Art Glass Studio Business Plan
PHYLLIS FARMINGTON, ART GLASS
76532 Rugby Court
Dayton, OH 45429
When selling art or any unique product, the market becomes somewhat unpredictable. Understanding this to be true, this business plan lists many ideas for reaching potential buyers. As exposure increases, so do sales, and this artist enumerates several ways she plans to come in contact with consumers. She also explains a policy that avoids any conflict between her own sales and the sales of her goods by retailers, both important parts of maintaining a healthy business climate.
- HISTORY AND DESCRIPTION OF BUSINESS
- PRODUCT AND SERVICE
- TARGET MARKET
- PRICING POLICY
- MARKET STRATEGY
- SHARE OF MARKET
- PROMOTION AND ADVERTISING
- EVALUATING RESULTS OF ADVERTISING
- START-UP COSTS
- BALANCE SHEET
- SALES FORECAST FOR FIRST YEAR
- EMPLOYMENT HISTORY
HISTORY AND DESCRIPTION OF BUSINESS
Phyllis Farmington, Art Glass, is a company that designs and produces handcrafted jewelry, as well as decorative bowls and plates. The business is operated by artist Phyllis Farmington. Ms. Farmington has been working with glass for the past year, and has began to display and sell her work as of December 1991. These pieces may be seen at numerous art galleries in the Dayton, Ohio area.
PRODUCT AND SERVICE
To create her product, Ms. Farmington works with glass manufactured by the Watershed Glass Works. These glasses are designed to be compatible with one another when they are fired in a kiln. The wide range of colors available make it possible to create an almost unlimited range of designs and patterns. Some of these glasses have metallic and iridescent effects, and are available in both transparent and opaque type. Designs are created by layering different pieces of hand-cut glass on top of a piece of base glass. Next, the piece is fired at temperatures up to 1600 degrees. This causes the glass to soften and partially melt, or "fuse" together. The glass is then slowly cooled to room temperature. Often these pieces are fired a second time after having been painted with glazes of gold, silver, or platinum. These glazes are bonded to the glass and become permanent and long wearing.
Working in this manner, the artist produces earrings, pendants, pins, and bolo ties. Metal jewelry parts are attached to the pieces with epoxy and are placed onto decorative cards, which are then hand-signed. The owner offers these jewelry items individually, and also in matched sets.
In manufacturing her bowls and plates, Ms. Farmington utilizes molds made of fired ceramic. She slumps glass into these molds, and after the glass is cooled, it takes on the shape and form of the mold. Some of these plates are very simple in shape and take their designs from the patterns already found in the glass. Others are decorated in intricate patterns designed by the artist.
Ms. Farmington's work is functional, unique, and beautiful. She designs her pieces with a contemporary flair, using bold colors and striking patterns. Her work is influenced by international folk arts, and elements of African, Slavic, and Middle Eastern art grace her creations. Ms. Farmington brings her unique perspective to her designs and maintains very high standards of quality.
Whether worn with casual clothing or evening wear, her jewelry is eye-catching and each is designed to be a conversation piece. With proper care, these pieces of wearable art will give years of enjoyment.
Her decorative plates and bowls are attractive and useful. Whether displayed in the home or in an office, they create a focal point and enhance the environment. These vessels are beautiful, yet durable. The colors in the glass are derived from metallic sources and, as a result, do not fade over the years. They may be displayed in areas where there is bright sunlight, with no danger of colors being affected, as in the case of a watercolor or oil painting. In fact, these vessels are at their best when seen with light flooding through them, and the interplay of colors that result are a delightful characteristic of art glass.
The owner can custom design work to suit a client's needs. She can design jewelry to match a costume, create a work of art to be used in the home, or custom design art glass for display in an office setting. She offers free delivery, and will do price quotes at no cost to the client. Ms. Farmington believes in having "something for everyone." She strives to maintain a balance of artistic integrity as well as pleasing her clients. Whether a client purchases fun, affordable jewelry, or one of her more expensive fine art vessels, she maintains the same quality of excellence that her clients deserve.
