Julie Milazzo on mon 18 mar 02
Hey everyone, I don't know how many of you are gallery
owners out there, but I'm having a bit of a hard time
projecting future sales, which I have to do as part of
a business plan, in order to get a loan. I honestly
have no clue what to expect, and was hoping that a few
of you wouldn't mind my incredibly intrusive, nosey
question about how much money you can expect to make
per month? I know that's it's going to be different
everywhere, and I know that I would feel funny about
giving away my financial information on Clayart, but
when I projected that I thought I could sell around
fifteen hundred dollars worth of work per month, the
Small Business Association guy laughed at me, and said
I needed to be more realistic. He told me that I was
lowballing it, and I told him that these were just
projectiond for the first year, and that I'd be lucky
to break even within the first two years, and that if
I made much more than that I wouldn't need a loan, but
he wants some solid numbers. Anyway, if any of you
have any information on monthly sales, I would
appreciate it. I don't need names, or anything else
that's personal, but some kind of a ballpark figure
could help me figure things out on this end. I
appreciate it. Thanks. Julie
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Longtin, Jeff on tue 19 mar 02
Just a thought Julie:
You may want to sit down and make a bunch of pots and time each part of the
process. With this information you could then calculate what you yourself
could produce in any given day. Multiply this figure by the average amount
of days you work each month and this concievably will be your gross income.
Then calculate your expenses based upon how much you've calculated you can
produce. Subtract the one from the other and you get your profit. I know
this sounds really simplistic but it is a good starting point.
If you come up with "pie in the sky" figures just to satisfy what you think
they want to hear lenders tend to look at you with skepticism. I spent a
year writing a business plan and getting feedback and most lenders want
numbers YOU have generated not what someone else can do. Also, don't think
showing profitability is what a lender wants to see. They would prefer to
see you stay in debt while you build your business,i.e. to see you pour
money back into the business rather than back into their pocket. The biggest
fear I heard from most lenders is that you won't ask for enough money and
that you will run out before you have established a viable business.
Also remember to calculate your costs for a minimum of 3 years. Some will
want a 5 year plan.
I found the experience very frustrating though! Local "community" lenders
want to see business plans for small amounts, since that's all they have to
give, while big lenders, like national banks, want to see a plan that
anticipates "growth". Giving the wrong kind of plan to the wrong group was
just a waste of time.
If you are seriously looking for money though be prepared, asking people for
money gives them license to rip you to shreds and believe me they will! One
small business adviser said, about my Braille cups, "This is a stupid idea
and this is a stupid name, give up immediately!"
Good Luck
Jeff Longtin
-----Original Message-----
From: Julie Milazzo [mailto:snotpot69@YAHOO.COM]
Sent: Monday, March 18, 2002 5:08 PM
To: CLAYART@LSV.CERAMICS.ORG
Subject: request for advice on projected sales
Hey everyone, I don't know how many of you are gallery
owners out there, but I'm having a bit of a hard time
projecting future sales, which I have to do as part of
a business plan, in order to get a loan. I honestly
have no clue what to expect, and was hoping that a few
of you wouldn't mind my incredibly intrusive, nosey
question about how much money you can expect to make
per month? I know that's it's going to be different
everywhere, and I know that I would feel funny about
giving away my financial information on Clayart, but
when I projected that I thought I could sell around
fifteen hundred dollars worth of work per month, the
Small Business Association guy laughed at me, and said
I needed to be more realistic. He told me that I was
lowballing it, and I told him that these were just
projectiond for the first year, and that I'd be lucky
to break even within the first two years, and that if
I made much more than that I wouldn't need a loan, but
he wants some solid numbers. Anyway, if any of you
have any information on monthly sales, I would
appreciate it. I don't need names, or anything else
that's personal, but some kind of a ballpark figure
could help me figure things out on this end. I
appreciate it. Thanks. Julie
__________________________________________________
Do You Yahoo!?
Yahoo! Sports - live college hoops coverage
http://sports.yahoo.com/
____________________________________________________________________________
__
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You may look at the archives for the list or change your subscription
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Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
Janet Kaiser on tue 19 mar 02
We had the same problem when we started out, Julie. How to project for
X people, X days open per week / month / year, X sales, X average
sale, X average profit per sale, blah, blah, blah. How can one do that
when it was a brand new gallery, in a building never used for business
before, nowhere near other shops or retail businesses, etc. etc.? It
was all simple guesswork. Eckhard is an accountant, so he did it all.
