I Want to Open an Antique Shop
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We have had many retired people and stay at home moms tell us that they wanted to open an antique shop. They would say either, "I have just too much time on my hands," or "If I had my own shop, I could take the kids to work with me." Well both of those scenarios are probably true but there is more to having an antique shop than just trying to keep busy or getting out of the house. A lot more. 

Not to be negative, but assume that opening an antique shop will automatically be worse than whatever you've been told. This is a risky undertaking, especially in this economy. 

Are there exceptions to this? Of course there are. Are the odds in your favor that you will be one of those exceptions? Sadly, no. At least that is our humble opinion. There's a possibility that we are misguided but we don't think that's the case. We have too many friends who have had to close their shops in the last year - it's a difficult time and we don't see too many signs of improvement down the road. At least not yet.

As much as we would like to be cheerleaders for anyone who wants to start his or her own business, what we really want is for you to exercise some caution.

Let's discuss all of the things that you have to carefully consider before embarking on such a venture.

Location/Traffic
Do you already own a small or medium size building or house that could serve as an antique shop? If you do and you are already paying for it anyway, or if you own it outright - this is a major plus and will go a long way toward your keeping your business running in the black. But only if it's in a good location. Is this building or house situated on a busy street in a business district?

One of the ongoing concerns you will have as a shop owner is getting the necessary traffic. You cannot rely on just those people who will come across you by accident. You need real traffic. 

You will notice that antique shops and antique malls are usually "bunched" together in the same area or district within most towns and cities. People who go "antiquing" love to walk from shop to shop browsing before deciding on the purchases they are going to make. Having a lot of competition around you is a good thing because it generates a lot of traffic.

Rent
If you do not already have a building then you will need to rent or lease one. Do your due diligence. You need to get the best location for the least cost. In most businesses, rent and payroll are the profit killers. In an antique shop you won't be faced with any payroll to speak of but some of the rents can be a bit outrageous. Try to get the best deal you can.

If the location is good but not perfect, perhaps you can negotiate on the price a little or get the landlord to include the utilities in the rent. Anything that keeps your overhead down. If the location isn't good, it doesn't matter how cheap the rent is. Keep looking.

Parking is important as well. If the shop you rent does not have enough parking make sure there is a public parking area very close by. If not, keep looking.

Inventory
If you have been interested in antiques and collectibles for a long time perhaps you have stockpiled some inventory. If you are not sentimentally attached, this inventory could help you get a good head start in your shop. Otherwise you need to make sure you have enough financial capital to cover rent, utility deposits, fixtures and displays such as showcases plus your inventory. You will need to have your shop stocked before you open. Perception is important. You should also have some surplus inventory to replace any pieces you might sell right away. 

Where do you find your inventory? Local auction houses, yard sales, estate sales, flea markets, friends and family and classified ads in the newspaper. 

Advertising
You may also want to consider placing your own ad in the newspaper. Be careful with this - print media advertising can be very expensive. You could also create a website or a blog. The overhead for either of these is minimal and can be very cost-effective. 

You may also be able to get a free press release in your local newspaper. Your local Chamber of Commerce may allow you to post a flyer about your business or leave business cards. Some of these options will not only allow you to generate customers who want to sell merchandise but they will help get you potential buyers as well. Building relationships with local interior designers can be quite beneficial. If you have the type of merchandise they need and you offer them a "trade" discount - they could be your best allies in your quest for success.

Know the Laws
Depending on your location, you will most likely enjoy some walk-ins, people who have things to sell and want you to buy them. There are usually laws that you have to obey when it comes to buying merchandise cold like this from people off the street. Check with your local police department. There is a form you might have to fill out if you buy items in this manner. Be observant. If someone comes in with a pillowcase full of nice sterling silver and he or she look like they slept behind the building the night before, say thank you, but no thank you. 

Watch Your Money
Avoid any needless expenses. The main one that comes to mind is lack of knowledge. Yes, that will be a legitimate expense because lack of knowledge can cost you a lot of money. Learn all about the merchandise that you are going to sell. Buy reference books - they will pay for themselves ten times over. Learn how to distinguish fakes from the real deal. There are some very impressive fakes out in the marketplace.

If you live in a tourist area, take this into consideration when it comes to how much money you think you can make and if you can make enough to cover all of your costs. You may be in a situation where you will make most of your money in a particular "season". The problem with this is that the bills keep coming all year long. You need to be a good financial planner and be able to set money aside during the "good" months to carry you through the "bad" months.

Theme Shop
It would be our recommendation that you do not open a "theme" shop where you only sell a particular type of antique or collectible. On occasion this can work but more often than not it can be detrimental to your chances of succeeding. Different genres of antiques and collectibles fall out of favor and then they experience a comeback a few years later. 

