So you're an indie shopkeeper/small business owner! What's that like?
February 8, 2017 11:34 AM   Subscribe

You: an independent proprietor of a small business or shop, perhaps located in some charming Main Street-style commercial district. Me: Deadly curious about all aspects of your life and job, how you got started, what a normal day looks like for you, how you keep your business afloat in these trying economic times, etc.

Opening up an adorable little shop has always seemed terribly romantic to me (especially a bookstore/stationery shop). But I know juuuuust enough about city bureaucracy, overhead, business taxes, and profit margins to know that behind the inherent whimsy of being your own boss of your own shop, there are probably a lot of headaches, extra work and worry, and behind the scenes networking and other things I know nothing about.

I'm trying to leave this open ended so as not to limit the responses, but here are just a few of the many, MANY things I've wondered about:

-When did you know you wanted to open a shop/start a business? What steps did you take to get you to a financial position where you could leave your day job and do so? How did you secure financing (loan, savings, grants, Kickstarter)?

-How did you find your storefront location (leasing agent, word of mouth, etc.)? Do you own or rent?

-Paperwork: what did you have to fill out beforehand? What do you continue to have to do on a monthly/quarterly/yearly basis? Are you registered as an LLC or something else?

-Vendors! How do you find them? How do you delicately broach the subject of a bulk sellers discount? How do you keep your shop stocked? How do you determine your inventory mix?

-What business administration tasks are you happiest that you paid someone else to do, and which can be more DIY? Graphic design, marketing/promotions, accounting/taxes, contracting/building, decorating, payroll, etc.?

-Employees. And also, how do you pay yourself? (Especially if profits are low.)

-How important is it to network with your fellow local small shopkeepers, especially ones who are in a similar industry?

MOST IMPORTANTLY: What are your favorite/least favorite parts about your job?

Thank you!
posted by helloimjennsco to Work & Money (6 answers total) 25 users marked this as a favorite
Not a shopkeeper but I've known a bunch.

least favorite parts about your job

"OMG, this is perfect!" Pulls out phone, orders it from Amazon.
posted by Candleman at 1:38 PM on February 8, 2017 [7 favorites]

Best answer: Hi! I'm a new proprietress of a darling tiny (90 s.f.) shop! I just opened it 3 months ago and love it.

My answers are a bit non-mainstream, so they might not be helpful, but:

A friend saw a for rent sign on a tiny hobbit-house building in a town 6 hours away from where I lived, took a photo, sent it to me, and I had them put a deposit on it for the the next day. I've never had a storefront, had only been to the town once, and only knew of 2 people who lived one town over. I had no intention of having a brick and mortar store, and no intention of moving. But what's that got to do with living life ;).

So I moved. Arrived 3 days before I was committed to opening the store, and car camped (lived out of my car) for the first month I ran it.

It's adorable, challenging, and a complete unknown. I also moved in rainy season with no place to live and, since it's a summer tourist destination, not a whole lot of foot traffic.

All that being awesome, I do have previous experiences that made that 24 hour decision reasonable.

I have run my own online business for 20 years. I still run it, and the store, until I can transition over. That means I'm looking at maybe 2 years of having 3 businesses.

But that means I have some sales experience, marketing experience, monetary support. I'm self taught in all of it, but I have been 'learning' for many years.

I make my own product, plus sell work by other people I know, so that has my 'vendors' covered. Since it's is slow right now, I get to watch, see, and talk to my customers about the product, which will help me know what to make for the busy season. I do not have an employee yet, but will just have one to fill in when I need to get away, so the situation will be a bit different than a full time employee.

I have experience with taxes, deductions, all that, so, at least for me, the addition of insurance, etc. was surprisingly minimal for me.

I do everything, marketing, design, accounting, construction, etc. But I have a jack of all trades nature and find it an enjoyable puzzle. Plus I have done every aspect of my online business, so it doesn't scare me. That being said, accounting and construction are the two things I would farm out if I could.

Networking with neighbor stores is valuable. I'm learning all about the culture of the area, busy times, local challenges, etc. Plus we will be able to work together to draw in more foot traffic.

What I love, after how damn cute my building is(!), is being able to do absolutely whatever I wish with the store. I like making people happy, and just love it when they are happy to have come in. Conversely, I tend to take it personally when people do not come in in the first place. It makes me feel like I'm failing, but I logically know it's just the season/rain/etc., so I am guessing this personalizing will go away at some point.

