# How much would it cost...



## DurocShark (Jun 2, 2010)

To open a Rockler or Woodcraft? I'm curious because I'm absolutely NOT impressed with either of the ones here in Denver. I may take the drive down to Colorado Springs to see if that Woodcraft is any better.

It's just insane how poorly stocked either are. Particularly for pen stuff. I went to Rockler yesterday to buy cigar stuff. They had kits, but no bushings or spare tubes. In fact, they only carry tubes for a few kits. Apparently cigars are not one of those few.

The bushings bins were empty. The clerk, "Well the computer says we have 2 sets. So we can't order them until the computer says zero." WTF? You looked in the bins just like I did. You can't see there's zero and either they were stolen or mis-sold? 

Half the bins were empty. Seriously? If you wait until they're all gone before placing an order, you're gonna have pissed off customers.

I would chalk it up to being after a 3 day weekend, but it's ALWAYS like that there, regardless of when I go. They're well stocked on those puck things though!



Woodcraft is better in that they try to stock more pen stuff, but they're almost as bad about keeping inventory. 

/rant off


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## DennisM (Jun 2, 2010)

*[FONT=Arial, Helvetica, sans-serif]Franchising                 Since:[/FONT]* *[FONT=Arial, Helvetica,  sans-serif]1997[/FONT]*
*[FONT=Arial, Helvetica, sans-serif]Franchised                  Units:[/FONT]* *[FONT=Arial, Helvetica, sans-serif]82
[/FONT]* *[FONT=Arial, Helvetica, sans-serif]Company                  Owned Units: [/FONT]* *[FONT=Arial, Helvetica, sans-serif]4[/FONT]* 
*[FONT=Arial, Helvetica, sans-serif]Initial                  Franchise Fee:[/FONT]* *[FONT=Arial, Helvetica, sans-serif]$50,000[/FONT]* *[FONT=Arial, Helvetica, sans-serif]
 Royalty/Service  Fee:[/FONT]* *[FONT=Arial, Helvetica, sans-serif]  5% of gross revenues[/FONT]* *[FONT=Arial, Helvetica, sans-serif]
Est.                  Total Initial Investment:[/FONT]* *[FONT=Arial, Helvetica, sans-serif]$525,000                  to $675,000 which includes the franchisee fee
[/FONT]* *[FONT=Arial, Helvetica, sans-serif]Minimum                  Market Population Required:[/FONT]* *[FONT=Arial, Helvetica, sans-serif]350,000  (20 mile radius)

http://www.woodcraftfranchise.com/program.aspx
[/FONT]*


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## DurocShark (Jun 2, 2010)

Yikes!


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## skiprat (Jun 2, 2010)

Is that all????:biggrin:

Heck, I'm gonna open one in Wales!!!  We could use the competition around here to wake our vendors up a bit and we've only got about 3 vendors in the whole of the UK!!!


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## DurocShark (Jun 2, 2010)

Be cheaper to start from scratch without a franchise name. 

Hmmm.... 

Now to find a couple hundred grand for inventory. heh


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## DennisM (Jun 2, 2010)

DurocShark said:


> Be cheaper to start from scratch without a franchise name.
> 
> Hmmm....
> 
> Now to find a couple hundred grand for inventory. heh



ya thats the kicker part. 

i wonder though how much of that is also the larger machine inventory? Wonder what it would cost to do it on a independent level with just pens, bowls, etc.. tools for them and a couple special order machines..


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## DurocShark (Jun 2, 2010)

I think you'd have to support all woodworking to stay afloat. Exotic woods, specialty tools, hand tools, accessories for power tools at a minimum. Finishes (limited shelf life), supplies, etc. 

I think power tools themselves could be optional.


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## DurocShark (Jun 2, 2010)

OOOHHH!!!

What about used power tools? Hmmm...


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## CaptG (Jun 2, 2010)

Don, there is a Woodcraft in Loveland just off I25 on the East.  I get there about once a year when I visit family in Longmont.  They have always been helpfull when I was there and it is a nice store.  They even have a couple of my pens on display at the front desk, a one piece rope twist acrylic cigar and a rattle snake skin bullet pen.  It might be closer than the Springs.  Just a thought.
OOPS, just saw you are in Castle Rock, not really Denver,  still...


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## DurocShark (Jun 2, 2010)

Yeah, the Springs would be a bit closer. The one there is on the way to Garden of the Gods, which is one of my favorite places in Colorado. 

It's honestly not worth the effort to me. I can order online. It would just be nice for once one of those stores had what I needed in stock. Or would be more helpful about special ordering it for me. Or something. Sigh.