In the antiques business, "what's hot and what's not" is a constant worry. You want to make sure you are diversified. If you have a "theme" shop, then maybe only 1 out of every 10 people who come into your store will have an interest in what you are selling. You may make a sale to that person or you may not. Those aren't very good odds. The broader your selection of inventory, the more sales you will make. 

Name
Choose a catchy name for your shop. Something people will remember. You might also want to consider incorporating under your business name for your own protection. This can be a little expensive up front but it is worth it should something bad happen down the road. Most shops don't do this but you might give it some thought. It will help you sleep better.

Insurance
Another concern is insurance. As we all know, it just keeps getting more and more expensive. It is important that you have liability protection should someone get hurt in your shop. Unfortunately, it is difficult and sometimes impossible to get insurance to cover the cost of your merchandise. Most companies will not insure antiques. There may be some specialists who will underwrite such a policy but we have no idea as to what the premiums might be. 

Such insurance could really be cost prohibitive. If you were to accept consignments in your shop, you will probably have to provide some sort of coverage. If the merchandise is yours alone, you need to decide if you want to pay those premiums or take your chances. 

Credit Cards
You must take credit cards. Period. The math works this way: 
97% of a $100.00 sale is $97.00. 
97% for you and 3% for the credit card company. 
100% of no sale is zero for everybody.

Financing
If you do not have the required capital to get your shop going, think long and hard as to whether or not you want to open a shop at all. If you need to obtain the financing, you are taking a big risk. If you do not succeed, you will be faced with paying back money on something you no longer have unless you declare bankruptcy. 

Should you borrow money from family or friends you can work out the details informally, although you should have a promissory note defining the particulars and all parties should sign it. However, if you have to obtain financing from a bank then there is a good chance you will have to submit a professional business plan. You probably cannot get approved without one. 

A business plan will have to include:

Executive Summary
Mission Statement/Business Description
Market Analysis
Management Plan
Operational Plan
Marketing Strategy
Expense Worksheet
Balance Sheet
Profit and Loss Statement

There are companies on the Internet that sell relatively inexpensive business plan software. They even have plans that target specific business types to include antique shops. 

Established Business vs. Start-up
Check out your area to see if there is an antique shop for sale. Just because a shop is for sale doesn't mean it is not a viable business. It could be for sale due to illness, poor management, or a number of other factors. If the "bones" of the business are good such as location, parking, cost of rent and inventory then this might be a consideration. 

Look at the pros and cons of starting a new shop from scratch or buying an existing one that may already have a following. Initially it may seem that the cost of buying an existing business may be a bigger investment than what it would cost for a start-up, but you could find that the outlay in money is the same. 

A new shop has to be heavily advertised, much more so than an existing shop that has already made a name for itself. This kind of advertising can be costly. Since it will also take a while to build up a clientele in a new shop, your capacity for earning will be down. This, too, is money out of your pocket. If your local Yellow Pages are published just before you open your shop then you have to wait an entire year before you can get that valuable exposure. You should investigate the pros and cons of both of these scenarios and make an educated decision as to which one is the more viable option for your particular situation. 

Alternatives
Before going out on a limb by opening your own antique shop, there are a couple of less expensive avenues you could try first. In other words, test the waters. If you are new at buying antiques and collectibles, you might want to test out your ability to choose the right kind of items by doing an Antiques Show first. A show like this usually lasts for a weekend. You will have to rent a space at the show but that is a small price to pay to see if you can hold your own against all of the "pros". If you do well, then you are onto something. If you don't then you could change the merchandise or the presentation of the merchandise and try another show. 

Another option would be to rent a space in an Antique Mall. You will have to pay for the size space you want, as well as a percentage of your sales to the mall, usually 10% - 15%. However the commission and the rental expense would be much less than what it would cost you to have your own shop. You would not be responsible for utilities, insurance, advertising and all the other expenditures associated with running your own business. Those bills all belong to the owner of the mall. 

Not to mention you would have much more time to find merchandise for your space. You would not be stuck behind the counter all day, every day like you would be if you were in your own shop. As a matter of fact, you could probably afford to have space in three or four different malls in different areas for less money than it would cost for your own place. Think of the extra exposure that your merchandise would get if it were spread around the entire city.

Last Piece of Advice
Regardless of which route you take, either your own shop or space in one or more antique malls, remember you are not the curator of a museum. Most shop owners get it but there are some that don't. You are in this business to make money and the way you make money is to turn over the wares as quickly as possible. You want to buy a lot of pieces and you want to sell a lot of pieces. There is something to be said for "making it up in the volume."

All of us have experienced what it's like to acquire some pieces that are very hard to come by due to their rarity. If you have any pieces like that, take them home and look at them. Get them out of your shop or mall space. Remember your space is "real estate" and you want to make sure that your "real estate" not only pays for itself but makes you some profit as well. 

If your items are priced higher than the market will bear, don't look now but you are a curator. Get out that red pen and start slashing.

Written by Anne Benedetto, Auction House Talk
 All Rights Reserved

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