Question:
I would like to open a quilt store in the next year I have been researching running a business and everything involved (or what I think is involved).  I love to quilt, and I love art and artwork I love to teach and I LOVE fabric.  I have a 14 foot professional quilt machine available to me I REALLY want to have a business of my own.  I am so tired of working at what I enjoy "ok" and not having time for what I love to do!  (of course, I know that running a business won't allow me much free time either, but at least I'd be around what I love) Here are some of the questions

#1)  How much inventory (bolts of fabric) should I start with?  And how many bolts of each pattern?

#2)  Approximately how much is the monthly cost of a store?  I know I need to consider a lease or mortgage on the building, but what about other bills (I know about electricity etc.  what I am asking is what isn't "common sense" that may surprise me!

#3)  What can I expect in monthly / yearly income?  I am sure there is a mark up on a bolt of fabric, but what percent?  How much is the bolt?  I know there is approximately 12-15 yards on a bolt how can I find this out?  This is the most important question because I need to be able to support myself and decide what my start up and running costs will be for my business plan I am aware that these are "private" questions, and please don't take offense to them but I am lost as to how to figure these things out and 'estimate' the income of the business. I have heard that all quilt shops are 'subsidized by husbands' (which I don't have one of those) and I have heard that that is totally bogus and that it is a very feasible and livable income I really need to get some answers before I make the jump head first Is there a sympathetic quilt shop owner or two willing to share some of their experience with me?

Answer:

I'm from Canada, so things may not work the same way but you'll have your rent, utilities (sometimes they are included in your rent, you'll have to negotiate this I suppose), there is also a business tax which is based on the size of your store.

As for prices of the bolts, I can't help you there but normally stores sell for at least 100% profit, now does this happen in quilting stores too?  I don't know but I would imagine so.

Our quilt shops here keep one bolt of each and they have about 2000 bolts.

You'd have to check with the bank to see if how much of a line of credit you would get in order to open a shop.  As for rent, it varies depending where you live, so no one can really give you a ball park figure there, you'd have to look at that on your own, then call the city and see how much the business tax would be.  If  you're in the US, you will be able to deduct all kinds of things on your income tax (check with your accountant).

I have a few friends who have businesses and they said that they didn't make any profits before a couple of years, so it would be a long term thing.  The key is not to start off too big, but have enough of everything so that a quilter would be interested.  Use local papers for publicity, etc

Perhaps what you should look into is an online "store" where people can buy online and you could store the bolts at your house (maybe in your basement) and when things start taking off, then you look into expanding.

My husband taught "how to start your own business" a few years ago. Two things I remember him ALWAYS saying.

1.  Make a 5 year plan!

2.  HOW are you gonna make money?

If you live in a small area (as I do) I have seen quilt shops go under very easily here.  The one closest to me now, is a wonderful little shop, but she too has been in business only for about three years I think, and I've spoken with the owner.  She says if it weren't for their classes (and they have some going year round), she could not afford to keep the shop open.

I am so tired of working at what I enjoy "ok" and not having - time for what I love to do!  (of course, I know that running a - business won't allow me much free time either, but at least I'd be - around what I love)

From your questions, it sounds like you still have a LOT of research to do. I'll give you some general answers, and a couple of suggestions.

First, you really, really, really need to get your business plan done. That will answer some of your questions about how much income you can expect. No one else can answer that, because it's so individual. What type of area are you in? How much quilting is going on? Is there a demand for high end fabrics or low end? Is the market already saturated with LQS's? And if there are few in your area, why is that???

Your local SBA can point you to local resources for getting that business plan done. And those local resources should be more valuable than we are, because they should know the ins and outs of doing business in your community. (and every locality has its own quirks about business!!!)

Until you have your financials done, it's too early to ask how many bolts of fabric you can carry. That will depend on your projected sales and how much cash you have. (As a new business, you're going to have to pay for lots of stuff up front.)

Are you planning on having employees? There's lots of costs there that will surprise you (employment taxes, worker's comp, unemployment insurance, plus much more). If not, do you have a plan on how you're going to cover all your store hours, teach, and use the quilting machine? (and if you do, share it with us. I really need to clone myself!)

Have you worked in an LQS before? If not, why not? Sure, the pay often isn't wonderful, but they will actually be paying you to learn what you want to know. Plus you'll learn what's selling, you'll make relationships with the wholesalers, and you'll see a bit of what it takes to run a shop.

I wouldn't count on making an income for yourself the first year of owning a retail business. I know, it sounds like the money will pour in (after all, you buy fabric for $4.50 a yard and sell it for $9.00 -- what could be easier?), but there are lots of start up costs (fixtures, advertising, inventory, licenses, machinery, leasehold improvements), and it usually takes a while for the customers to come in on a regular basis. Plus, although you might mark up the bolt 100%, you won't really make that. Every time you cut you'll lose a few inches. Your customers will expect sales and frequent buyer discounts. Stuff will happen.

Have you considered other options than opening a LQS? Teaching, machine quilting, and binding are things you can ease into while still employed elsewhere (or while getting experience at the LQS).