Continued from page 1
There are a number of factors to consider after you decide you want to open a gift shop of your own. A gift shop is a significant personal and financial commitment--- and
amount time and energy you put into your shop will be a big determining factor in your success. It is wise to have some marketing and sales experience under your belt before you take this big step.
TIP: Many successful gift shop owners started out by selling at swap meets!
LOCATION The first thing that usually comes to mind when choosing a location is to find one with largest volume of customers and foot traffic. However, you must keep in mind that a high volume of foot traffic does not necessarily mean a high volume of foot traffic "in your store." If you choose a location in a strip mall near a large department store because parking lot is always full, you'll might find that majority of people in those cars are coming to that mall to go specifically to that large store, back to their car, and home again. Yes, you want foot traffic, but you don't want that traffic to walk past your shop ... you want it to come inside. After selecting several possible locations for your shop, do your homework by spending some time in each area. Watch shopping patterns of people. Talk to other storeowners. Get a feel for what you might look forward to in future. Malls are also viable spaces for a gift shop but check out location of shop inside mall. There are certain areas in malls that offer a great deal less traffic. These are usually less expensive, but make sure you weigh rent reduction against traffic flow.
SQUARE FOOTAGE AND DISPLAY ITEMS The square footage you will need depends upon what you intend to sell and what quantities you want to display and keep on hand in your storage area. Determine space you need by visiting other gift shops. Ask their area measurements. Look at display furniture and cases they are using. Calculate amount of stock you would need to fill an area of that size.
BUSINESS LICENSE As with Kiosks, you will need a business license and a resale number. Again, these are issued by city in which you are doing business, a fee is charged, and license is usually valid for one year. Resale permits are required and are free. Check with your City Hall for more information on both these items. If you plan on opening your store in a regular retail area, you'll want to contact storeowner for information about rental rates, utilities, etc. If you plan on opening in a mall, you will be dealing with Mall Management. Generally information we have given you earlier about Kiosks applies to gift shops, with a few exceptions. The fee structure will be different, and there will be a bit more freedom from strict rules set up for kiosk dealers.
MERCHANDISE AND VISUAL CONCEPTS You have much greater freedom in choosing merchandise you'll be offering for sale at a gift store than you would a kiosk. Because of display and storage space limitations, kiosks generally mean you'll be dealing in smaller items. A gift shop offers you choice of stocking larger items in greater quantities. Storage space is also a plus for gift shop proprietor.
ADVERTISING Advertising a gift shop will be approached from a different angle than from that of kiosk proprietor unless you are operating your gift shop inside a mall. Malls have distinct rules about advertising on premises and Mall Management office will explain those. If your gift shop is not in a mall, or if it is and you wish to advertise apart from mall, you may use everything from flyers to ads in newspapers and on radio (or even television) to mailing lists. Investigate these thoroughly to find out general return (buying customers) you will get for money you spend.
Note: You usually cannot distribute flyers inside or outside a mall. You can, however, distribute flyers inside your mall shop to your customers.
Many forms of advertising can be expensive and some offer little return for your money. This is another case of doing your homework. Find out what other businesspeople near you have been doing and how successful they have been.
RENT AND FEES Gift shop sites can be leased as a temporary tenant (month to month) or leased for a year or more. Length of lease will depend on agreement you and landlord decide upon. If this is your first gift shop experience, a temporary tenant situation might be best option. This gives you a little breathing room so that you can get your feet wet in business, see if you like it, see how successful location is and have option to change anything that is not working for you without being stuck in a long-term lease.
Drawback: Being a temporary tenant means landlord can ask you to vacate, usually upon 30 days notice. On one occasion a gift shop owner was doing well and making money but was asked to move when landlord wanted another tenant in space. In general fees for a stand-alone gift shop (a shop not in a mall) will include:
1. Base lease price
2. Utilities (mayor may not include telephone)
3. Security deposit
If you plan on hiring outside help, you will need to budget in costs of employee wages and any benefits you might wish to offer.
Note: If you are leasing space in a mall, don't assume Mall Management won't negotiate with you. Spaces that have been vacant for a while may be great candidates for negotiation.
INSURANCE Insurance is a necessity in to day's business world, and your local insurance carriers will give you information on both general liability insurance and property damage insurance and rates available for both. If you plan on hiring outside employees, you will need to inquire at your State Offices for Worker's Comp Insurance rules and explanations of how they apply to your business.
CREDIT CARDS It is strongly advised that you have ability to accept credit cards whether your are selling from a kiosk or from your own shop. This will entail contacting a company that supplies needed electronic equipment and hook-ups. The company will charge you a fee for service and this fee, including deposits on equipment, will need to be added into your budget.
GET READY, GET SET. SELL! All of previous information may seem like a lot to deal with, but most of above is a one-time energy expenditure. After initial securing of Kiosk or Gift Shop space, details of running your business will revolve around ordering and restocking inventory, keeping records and making weekly work schedules. It is at this point that fun ... and profit ... of being a shop owner begins
Darren Hendricks has been involved in marketing in one form or another since 1979. He has owned or co-owned 3 successful businesses. He currently owns Far Horizons Gifts & Decor and Far Horizons Home Based Business Program.