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## DennisM (Jun 2, 2010)

DurocShark said:


> OOOHHH!!!
> 
> What about used power tools? Hmmm...



That is what I was thinking as well. forgo the large new tools, special order only, limited inventory.

Used tools would be a nice option I would think. But then would have to look at the liability issue, even though pawnshops have no  problems..

I would also add a small gallery section to feature local artists work for sale.


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## ed4copies (Jun 2, 2010)

*Piece of cake!!!*



DennisM said:


> ya thats the kicker part.
> 
> i wonder though how much of that is also the larger machine inventory? Wonder what it would cost to do it on a independent level with just pens, bowls, etc.. tools for them and a couple special order machines..




Really it's VERY simple.  You create a business plan, figuring how many of each of these items you can sell in a year, what each one will cost in the wholesale market and how many you will sell in three to six months.  (Remember, you have to purchase in "economical order quantities"--which are established by your sources, so their minimum may be a three year supply--that's what you need to buy then).

When that's all done, simply go to the bank and present it for a loan (say $75,000).  Rates are low right now, so monthly interest may be as little as $500.  Of course they will take a lien on your house, and all your other assets so if you FAIL, you will also be either bankrupt or homeless, probably not both.

The bank will shoot holes in your business plan and their board will determine how likely you are to succeed (knowing that 80% will FAIL in the first two years).  

That's the process, good luck with that!!!!!

Oh, if you succeed, you don't have to pay 5% to the franchiser---but you don't have his expertise backing your numbers when you see the bank.  With a franchise, the bank feels better about your business plan--it's been executed successfully by a few hundred other locations.


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## DurocShark (Jun 2, 2010)

Yeah. 

And the power tools could be sold on consignment from local pawn shops too! 

I'm liking this more and more!


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## DurocShark (Jun 2, 2010)

Hey, Ed, my credit sucks so bad due to getting laid off a couple years ago I couldn't get a credit card right now. So I don't have to worry about what the bank thinks! 

Of course, that makes coming up with the dosh a smidge harder.


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## workinforwood (Jun 2, 2010)

yes, the minimum investment in a Woodcraft store is $500,000.  You can't open a store with less money than that, and it's going to be a small store with limited inventory.  Just think about it...forget even about the 50,000 of it that gives you the franchise part...just think about opening a store called Don's woodworking supply. First thing you need is a building.  You'll likely have to rent it, so lets just throw out a number of 2 grand a month..that is likely a slum, but whatever.  It is going to take a few months at least to fix up and shelve your store.  You need electricians at $100 an hour.  You need paint..well you can paint it yourself but you probably can spend 500 on paint for a store.  To buy a real nice kitchen in a house can cost 10,000.  You can downscale that and cut the cost in half, but what is a kitchen compared to a store? You need lots of displays and hooks..wouldn't surprise me if a 1500 sq foot store might cost 50,000 just to get some displays in there.  You need a counter and a computer or cash register...better just get a computer because it will be cheaper over the long run with book keeping and inventory, so there's another $5000 investment.  If you buy a woodcraft store, they give you their software and train you to use it, but for Don's store you have to figure all that out on your own and you must buy the software or get a huge fine when some employee turns you in...oh yea..you will need some of those employees.  Can't do it all just Don and the wife, you have to sleep.  So maybe Don's 2000 slum lord rental has 100,000 invested now just in layout, rent, fixtures and what not, everything it takes prior to bringing in the inventory.  Oh..you got a forklift to unload the truck, or do you unload 45,000 lbs of supplies with spinach?:biggrin:
You need to get some inventory.  You are not going to have the Woodcraft super deals straight from them..they have a whole warehouse one stop shop set up just for you with wholesale pricing, but Don doesn't get that, so you have to buy individual from each vendor..this is going to take awhile..more lost time and rent, and higher inventory costs.  There is a ton of inventory needed and if 500,000 is your limit and you already spent over a fifth of that before you buy inventory...yikes!  Go look at all the drill bits in your drawers in the shop.  I have tons of drill bits for an average guy, but I have nothing compared to a store.  You have bits from 50 cents to $50 for one darn bit!  We all know that the tiny little do dad tools actually cost the most.  In a store, that stuff doesn't require so much space, so you have a ton of cash in a small spot and when people walk in it looks like you have nothing.  In your pen kit department...how much profit on a pen kit is there really..I doubt that much.  How many pens do you buy for a grand...not that many unless they are just slims.  At the woodcraft I go to they have about 20 foot by 4 foot all pen kits.  I can't even imagine how much inventory cost is just right there.  They probably have 10,000 in pen kits without including all the accessory items and blanks they have.  All the hardware items in the store go on for isles and isles..and eventually you end up in a wood section which although it looks small, it is expensive wood which might have cost the store 20,000. And the big machinery...some tools cost $5,000 just for one.  You won't have much inventory on 400,000 budget, so you will have to really stretch it out and limit the quantities of each item to try and give the illusion of having more than you do.  Bottom line is that starting a business is serious business.  I don't work for woodcraft, but I would bet that the $50,000 franchise fee pays itself back several times over during the life of the store..that is only a one time fee, and the benefits that come with it are huge.  I think their franchise fee is one of the better franchise fee's in the country, when you consider the dollar amount and what they give you for benefits.  