I think one thing that you need to take into consideration is what your risk threshold/comfort level is. Can you take a risk and still stay positive as you work through the unknown? Can you fail and get up and keep going? Working for yourself takes a certain amount of willingness to deal with all that. I love my shop, but I will be honest, I have bought a bit more wine that usual, and I have cried once or twice. It is hard. It has to be a labor of love for sure.
posted by Vaike at 1:47 PM on February 8, 2017 [4 favorites]

I had a lengthy talk with a local bookstore owner, and she was going kind of crazy from the number of self-published authors who want her to carry their books. She finally decided to only carry local authors and really limit how long she'll carry self-published books ( she said they don't sell at all - and most of them really need basic editing). She talked about one self-published author who is constantly coming in and asking what she's doing to promote his book (and never buys anything from her). She is a kind person, and she was having a hard time putting her foot down. So if you decide you want to open a bookstore, that's something you'll be dealing with.
posted by FencingGal at 2:23 PM on February 8, 2017 [4 favorites]

How do you delicately broach the subject of a bulk sellers discount?

Do you have a wholesale price list? Or, do you work with retailers? If at something where artists are selling retail -- give them your card, ask them to contact you if they are interested in having you carry their work. Or, please email me your price sheet. (You might need to provide a business licence at some point)

The only thing delicate about it that you would never mention anything about pricing in front of any retail customers of the person or business. Also, avoiding any situations where you might violate the RICO act with anything that could be construed as price fixing -- if you should find yourself in that situation, it is quite proper to excuse yourself from the conversation.

Opening up an adorable little shop has always seemed terribly romantic to me

Protip: go work in a adorable little shop for a while and make sure it's still romantic before you spend a lot of money on this.
posted by yohko at 2:56 PM on February 8, 2017 [3 favorites]

Best answer: Oh hai, I can answer some of these. My husband and two partners just purchased a very local, relatively established sports store. They sell xc skis and bicycles. They bought the store as the owner wanted to retire, and my husband has been a bicycle mechanic for many years. His one partner is a xc ski guy, and the other cone is more of a silent investor. Canada has the business development bank of Canada (BDC for short) which helps small business obtain funding and they had to do pro forma financial statements and a business plan to get a loan. With three partners and a bank loan it was feasible to buy the shop. If they started a brand new shop they would have spent less than half the money on their initial inventory. The old owner owns the building they're in, and they were able to keep the business in the current location for the present moment. I would say 90% of local business owners we spoke to rent, many have been in their locations for many years, and some have been lucky enough to buy their places but when real estate was cheap, like 30 years ago. Some shops are lucky enough to get excellent old school landlords and stay with them for decades where they are immune from rent increases and still pay way way way below market prices. When dealing with brand new buildings and realtors you're quite likely to get gouged, finding one of those rare gems of landlords is pretty important to success, imho.

They formed a corporation in which they are equal shareholders, which is highly recommended. Paperwork to set up a corporation is pretty minimal - maybe 1,000 with a lawyer and you're set. To get financing there was the pro forma financial statements and business plan. They drew up a shareholders agreement, but as a sole owner you won't need that. I happen to be a CPA, so I do the routine bookkeeping/tax filing/payroll. This is not hard if you're an accountant, and if you're not, you need to find one at the outset to set up easy and good systems to follow, and you're set. We use Quickbooks online with payroll module and it's dead easy. Monthly we do not much other than enter bills and reconcile the bank accounts, run payroll every 2 weeks, and file taxes quarterly. Annually we have to prepare financials for our bank and lenders and this is also not hard since our books are so clean. You also have to get a business license with the city, and if you're selling anything to do with food probably jump through health and safety hoops.

This store came with some vendors, but we had to find many new vendors to expand the bike side of things, which is my husbands forte. You basically google the products you want to carry, locate the distributor and sign up for a dealer account. They will want a credit app to sell you items on credit, and will be cautious with a new vendor. Some will require prepayment for the first shipment or so, so be prepared with a decent sized credit card. We were lucky in that our inventory mix was largely determined by existing inventory, but if we had to start from scratch, it would be harder. It really really depends on what you're selling. You want to find unique vendors but not so unique that it's hard to get customers to take a chance on the product. So I'd say a 70-30 mix of established brands and unique quality smaller vendor items. All distributors will offer volume discounts so as you buy larger runs of product you get better prices. Payment terms can also be a bit negotiable.

