(Close Window)
Topic: Starting a magic shop
Message: Posted by: briansmagic (Oct 9, 2004 02:36AM)
I am curious: what goes into starting a magic shop and how does one go about doing it. I would love to hear anything at all anyone has to say about this: good locations, cost of running the shop, what to stock, employees, taxes, etc.....anything at all. Anyone here ever owned a shop before? Very interested in learning more.....
Message: Posted by: sammhoudini (Oct 9, 2004 03:32AM)
I'm opening one right now in the Southern California area of Temecula. I could likely ramble on forever with what our experience has been.

You're thinking along the right track. Location is very important. The cost of running the shop isn't so bad as it's somewhat fixed. You should be able to get a good idea of your building lease, utilities, even cost of employees if you figure their hours or flat rate of pay.

The biggest expense, one that we had prepared for fortunately, is what the cost is to get to the end result of opening a store. There is a significant cost associated with fixtures and store design. We wanted to do it right and bring in new, modern fixtures and decorate our store environment with classy track lighting, flat panel TV, acrylic displays, etc. If you don't have experience in store design, you can hire people to advise you. That has been by far the biggest expense. I do believe that good planning on that end will pay off more in the long run. We want to be different than many of the magic shops that we've seen before. We want to be modern looking, excel with good customer service, and offer a wide range of products that suit all skill ranges. We want our store to communicate that. Good planning will help here, I hope.

The other thing you should plan for is a flexible timeline. You'll see, if you read my blog, that things don't always go as planned with store development. You should layout all of the steps and consider the timeline. Then...add 30-60 days more at least. That's what I've experienced. You'd be amazed at all there is to do.

Furthermore, for the magic shop to be successful, in my opinion, you need to think about it from the perspective of a "business person opening a magic shop". I think you'll have a lot tougher learning curve if you have little business experience and open the store as a "magician opening a magic store"

Also it's my opinion that many successful businesses must be able to investment spend on the front end when they're in their infancy stage. You need to figure out your inventory costs, promotion costs, advertising, hiring performers/lecturers, etc. Figure you're going to want to spend high on that in the beginning to get the word out about who you are and what you're doing. That in mind, my business plan calls for me not making any real profit for almost 12 months. Something to ask yourself, is could you handle that?

If you get serious, I'd be happy to share with you what I've learned so far. I hope we can reverse the trend that has been seen by so many legendary magic shops. Our grand opening is 10/30. Give me a call if you'd like.

The Trick Shop
(866) MAGIC-04
check out our progress: http://blog.trickshopmagic.com
Message: Posted by: MagicalPirate (Oct 9, 2004 12:22PM)
Temecula must have grown a lot since I left California if it can sustain a magic shop. Magic Shops are run by people who love the magic, I've never seen it be a make a living venture in any of the shops I have known through the years.

In the past the money was there more than it is today. Your biggest competitor will be the internet and more specifically Ebay. Our local shop owner gets them in to have him demo the item then they don't buy from him but on the internet.

Consider also in your decision to open a shop, how much of a market do you really have to pull from. How many performers in your area will buy from you and do you get traffic of performers coming through your area performing that may drop in and buy merchandise.

Do you have a budget to stock your shop. You should expect to spend $20-25,000 in wholesale cost as a minimum to initially stock a fully furnished magic shop that is ready to open its doors. This is your expense in addition to building out your space.

Don't take those fixed expenses too lightly as they can eat you alive. I had a business space here in Longview that ate up $1,000 each month in fixed expenses to keep the doors open. Your sales have to cover those expenses, the cost of goods sold and your marketing expenses.

If you build it they will not necessarily come. People destination shop and don't let anyone tell you differently. I was located next to a bank and they only came in due to my marketing efforts. They didn't stop and say lets check that place out they went on about their business.

If you want to open a magic shop, set one up on the internet and drive traffic to your website. You won't have any fixed overhead other than your webhosting which is cheap. If you can generate interest for your website then you may have a concept that works in your community. Market the website to your community and you will know what they would bring in a brick and mortar set up. If it is profitable on the internet, I would still think long and hard before I made a Brick and Mortar store.

Just as an example on build out costs to get the store ready, I spent $15,000 on the space before I opened and it never became profitable. I closed it so I could quit putting money down that blackhole. Remember that it wasn't my isolated case, 95% of new businesses do the same.

Martin :pirate:
Message: Posted by: sammhoudini (Oct 9, 2004 12:35PM)
Great points, Martin. I think you'd be shocked at how big Temecula has grown. Can it sustain a magic shop on it's own? Probably not. We have already began to get interest from a significant number of consumers in other geographic areas that are nearby. The magic community in Southern California has already been very supportive.

Aside from that, the importance of location cannot be underestimated. We've located in the Old Town area and will get a frequent tourist base with heavy weekend traffic. For them, we carry a wide range of beginner/inexpensive magic, novelties, etc.

We're also testing some marketing/educational programs with the local schools to help raise awareness of our magical arts as well as drive traffic to our store.

Your point on the internet is well taken, and you're right about the hosting. That has been one of the least expensive parts of our total business at the moment, and if I broke everything down into individual categories, I'm anticipating our internet sales to be a more profitable segment of our business.

The Trick Shop
(866) MAGIC-04
Check out our progress: http://blog.trickshopmagic.com
Message: Posted by: jrbobik (Oct 11, 2004 10:02AM)
Another important rule of thumb is when you figure out what you employes are going to be paid and what you want to be paid. Make sure that you have at least six months, (Some experts say aim for a year) of payroll in the bank before you open the doors.

If you are hoping to pay people off the sales coming in it can get quite tricky at first.

John B