Phyllis Farmington operates her business out of a building that is owned by her husband, fellow glass artist Mark Farmington. The building is located on Dayton's northwest side. The building is 3200 square feet in size, and has a parking lot adjacent. It is situated in a location that is zoned for commercial use, three quarters of a mile from an active shopping area.
The building has previously been used as a production shop only, but Ms. Farmington, together with her husband, are renovating the property for the purpose of expanding into retail sales. The back area which was formerly used as a storage area, is being developed as the main production area. The Farmingtons have recently partitioned off this previously unheated space and installed a heater. Although this work area needs further development, it is now possible to utilize this space as a production area. This leaves the more attractive front half of the building free for use as a retail display area. Ms. Farmington will be able to use this as a location of special sales throughout the year.
This location does not put the owner in a good position to reach her target market. However, she will continue to retail her work out of galleries and gift shops to reach these customers. The location is excellent for manufacturing and storage purposes, and the owner is able to have access to equipment and tools previously purchased by her husband. This eliminates the necessity of purchasing such items as a glass kiln. The owner also is able to utilize her husband's computer and software and share office space with him.
One strong advantage of this location is that the owner will be able to help build her customer base by tapping into her husband's already established clients. Mr. Farmington was the artist selected to do the art glass restoration at a local historical landmark, which was designed and built in 1910 by Frank Lloyd Wright. This restoration received a Presidential Award for excellence in 1989, being judged as the finest restoration of a historical building for that year, on a national level.
Mr. Farmington uses his contacts to help promote his wife's business, and recently Ms. Farmington was able to make a $300.00 sale from one of these contacts. Her association with her husband's business helps to open doors for her when doing promotional presentations as many people in the area are familiar with her husband's work, and it creates a point of interest that she can use to promote her own company. The owner will also use her husband's contacts to build her mailing list.
This location does not have a sign that extends away from the building. However, there is a sign that will be completed in the near future and put into place. It is made of stained glass, is twosided, and lights up at night. This sign will be an eye-catching display, not only promoting the location of the business, but as an example of what can be done in the medium of glass.
Ms. Farmington has two target markets for her artwork. For her jewelry, she will be marketing primarily to middle income women ages 18 to 40. The main way for her to reach her target market will be through sales of her product at various retail outlets. She also will sell a certain percentage of work out of her location, but realizes that this will require advertising and promotion over a period of time.
Ms. Farmington received a very positive response at a local gallery from the college students who shop there. Her jewelry especially appeals to young persons who are trendy and enjoy artistic things but would not be able to afford an expensive piece. These persons would be more likely to purchase at a gift shop rather than a high priced gallery. The owner will be placing work in areas where colleges are located in order to reach this market.
The owner will be placing her work in gift shops that sell to persons purchasing gifts for holidays and other special occasions. Recently, the owner visited a nearby floral and gift shop, and felt that it would be an excellent place to show and sell her work. Such shops that sell flowers and gifts have a high traffic and are very busy during holiday seasons. Shoppers can purchase flowers, gifts, and cards, all in one location. When Ms. Farmington stopped in to this shop close to Valentine's Day, it was so busy that she was unable to speak to anyone. At the counter she observed a woman who was asking the sales clerk if they carried any unusual glass bowls. The clerk responded that all they had was what was on the shelves, but that they would be carrying new merchandise shortly for the spring season. Ms. Farmington was able to obtain a card with the buyer's name and will be contacting them.
Ms. Farmington will be targeting another segment of the population for her more expensive items. These will be persons with a higher income level who purchase fine art for their home or office. These persons also purchase items as gifts for others for special occasions such as holidays or anniversaries. She will be targeting professional persons with an income level of $40,000 and up. According to American Demographics for 1990, there are approximately 166,000 persons in the surrounding area who fall into this income bracket. The age range is from 35 to 65, and they tend to be homeowners, single, with no children, or married, with no children.
The activities that this segment of the population enjoys are art and cultural events, home furnishing and decoration, physical fitness, camping, avid reading, shopping by catalog, computers, and VCR viewing and recording.
