Hobby Shop Owner The Buzz


Do you have a hobby you're crazy about? Model trains? Radio-controlled vehicles? Scrapbooking? Needlecrafts? It's possible to turn that passion into a career. But hobby store owners say that while passion does help, operating a successful hobby shop also takes good business skills.

Charles Gonder is the owner of Gold Coast Hobby in Glen Head, New York. His shop carries all types of models, from wooden ships to railroads to radio-controlled vehicles. He explains how he started his shop.

"I was traveling two to three weeks a month while working in industry, and when asked to do something illegal and unethical, I quit my job," he says. "The primary objective was to do something where I could stay at home and my wife and I could work together. Since I built models all my life, we decided to open a hobby shop."

Gonder put together a business plan, started small, and now has a 1,000-square-foot shop staffed by five employees.

Penny MacDonald wasn't a scrapbooker to start with. "About six years ago, my daughter did a scrapbook on a sorority, so that sort of triggered me," she explains.

MacDonald took some space in her existing toy shop, ordered $5,000 worth of inventory, and opened Scrapbooking by Design. The store has been a success and the toy shop no longer exists. "I'm an expert scrapbooker now," she chuckles.

Don Hendrick is the president of the National Retail Hobby Stores Association (NRHSA), and a hobby shop owner himself. He emphasizes the importance of business knowledge. "Many more stores fail than make it because of a lack of knowledge," he points out.

Hendrick explains that opening a hobby shop fresh out of high school, without business experience -- not to mention a substantial amount of money -- might well be impossible."

"I would recommend gaining experience in buying, pricing, merchandising and selling with [an existing] successful operation first," he says.

Dianna Hilstad, co-owner of the store Remember Me Scrapbooking, agrees. "Work in retail, see if you like it, work your way up to management and learn how the business operates," she advises.

Why are business skills so important? Hendrick says that the biggest challenge in owning a hobby shop is "keeping up with rising overheads and shrinking profit margins."

That means you've got to know how to manage your money so that your shop's rent, utilities, telephone bills, insurance, accounting fees, employees' salaries, etc. aren't so high that you're not making a profit.

Unfortunately, in the beginning, that's almost impossible. According to the statistics on the NRHSA's website, "It takes five to seven years for the average small business to reach the break even point and start to show a steady profit."

"It takes time and money -- money being key," says Hilstad. Remember Me Scrapbooking had a head start in terms of overhead. It opened in a small room at the back of an existing business belonging to the other co-owner and her husband.

"In 1997, we were able to operate on a shoestring," says Hilstad. "Now, $200,000 is not unrealistic just for start-up."

Remember too, that business skills include product knowledge and customer relations. For most hobby shop owners, these are the things that reap the rewards, bring in the business and make the shop successful.

Speaking about herself and her business partner, Hilstad says, "Both of us were avid scrapbookers. The fact that we both love and understand the 'craft' of scrapbooking and the heart of scrapbookers is key to our success. We know scrapbooking, what the latest products are, how to use them and how to show [our customers] how to use them."

Those skills helped Hilstad and her business partner beat the odds. When it opened, the staff of Remember Me Scrapbooking consisted of the two of them plus one part-time employee. Today, they employ eight full-time staff and four individuals who rotate as teaching staff for the scrapbooking classes.

Hendrick's shop, Pat's Hobbies and Crafts in Illinois, is a "full line" hobby shop selling everything from plastic models and modeling supplies, to airbrushes, paints and crafting tools. He ranks customer service high on his list of what makes a shop successful.

"Your customer service has to stand head and shoulders above other retail stores, and you have to have the products that your customers want when they want them. You also need to be aware of the retail basics. The store needs to be clean, organized and have a pleasant atmosphere."

If you do open a hobby shop, seriously consider joining an association like the National Retail Hobby Stores Association.

"The number one benefit is the knowledge that is shared between members," says Hendrick. "You can learn more by attending one of our conventions than you can in years on your own. We also have benefits that save shop owners money."

"There's a lot of competition; don't kid yourself," says MacDonald.

So, take a bit of passion, a lot of business savvy, do a market analysis, come up with a business plan and a marketing plan, assess the time and money you have available to commit, and then you'll be able to make an informed decision about opening a hobby shop.

If this is something you really want to do, don't be afraid to take the odd risk if you can afford it. Gonder admits that opening Gold Coast Hobby was a bit of a risk.

"By all standards I know today, I violated a major rule in business," says Gonder. "That major rule was, 'location, location, location!'"

Gonder opened his shop in a very small town. Had he asked for expert advice, chances are the experts would have told him a hobby shop wouldn't survive there. Now, 20 years later, he's still doing what he loves.

Links

National Retail Hobby Stores Association
Here you'll find the invaluable 'Getting Started: The Hobby Shop Owners Guide'