It all sounded very convincing at the time and got us the bank loan,
BUT it has been nothing near the true picture.
Without knowing your situation, it is difficult to compare. For
example, our projections have to take October to Easter as
none-earning, indeed loss making months. All the lighting, heating and
other overheads but zero income. I also presume you are making pots,
as well as selling? The sales will depend so much on production... How
many pots can you make versus sell. One hopes that you will sell all
you produce, therefore that could be your best bet to use as a
starting point.
Starting with number of pots you produce per day, week, month, year.
Then work out all the other answers: how much turnover / gross profit
/ net profit per pot (average). That way it makes it much more
manageable and "real". Stay realistic and think of time out for
illness and holidays, as well as all the other work running a gallery
includes... Paperwork, accounting, banking, publicity, collecting
materials, etc.
The other part will be the number of people visiting the gallery
versus the average $ sales. In 2001 we had just under 10,000 visitors
(excluding children) or an average of 40 per day open. They spent
$60,000, so the average sale per customer was $6. Turnover @ $60,000,
artists receive $40,000 so our gross profit is $20,000. Subtract
overheads of $9,500 which leaves $10,500 "net profit" for Eckhard and
me per annum or about $5,000 TAXABLE income each. What we have after
the tax and insurance men have called I do not know. (I don't want to
know!! It would be too depressing, especially as we cannot afford to
save for a pension!!)
However, only every 10th visitor buys anything at all and because we
sell paintings up in the £100s (£600 max.) as well as mid-range work
(£10-£200) like ceramics, down to cards at 90 pence... Well the
average sale may be $6 per person in theory, but the practice is very
different. Eckhard does not get confused by this sort of thing, but I
do!!!
What I have learned to appreciate, is the old German saying:
"Kleinvieh macht auch Mist" Roughly translated: small animals also
produce manure! So those sales of 90 pence add up to a considerable
amount over a whole year. Which is probably why Sheron's art centre
have the cards and low-cost items and not the art and the pots in the
middle of the showroom!! The Accountants have probably pushed for that
little bit of "sound business practice". Our business advisor just
shakes his head sadly when I proudly declare every 10th person buys
SOMETHING. Apparently this is a business failure... Every third person
should be buying... If The Chapel of Art was run as a proper
money-making outfit, we would have Celtic t-shirts and Made in China
mugs filling at least half the available space, if not 80% (to be
realistic). But you don't want to hear that!
I hope this helps a little? Good luck with your sums!
Janet Kaiser
The Chapel of Art / Capel Celfyddyd
Home of The International Potters' Path
8 Marine Crescent : Criccieth : GB-Wales
URL: http://www.the-coa.org.uk
postbox@the-coa.org.uk
Jennifer F Boyer on wed 20 mar 02
Or go at it with the attitude that you will sell everything you
make: figure out how much pottery you can make in a month, or
how many firings you can do in a month and the retail value of
each firing. Then figure out a(arbitrary but based on local
sales opportunities you know of) percentage of retail,
consignment and wholesale you think you will have.
Totally Fictitious Example: You can make 27 small pots and 9
large pots in a day. These pots take 3 more days to trim,
decorate and glaze. So you can make this many pots in 4 days
with the 5th to do business stuff that week. It takes 3 large
pots with 9 small pot fillers to fill a shelf of you kiln and
you can fit 3 levels in you kiln. So you can fire this once a
week. You want to get 50.00 retail for the large ones and 20.00
for the small ones. So each firing has 990.00 retail in it and
you expect one second per firing. That makes it 970.00, or
940.00 depending on what screwed up ;-). Average that to 955.00
per firing for retail firsts. You want to sell 60 percent to
that retail, 20 percent consignment and 20 wholesale. Do that
math to figure your total sales that week......
Take Care
Jennifer in Vermont where winter decided March is a good time
for snow.
~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
Jennifer Boyer mailto:jboyer@adelphia.net
Thistle Hill Pottery
95 Powder Horn Glen Rd
Montpelier, VT 05602 USA
802-223-8926
http://www.thistlehillpottery.com/
Never pass on an email warning without checking out this site
for web hoaxes and junk:
http://urbanlegends.about.com/
~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
Julie Milazzo on thu 21 mar 02
Jeff, thanks for the advice, and I hope you didn't
listen to your small business guru when he told you to
give up on the braille cups. They sound very cool. My
small business guy has also given me some interedting
advice, that I am not going to follow. I moved in
October to an area of South Carolina that has a very
strong Gullah community. In case you know nothing
about them, they are descendents of ex slaves that
were stuck on the island that I live on now. They were
put there after the war, in hopes that they would just
die out, so the white man could reclaim the land
without any responsibility to the Gullah folks.