Ms. Farmington will reach this segment of the population in various ways. Her work will be placed in gift shops and galleries and upscale boutiques frequented by this segment of the population. She will be contacting buyers and designers at furniture showrooms that feature unusual hard-to-find decorative ware. Recently, she has contacted the buyers from a local store who have expressed an interest in her work. This store specializes in unique decorative ware, and sells to an upper income clientele. Upscale clothing stores are also very suitable for Ms. Farmington's jewelry. Recently she has met with the manager and buyer of such a boutique in Cincinnati. Ms. Farmington will be designing a line of jewelry for this shop as well as a select line of giftware in her more expensive price range. This store is very active in the summer season, selling to tourists who purchase designer clothes as well as decor for their summer cottages. The owner has also spoken to the buyer of a glass shop in Cincinnati. She was told that this shop purchases giftware in April to sell during the summer season. This shop also has an upscale clientele.
Catalog sales are another area that the owner will be working in. In the near future, she will be sending letters and photographs to potential buyers. She will offer to work with these buyers in the same manner that has been previously mentioned, designing gift items to appeal to the catalog's customers.
The owner's pricing policy is based upon her operating expenses and what she feels the market will bear. She has priced all of her products in the following manner. First, the owner needs to know what the bottom line production cost is on each item. She takes into account the cost of her materials, other variables, her fixed operating expenses, the time involved, and the hourly wage that she needs to receive to meet her personal expenses.
She then sets a suggested retail price, which is what she feels the item would sell for in a retail outlet. This is also the price the artist would sell the item for in her shop. If the item is sold on a consignment basis, the store's commission is subtracted from this retail price. If she sells the item on a wholesale basis, the price for which the item is sold to the store would be determined by that store's markup policy.
In doing her pricing research, the frequent complaint was heard from buyers that artists often undercut the retail outlets where their works are being sold. This creates a conflict of interest, and may result in the store's refusal to accept further work from that artist. For example, an artist may sell a piece for $100.00 to a store which then marks it up to $250.00. If the artist sells the piece for $100.00, eventually people will buy directly from the artist to get a discount. As soon as the retail outlet sees what is happening, they feels as if the artist is in competition with them. The owner does not want this situation to happen, as she will be very dependent on her retail outlets to help her to reach her target market. By selling the item out of her studio for the same price as the retail outlet, this problem will be avoided.
The owner has prepared a price list for all of the products that she offers. On the list she has included the production cost of each item and the suggested retail price. By being aware of what her production costs are on each item, she will be able to price her products with confidence, knowing that she will be able to meet her expenses and make a reasonable profit.
She will be able to determine how many units of a given item need to be sold on a monthly and yearly basis to meet her expenses. She will use this tool when planning her marketing strategy and to help her meet sales goals.
The terms of sale for the first year will be cash or check only. If a client commissions a piece of custom work, she will require a 50% deposit to start the work, with the remainder to be paid upon completion.
The owner has several sources of competition in the area: The Glass Palace, artists and hobbyists who do art and craft shows, and Gemstone Studio.
The Glass Palace: This competitor is a large, well-stocked store that sells supplies to art glass hobbyists as well as gift items. They are also the main source of Ms. Farmington's retail supplies. They are located close to Westerland Mall. This competitor's staff is very knowledgeable and helpful, and they are located in an accessible high traffic area. Ms. Farmington will compete with this business on the quality and uniqueness of her giftware. The items that the Glass Palace sells are well made, but mostly made from patterns and kits. These items are pretty and attractive, but usually not very artistic. Ms. Farmington will only market and sell her original designs. Although her location is out of the way, she will work hard to promote her business and make her target market aware of where they can find her. If a client shows an interest in stained glass, the owner will turn the customer over to her husband, and he can answer questions and design and create leaded glasswork to their specifications. Also, Mr. Farmington specializes in repair work of antique glass which the Glass Palace does not do.
Hobbyists Who Do Art Fairs: Art fairs are very popular in Ohio, and many glass artists participate in these events. Ms. Farmington has seen much stained glass, and some fused glass jewelry at these shows. The prices are usually low, and the quality of these products range from mediocre to high. Some of the participants are artists, while others are hobbyists who do this work as a sideline. Ms. Farmington gets the impression that these exhibitors carefully keep an eye on one another so that they can produce similar work in the same price range. At a recent show the owner attended, she visited 5 art glass displays. The work of each booth was almost identical, right down to the types of glass and the colors that were used. Also, fused glass is seldom found at these shows. Ms. Farmington does not want to appeal to a person who wants the best price on a piece of work, but the discriminating person who will pay a little more for a conversation piece. She carefully watches her competitors so that she can do work that is deliberately different than theirs.
