Prerequisites for a jewelry business
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This document outlines the key prerequisites for starting a jewelry business, including writing a mission statement, choosing a business name, obtaining necessary permits and licenses, setting up financial and bookkeeping systems, finding workshop space, designing an initial collection, researching the market, pricing work, and selling products through various channels. It emphasizes the importance of having a cohesive initial collection to establish a brand identity, carefully considering pricing, and being prepared to continually refine designs and business strategies based on feedback.
Prerequisites for a jewelry business
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- 3. Contents • Write a mission statement • Write a business name • Register for permit • Organize financials • Do a cash flow forecast • Take care of the legal stuff • Set up a bookkeeping system • Find a place to work • Get a hallmark • Design your first collection • Do your market research • Price your work • sell 3
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- 5. Write a mission statement • It is a way of agreeing, with yourself, what the whole point of your business is • It defines what is important to you, what is essential, and what you are willing to compromise. • What are your priorities? • Design? • Environmental sustainability? • Using locally sourced materials? • Profit? • Decide what is important to you and sum it up in one or two sentence 5
- 6. Write a business name • Jewelry business names reflect the store’s offering and brand • So consider the desired inventory and indented consumer demographic • Signaling words such as “affordable” or “haute” help customers determine price range • Jewelry entrepreneurs are encouraged to select names broad enough to grow along with the business • It’s possible to register and trademark the name to avoid possible future confusion with other jewelry businesses 6
- 7. Register for permits • Contact local city hall representative to determine which business licenses and permits are required to start your own jewelry business • Resale tax numbers, required by some states for those selling retail jewelry, can be obtained by contacting your department of revenue sales tax division • This number also permits jewelry businesses to buy jewelry at wholesale prices without paying sales tax 7
- 8. Organize financials • Open a separate bank account for your jewelry business • And consider hiring an accountant or tax advisor for establishing your company’s financial, tax reporting and accounting practices • This may be a good time to determine whether the business will be a sole proprietorship, limited liability company or other organization structure 8
- 9. Do a cash flow forecast • A cash flow forecast is like a bank statement, but in reverse: it shows the future of your bank account instead of the past • You may have heard that most small businesses close because they run out of cash . You may wonder how a business – which is successful in every other way – can run out of money. • Imagine you exhibit at a fair which is successful beyond your wildest dreams. You take several orders for gold and platinum jewelry. The only problem is, you haven’t got enough money to buy that materials 9
- 10. Cont’d… • A cash flow forecast will highlight these danger areas, which will give you a chance to plan how to best deal with them • Going through this exercise to prove that your business can work on paper. If it works on paper, it stands a good chance of working in real life. 10
- 11. Take care of the legal stuff • By legal stuff it means: • Deciding on a legal structure (e.g. sole trader, limited company, etc.) • Choosing a trading name ( which may simply be your own name) • Informing the government of your new businesses • Finding out about your tax obligations • Opening a business bank account ( or at least a separate current account ) • Most of these conundrums can be solved by your accountant 11
- 12. Set up a bookkeeping system • At its most basic, a bookkeeping system simply needs to comprise a list of all your money coming in, and all your money going out • You should retain evidence of all these incoming and outgoing in the form of receipts or invoices • If your business is very small you may not need to divide your expenses into different categories but it is normal to do so • And you can save a lot of money by doing it yourself 12
- 13. Find a place to work • It goes without saying that you need somewhere to work, but you might be surprised just how much space can quickly be taken up not only by your workbench and surrounding filth • But with stacks of paperwork, supplier, catalogues, random tools that you picked up from a car boot sale thinking they might come in handy someday • Don’t limit your potential for growth by setting for a space in which you can barely swing a pendant drill • Create a space you actually want to spend time in. 13
- 14. Get a hallmark • If you are working in precious metals, and you plan on selling your work in other countries • You will need to have your work hallmarked (unless it weight less than the current threshold for each metal) • To sell work without hallmark is illegal, so don’t even consider it • Contact the assay office nearest you for details on how to register your own mark 14
- 15. Design your first collection • Note the word ‘collection’. Before you go out and start selling your jewelry, you need to have a cohesive body of work – and it may be as little as six or so designs – which form a collection • Many people just starting out find this troubling • They think they stand a better chance if they offer more variety. However, look at successful jewelers whose work you admire. • In here central of attraction is not just global brands, but young designer/makers and young brands matters • They each have their own inimitable style. This is what gets them noticed. 15
- 16. Do your market research • Some might do this before designing their first collection • It depends whether your work is design-led or market • A design-led business will aim to create a new aesthetic, not follow an existing one, whereas a market-led venture may seek emulate current design trends, or to fill a gab in the market • Either way, you need to know where your products sit in the grand scheme of things. 16
- 17. Price your work • This is the bit really gets people. Pricing your work is probably the most nerve-wracking part of being a jewelry designer. • Some people first decide how much they want their work to cost, and then produce designs to suit. Most do it other way around, designing as they please and then tackling pricing afterwards 17
- 18. Cont’d… • Pricing isn’t easy, and there are semi-scientific models you can follow, but you should also apply some common sense. Look at similar work and see how much it’s going for. • How do you want to be perceived in relation to other makers or brands-reassuringly expensive or a downright bargain • Take utmost care with your pricing. Produce wholesales and retail price lists(unless you plan on only selling wholesale or only retail) 18
- 19. Sell • There are many ways to sell • Wholesale or retail. Multiple or one-offs. Cash or credit. Most designer/makers start by exhibiting at small exhibitions, fairs, or even street markets • Some are fortune enough to have circle of jewelry-buying friends and family, who then spread their name by word-of- mouth. Some operate solely online • If a particular venue or shop doesn’t work for you, don’t despair – you probably just haven’t found your niche yet. 19
- 20. Cont’d… • Listen to feedback. Keep revisiting your designs, your mission statement, and your pricing. • A bit of tweaking and you will be selling in no time • And a word of warning: it’s not just beginning that’s messy. It’s messy pretty much all the time • But then, if you wanted clean fingernails, you probably wouldn’t be a jewelry designer 20
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