-What business administration tasks are you happiest that you paid someone else to do, and which can be more DIY? Graphic design, marketing/promotions, accounting/taxes, contracting/building, decorating, payroll, etc.? - Depends on your strengths immensely - if you're a great marketer and can write excellent blog posts that people find and read and like, stick to that. If you find bookkeeping easy - keep it in-house. It's critical to get a few things right at the outset, like setting up a corp and getting accounting in order and then running things becomes routine and easy. If you're always scrambling and putting things off the stress can be enormous. Budget for 2-5K for professionals at the outset - the lawyer and accountant to set things up smoothly and properly. It's way easier and cheaper than trying to fix bad business practices later.

-Employees. And also, how do you pay yourself? (Especially if profits are low.) Heh. Currently my husband is the only full time employee of the store (out of the partners both of whom have day jobs), and is not yet drawing a wage. We're in the middle of a deep recession (oil slump) and sales are down for ALL local stores up to 30%. This is not a great macro economic environment. We are accruing his wages in the books so that there is a liability to be paid out when the store can. We do have lots of staff on the payroll, many of which came with the store. Generally this business has potential to grow, but until it does and until the recession lets up, it's difficult. Having said that, I do NOT recommend a 'traditional' retail store. The margins are not that high, in the 25-50% realm for sporting goods, and with employees, rent, etc. it's not an easy business to grow. What I DO recommend is neat niche goods that can offer higher margins. We have a mid-century furniture store that does very well with 300% margins. They also have one of those amazing rents that really helps in a very chic area of town. Across from them is a glass vase store, offering work of art vases and glasswork, probably also at 300-1000% margins. Near them is one of those neat knitting stores with mounds of colorful yarn and paraphenalia. They've literally outgrown their present location and are moving to a bigger one. We're in a large city for reference. An upscale knife store does very well, selling Japanese and other high end knives. And beside them is an amazing spice store, like a brick and mortar Penzey's that is also insanely busy. So depending on where you are and where your shop is, there are ways to find profitable gaps in the marketplace.

-How important is it to network with your fellow local small shopkeepers, especially ones who are in a similar industry? Pretty darn important - there is largely a spirit of cooperation among small business owners, and we've found them so willing to help and share knowledge.

MOST IMPORTANTLY: What are your favorite/least favorite parts about your job? I'll speak for both of us here - the neat parts are actually running the place, and seeing it take baby steps toward success. In our first year we've implemented a computerized inventory and point of sale system (old owner had a till and no computer inventory), cleaned up the cluttered store, and are pushing hard to get marketing up and running. We're paying someone to revamp the website as it's outdated and will implement online sales. It's exciting to get compliments from customers on how good the store looks, and with most of his old employees there's a sense of continuity and evolving the store, not doing something so new that everyone hates it. The worst parts is that it takes 2.5 people to manage it - there's so much to do - there's my husband doing the daily operations management - scheduling people, delegating tasks, managing inventory orders, reorganizing the space. There's his business partner that handles all the seasonal orders, website content, cash flow and financial management. There's me helping out in every capacity after work and occasionally on weekends with accounting, emails, special orders, paperwork, marketing. However, this is a large and established store that is very labor intensive - ordering stuff, unpacking it, fitting customers into equipment, building bikes, seasonal changes. A smaller store with less product variety and seasonality of stuff would be much easier and can grow slowly. It's a lot of fun, and CAN be quite profitable, but I would find a niche you enjoy in a market that can support it, and hope some stars line up with landlords and rents. since this is a novel, memail me if you have any questions.
posted by tatiana131 at 4:26 PM on February 8, 2017 [3 favorites]

After managing a large used bookstore for nine years, I opened my own used bookstore in 1997. Doing everything yourself is a huge burden and doesn't leave much time outside of work. Besides having regular hours for customers, there's all the things that have to be done outside of those hours: visiting homes to see their book collections and buying inventory, networking, getting ads ready, checking in with dealers/junk shops for inventory etc. etc. One thing to know about used books shops is that you're always cash poor and inventory rich; unlike a new bookstore, you buy the books outright so mistakes sit on your shelves and take up space. Used book dealers also have to have knowledge of a great span of publishing, up to 200 years ago (and much more if you're a rare books dealer), unlike new book dealers who take books on consignment from distributors and can return unsold items. Used book dealers also have to clean books they've bought—they might have been in basements for years, for example—and each book has to be priced. All of this is time-consuming. I finally closed my store in 2005, having acquired high blood pressure and hives. I loved being a book dealer but having a store of my own finally became too much.
posted by MovableBookLady at 6:18 PM on February 9, 2017 [1 favorite]

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