Gemstone Studio: This competitor is located in Springfield, Ohio. It is a small studio that sells supplies to the glass trade, as well as fused glass jewelry. Their staff is knowledgeable and helpful, and the quality of their work is high. They also sell jewelry out of retail stores in the area. Most of these pieces are very heavy in weight and tend to be rendered in dark colors. The edges of the glass are covered with metal solder, which contributes to the weight, and adds a very heavy look to the pieces. Ms. Farmington's pieces are lighter in weight and more wearable. She offers a wide variety of colors and styles. Her earrings are light in weight and comfortable to wear, and there is no solder used in these designs.
SHARE OF MARKET
Ms. Farmington's strong points are her unique sense of style, her attention to quality, her high degree of professionalism, and her natural born sales ability. She will capture a relatively small share of the market, but it will be those persons who are very discriminating and will appreciate her work. Her enthusiasm and dedication, as well as her excellent customer servicing, will help her to hold those clients once she has them. Nowhere else will they be able to find what she has to offer, because her unique personality and personal vision is such an integral part of her work.
PROMOTION AND ADVERTISING
The owner will promote and advertise her business utilizing the following methods:
- Gallery presentations and sales.
- Specially designed promotional materials.
- Customer mailing list.
- Art show participation.
- Articles and photos submitted to trade publications.
The owner will use a combination of these techniques to promote her business and increase sales. There will be a series of seasonal shows and sales throughout the year on location. A Christmas Open House will be held at the beginning of December. This will be a festive event with live music and refreshments. A sale will go into effect at that time and continue through December 25. Similar sales will be held Valentine's Day and Easter. These sales will feature items with seasonal themes.
In this manner, customers will be able to shop in a festive atmosphere, avoid crowded shopping malls, and meet and chat with the artist. Gift certificates will also be offered for sale.
In the summer, two weeks before the Fourth of July holiday, Ms. Farmington will hold a mini art fair onsite. She will feature her work as well as the work of other local artists. This fair will be held inside as well as outside. This event will also be promoted by way of the mailing list.
The owner will promote these events with the use of flyers, ads, word of mouth, signs at the studio, and by direct mail. Promotional materials will be sent to all persons she is beginning to sell work to. She will continue to compile this list with information taken from company sales receipts. Ms. Farmington will be able to utilize her husband's computer for these promotional activities. The mailing list will be kept on the computer and it also will be used to print labels. A local community magazine will be utilized for advertising. This publication lists all cultural events in the Dayton area. Ms. Farmington feels this is an excellent way to reach her target market.
Ms. Farmington is using the services of a professional photographer to take photos of her work. These will be used in her promotional materials. She has designed a folder that will have photos of her work as well as a brief biography. This folder will be given to buyers when Ms. Farmington does presentations. On the folder is a space where she can attach her business card. This folder can also be given to persons who have purchased a piece of work from a gallery, in which case the gallery can attach their business card. This will promote the gallery and artist at the same time. This piece of literature is designed to create an image of quality and elegance. When the owner does a presentation at a gallery she will also utilize photographs and slides to show samples of her work.
Ms. Farmington will have business cards and stationery printed using her distinctive signature as her logo. These will be color coordinated and will match her promotional folder. In speaking with buyers and gallery owners, Ms. Farmington has heard the frequent complaint that artists are often poor business persons and present themselves in an unprofessional manner. By being prepared with promotional materials and carefully cultivating a dynamic and professional demeanor, she will create a positive image with the people who are in a position to promote her business.
The owner will be participating in art shows that have high standards of quality and that attract the target market that she wishes to sell to. In speaking with other artists who participate in the events she has learned important information. There is no guarantee that you will make a profit.
