list of all those things and make sure your budget accommodates them.
we do everything pretty old school around the shop. i don't have a fancy computer system or software program for my stuff. i make my own clothing tags, i use a calculator and receipt book for purchases and i've refinished flea market furniture for displays. i want things to be easy and kind of crazy eclectic. that's just my thing. and i could spend a ton of money making sure all my hangers matched and use scan guns and bar codes for entering items into a program or whatever, but i'm never gonna get that money back. my customers aren't going to pay more for fancy. they just want cool stuff.
and if you aren't good with budgets and all this kind of stuff, then factor in an accountant. matt does all that for me. he likes numbers. they give me the shakes. he created a monthly spreadsheet for me and i just enter in my sales and he pays my taxes for me because otherwise the IRS woulda come looking for me looooong ago.
now time. budgeting time can be tricky. i know business owners who work ALL THE TIME. if you're not working you're not making any money. even if you're not at the shop, you're thinking about it and preparing for the next day or whatever. hahahaha! that is so not me. i am one of the laziest small business owners on the planet. and i still make money :) i have a family that i love way more than my store and i want to spend time with them. sure they come and hang out with me a bit when i work on saturdays and go thrifting with me and that's super fun. but, you have to carve out time for yourself and your loved ones. you have to shut it off at the end of the day just like with any job.
i love that small business commercial about 'dave' and he's everything from the copy guy to the IT guy and everything in between. that's exactly what owning a store is like: you're it. i don't have employees. i have to close the shop and go to the supply store when i run out of something. i have to rearrange schedules with my friend christina (who owns the gallery next door) if i am out of town or have an appointment. i have to pay someone to watch the shop if i go on vacation. i can sit ALL DAY LONG at the shop and no one comes in and buys something and then i don't get paid that day. i've just donated my time. be prepared for the days that suck (which can also turn into weeks and months that suck. that's why you save your first years rent!!!). and make sure you love what you do.