|
Your drapery workroom is a legitimate business. Or is it? You may say "Of course it is! I have a sewing machine, tools, business cards and letterhead stationery!" That may be, but are you legal? Are you stable and secure? Can your customers be sure you will be there next month or in three months if they have problems?
Are you focused? What are you really offering your customers? Have you consulted with the right professionals to ensure your business security?
Any CEO considering investing
in a new company will ask these questions.
Here are some very necessary questions that new drapery workrooms and some seasoned ones often overlook or ignore. These questions and their answers are about determining the direction and security of your business. They're about peace of mind.
1. Do you want to be a wholesale or retail workroom?
A wholesale workroom fabricates for other businesses-for example, decorators, designers and stores. A retail business fabricates for the home owner, usually selling the window treatment design, the fabric, hardware, etc. A company can be both, but it is important to determine your direction, that is your focus, before pursuing your search for resources and before developing any advertising or marketing plans.
The answer to this question and what you do with it has a direct effect on the rate and degree of success you can achieve in your business. All the rest of the questions depend on the answer to this first question.
2. What do you want to offer to your customer?
Measuring? In-home consultation? Installation? What products will you fabricate? Certain products such as pinch pleats usually are not very profitable without proper equipment and perhaps additional manpower. You need to know what you are offering so you will know how to prepare to fabricate the products and how to market them.
3. Where will you be located?
While a home-based business is commonly chosen by the beginning workroom entrepreneur, a storefront might be more desirable to you. It's very important for you to know which way you want to go before moving any further on.
It's always a good idea to talk with other business owners in both categories to get some real-life experiences. There might be advantages and disadvantages that you have overlooked. For example, if you have a tendency to get over-absorbed and continue working long after you should have stopped, then a storefront might be more advantageous. It might be easier for you to discipline yourself to keep regular business hours. Otherwise, you might never see your family!
4. What legal requirements must you fulfill to call yourself a business?
There are local, state and federal requirements. Go to your local city hall to get the information or additional resources you might need. You will need to know and understand sales tax laws, which vary from state to state. Besides a license, you might need to file a property tax on your business equipment. If you want to work out of your home, there might be restrictions limiting the type of business you can operate and whether or not you can hire employees. Operating a storefront business might incur additional taxes or fees.
In order to get the correct information, you must know exactly what kind of business you will be running and the services and products you will offer.
5. Will your company be a sole proprietorship, partnership or corporation?
To decide this you can read business books or talk to other business owners. However, the best sources of information are a lawyer and an accountant. The attorney can expound on the legal ramifications of each and the accountant can reveal the effect each will have on your profitability.
6. Who will be your accountant?
You do need one. It is important to find a good accountant who has had experience with clients in situations similar to yours. Be sure this person is interested in helping you become profitable. He or she can teach you how to read your numbers. From there you will have a better idea of what to consider for pricing as well as the effect any changes in business might have on the bottom line-the money you can keep.
7. How will you keep your accounting books?
If you don't know how to keep books, you have some options. Your accountant can teach you or she may offer a bookkeeping service.
There also are wonderful accounting software programs available, but be aware that initially they can be a challenge to learn if you don't have any background in accounting. However, the payoff is dramatic. With just a few clicks of the mouse button, you can get an assortment of reports to let you know how your business is doing. At tax time, the reports your accountant needs are printed in an instant. QuickBooks and QuickBooks Pro (from Intuit) are the more popular ones of which I've heard. However, ask your accountant for a recommendation.
8. What kind of insurance do you need?
You really must talk to an insurance company that understands small businesses, and particularly your type of business. There are many kinds of insurance coverages out there. Most companies now can offer a rider on your home owner's policy to cover loss of property. If you need liability coverage or perhaps loss of income coverage and other things, you might need a separate policy.
Here again, you need to know what your business is offering. Will you go into your customer's home? Will they come into your business? Exactly how much equipment and what type do you have? There are even special policies for computers now. It's important to get an agent who will take the time to understand what you are doing so you will get the correct policy.
9. Who will be your lawyer?
Again, you need someone who understands the type of business you are doing. The main reason you need a lawyer in the beginning is to approve or provide you with a legal contract for you to use with your clients, whether retail or wholesale. (Wholesale Contract Terms & Conditions is available from Workroom Concepts, and retail contracts are available from Sew Storm Publishing and Business Systems.)
The whole point of having a contract is to ensure that it will hold up in court should the need arise. Only a qualified attorney in your state can ensure that it is written so a judge will accept it in a court of law.
Another reason you may need a lawyer is for bill collections. Actually, all your work should be strictly cash on delivery (C.O.D.), but if you ever do need collection services, notices coming from an attorney make a big impression!
10. What paperwork and forms must you use in your day-to-day business?
For forms to help organize the daily activities of a workroom or decorator, "Order In the Workroom" (available from D&WC's Interior Fashions University Bookstore) can provide work orders, ordering forms, estimating forms, measuring sheets and more. Minutes Matter offers quite an extensive collection of measuring sheets and work orders. Business Systems offers a variety of contracts and a wonderful pre-appointment form to ensure you ask all the right questions to prepare for the appointment.
Accounting software programs such as QuickBooks Pro can provide you with invoicing and payroll, as well as all kinds of reports. There are several popular estimating software packages available for creating work orders, estimates and invoices for soft window treatments. (See D&WC, April 1998)
These certainly are not all the questions a new workroom business needs to ask, but they are some of the most important. Any CEO considering investing in a new company will ask these questions. Preplanning by answering these questions and securing the proper professional advice will go a long way in keeping you on the right path to success.
If you have any questions or comments about this article, previous articles or any topic of interest to workrooms, please contact me at:
Workroom Operations
Draperies & Window Coverings
666 Dundee Rd., Ste. 807
Northbrook, IL 60062-2769
Fax: (847) 498-0231
E-mail: kstein@workroomconcepts.com
Web site: www.workroomconcepts.com
Kitty Stein, WCAA, is a 20-year veteran of the drapery workroom field, having owned and operated her own business for 18 years and having taught classes on window treatment construction. Until 1990, Stein and a partner owned a workroom with nine employees. She since has opened her own smaller workroom, Workroom Concepts, that has just one employee. She also does workroom consulting, seminar speaking and is the author of Order in the Workroom available through Draperies & Window Coverings.
|
| DWC Magazine | Index to Articles | Back Issues
| August '99