Some of these events are not appropriate for the type of product that the owner is selling. She has decided to be very selective in this area, and to see shows as a promotional opportunity rather than a direct sales opportunity. She will enter events where she has to chance to compete for awards. Any prizes or awards will be excellent publicity for her business. She also will use this as an opportunity to directly meet and talk with her target market. Promotional materials can be distributed, and if a person purchases a piece from her or shows a strong interest, they will be added to her mailing list.
Recently, the owner submitted slides and an application for a national art glass competition. Those artists selected to be semi-finalists are to be notified in early spring. Ms. Farmington is awaiting news on this competition. Also, she has recently sent a photo and letter to the Dayton Observer, suggesting that she be featured. There is a feature in the paper every Sunday in the Home section which highlights unusual home furnishings and gift items available locally. Publicity received from these events will be used to promote her business. Even if she is not immediately successful in these ventures, she will remain persistent in her efforts to increase her visibility.
The owner will be sending photos, slides, and articles to trade publications in order to promote her work. These publications welcome submissions of this sort and frequently feature work of emerging artists. Her photographs and slides are of very high quality and designed for publication. Ms. Farmington has good writing ability and is confident that this will be a successful method of promotion. This will increase her visibility to her target market and will be a good tool to use when designing future promotional materials.
EVALUATING RESULTS OF ADVERTISING
Computer files will record labor, materials, expenses for each advertising method, as well as the amount of sales generated. This information will be analyzed to measure the effectiveness of each advertising strategy.
|1 case Bullseye Glass\Shipping||$800.00|
|(approximately 20 sheets of glass in assorted colors. Includes $80.00 shipping)|
|Jewelry parts from Rings 'n' Things||125.00|
|500 business cards speckled grey fiber paper with gold thermographic lettering. Print Masters-Wasau Grey fiber paper||34.00|
|500 sheets and 500 envelopes of matching stationery-black logo||100.00|
|100 promotional folders grey 80 1b. paper with typeset||50.00|
|CASH IN BANK||0.0||ACCOUNTS PAYABLE||0.0|
|ACCOUNTS RECEIVABLE||40.00||OWNERS NET WORTH||1,365.00|
|INVENTORY||(Assets minus liabilities)||1,365.00|
|E.M. Art Glass||500.00|
|Raw materials on hand||300.00|
SALES FORECAST FOR FIRST YEAR
This section shows projected sales goals for the coming year, how many units the owner sells to pay her operating expenses, loan principal and interest, and income taxes.
The owner has selected four products that show a wide price range in order to give a realistic projection. She has also estimated how many would be sold retail, wholesale, and on a consignment basis. Also included are services rendered, which represents income from a seasonal part-time job for the Photography House in Dayton. The owner provides art services for this studio on a subcontract basis over the holiday season.
There are periods of highs and lows in this business. As the owner is selling mainly to a giftware market, sales revolve around periods when her target market purchases these items. Highs also are caused by the sales that the owner will be having at her location.
U.C. stands for unit contribution and represents the net profit of each item after the production costs have been subtracted from the selling price.
The owner has based these figures upon what she feels she can realistically sell in one year, and also by what she needs to make to meet her minimum operating and personal expenses. She then used the sales projection as a basis for her estimated cash flow, which follows.
(How many to sell to break even on fixed expenses.)
C=Consignment R=Retail W=Wholesale
March 1991 to present, Dayton Art Glass, Dayton, Ohio
Working as an assistant to my husband while developing my own business. Duties include sales, client contact work, and assisting in the design of stained glass windows.
Sept. 1988 to March 1991, Photography House, Dayton, Ohio
Photo retouch artist and manager of in-house Art Department. In control of supplies and inventory, final inspection of all outgoing work, quality control, and training of new Art Department personnel. Retained by Photography House on a freelance, subcontract basis as an artist and trainer.
Sept. 1987 to Sept. 1988, CBI Photo Lab, Dayton, Ohio
Photo retouch artist and manager of in-house Art Department. Control of supplies and inventory, inspection, and quality control.
June 1985 to Sept. 1987, Wellington Studio, Chicago, Illinois
Assisted my mother in a family owned and operated photography studio. Duties included sales, public relations, pricing of goods and services, photography, and general office work. Also, hired and trained new photographers and scheduled photography sessions.