Anyway, they flourished instead, cultivating the land,
developing schools, a strong art community. Then the
white guys built the bridge from the mainland, once
they realized that a cool area was being developed.
So, I haven't felt any animosity, but I would imagine
some of the people here are a little wary anytime a
white person buys property here. I've decided to be as
unobtrusive and as sensitive as possible, and everyone
I've met has been great. So now my small business guy
wants me to go to the place where they give Gullah
tours, and ask them to stop at my studio so that I can
do demonstrations. Ummmm... I'm white, I would feel
like I was leaching off of their success, and I bet
that the people on the tour bus would be bright enough
to figure out that I'm not Gullah. If there was an
event or tour that encapsulated St. Helena Island in
general, I'd be fine with that, but this guy is really
asking me to be insensitive. Anyway, I wouldn't mind
hearing a bit more about these braille mugs. I'm
seeing texture... Julie
Jeff" wrote:
> Just a thought Julie:
> You may want to sit down and make a bunch of pots
> and time each part of the
> process. With this information you could then
> calculate what you yourself
> could produce in any given day. Multiply this figure
> by the average amount
> of days you work each month and this concievably
> will be your gross income.
> Then calculate your expenses based upon how much
> you've calculated you can
> produce. Subtract the one from the other and you get
> your profit. I know
> this sounds really simplistic but it is a good
> starting point.
> If you come up with "pie in the sky" figures just to
> satisfy what you think
> they want to hear lenders tend to look at you with
> skepticism. I spent a
> year writing a business plan and getting feedback
> and most lenders want
> numbers YOU have generated not what someone else can
> do. Also, don't think
> showing profitability is what a lender wants to see.
> They would prefer to
> see you stay in debt while you build your
> business,i.e. to see you pour
> money back into the business rather than back into
> their pocket. The biggest
> fear I heard from most lenders is that you won't ask
> for enough money and
> that you will run out before you have established a
> viable business.
> Also remember to calculate your costs for a minimum
> of 3 years. Some will
> want a 5 year plan.
> I found the experience very frustrating though!
> Local "community" lenders
> want to see business plans for small amounts, since
> that's all they have to
> give, while big lenders, like national banks, want
> to see a plan that
> anticipates "growth". Giving the wrong kind of plan
> to the wrong group was
> just a waste of time.
> If you are seriously looking for money though be
> prepared, asking people for
> money gives them license to rip you to shreds and
> believe me they will! One
> small business adviser said, about my Braille cups,
> "This is a stupid idea
> and this is a stupid name, give up immediately!"
> Good Luck
> Jeff Longtin
>
>
> -----Original Message-----
> From: Julie Milazzo [mailto:snotpot69@YAHOO.COM]
> Sent: Monday, March 18, 2002 5:08 PM
> To: CLAYART@LSV.CERAMICS.ORG
> Subject: request for advice on projected sales
>
>
> Hey everyone, I don't know how many of you are
> gallery
> owners out there, but I'm having a bit of a hard
> time
> projecting future sales, which I have to do as part
> of
> a business plan, in order to get a loan. I honestly
> have no clue what to expect, and was hoping that a
> few
> of you wouldn't mind my incredibly intrusive, nosey
> question about how much money you can expect to make
> per month? I know that's it's going to be different
> everywhere, and I know that I would feel funny about
> giving away my financial information on Clayart, but
> when I projected that I thought I could sell around
> fifteen hundred dollars worth of work per month, the
> Small Business Association guy laughed at me, and
> said
> I needed to be more realistic. He told me that I was
> lowballing it, and I told him that these were just
> projectiond for the first year, and that I'd be
> lucky
> to break even within the first two years, and that
> if
> I made much more than that I wouldn't need a loan,
> but
> he wants some solid numbers. Anyway, if any of you
> have any information on monthly sales, I would
> appreciate it. I don't need names, or anything else
> that's personal, but some kind of a ballpark figure
> could help me figure things out on this end. I
> appreciate it. Thanks. Julie
>
> __________________________________________________
> Do You Yahoo!?
> Yahoo! Sports - live college hoops coverage
> http://sports.yahoo.com/
>
>
____________________________________________________________________________
> __
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change
> your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be
> reached at
> melpots@pclink.com.
>
>
______________________________________________________________________________
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change
> your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be
> reached at melpots@pclink.com.
__________________________________________________
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