Yes...I have researched the Woodcraft thing for quite a while.  I had thought about opening a store.  It's a heck of a good deal what they give you.  The negatives are the amount of cash flow you need to have and the amount of personal time you have to invest in the store, because the store will become your life, if it fails you fail. You can't slack off a minute when you own a business or you suffer big time for it.  Opening a business is very risky and scary...too scary for me to do.


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## DennisM (Jun 2, 2010)

ed4copies said:


> Really it's VERY simple.  You create a business plan, figuring how many of each of these items you can sell in a year, what each one will cost in the wholesale market and how many you will sell in three to six months.  (Remember, you have to purchase in "economical order quantities"--which are established by your sources, so their minimum may be a three year supply--that's what you need to buy then).
> 
> When that's all done, simply go to the bank and present it for a loan (say $75,000).  Rates are low right now, so monthly interest may be as little as $500.  Of course they will take a lien on your house, and all your other assets so if you FAIL, you will also be either bankrupt or homeless, probably not both.
> 
> ...



There you go Ed, taking a nice lazy morning dream and bringing realty into it to ruin it!

To much work while procrastinating on the days real chores.......


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## DennisM (Jun 2, 2010)

workinforwood said:


> Yes...I have researched the Woodcraft thing for quite a while.  I had thought about opening a store.  It's a heck of a good deal what they give you.  The negatives are the amount of cash flow you need to have and the amount of personal time you have to invest in the store, because the store will become your life, if it fails you fail. You can't slack off a minute when you own a business or you suffer big time for it.  Opening a business is very risky and scary...too scary for me to do.



Aint that the truth, 5 years ago, lost 85k total in my retail computer shop. after 3 years in the location. 

BUT if i run across the right plan again, I wouldnt hesitate to do it all over again!

I am at the moment looking at a couple small shops that are available here in town, rent is around 1k a month on one, thinking of moving my workshop in the back, then having a gallery in the front, feature my own work and other artists wood projects on consignment as well. 

Figure I could supplement the income with a small inventory of pen and bowl blanks etc. Wouldnt be as good as before WC moved into libertyville around here, as before that it was a 40 min drive to them from here, now its maybe 15 so market has shrunk. But who knows....


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## DurocShark (Jun 2, 2010)

I've owned 2 business in my life. A computer store for all of a week (lol! Long painful story...) and an aquarium maintenance biz for 2 years. I'd still be doing the aquarium thing if my wife hadn't decided we needed to move out of Orange County. 

I'm familiar with what's involved from a personal level and somewhat with the financial side. Inventory is the trick. 

I'm liking the idea of starting with used tools and slowly expanding into supplies. Especially if I could storefront stuff for some of our great online-only vendors here. 

Hmm...


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## witz1976 (Jun 2, 2010)

I am not sure what is around your area for small business assistance, but a good resource is the Small Business Association www.sba.gov  Even with potentially poor credit there may be a way to obtain a business loan.  I think the biggest part is you would need to have one hell of a business plan.  

-Dan



DurocShark said:


> Hey, Ed, my credit sucks so bad due to getting laid off a couple years ago I couldn't get a credit card right now. So I don't have to worry about what the bank thinks!
> 
> Of course, that makes coming up with the dosh a smidge harder.


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## OldGrumpy (Jun 2, 2010)

*Former Retailer*

I am sure Rocker and Woodcraft are like everyone else in the retail business.  They will stock what sells.  I can't tell you of the times when i was in  business that someone would say "You should be selling XXXX".  So I ordered a supply of xxxxx and watched them sit on the shelves.  In the pen making industry it appears to me that most of the people on this forum are buying online.  Online purchasing ability is a great blessing in many respects but it has killed the small retail store where you could go and feel the product before purchaing.


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## workinforwood (Jun 2, 2010)

That is not a bad idea Don. If you are good at fixing tools, then that would be a major bonus, or if you could hire a repair technician.  Then you can fix all the peoples regular drills and you can buy tools at auctions and fix those up for your store too.  That would be a great business, especially when the economy is down a bit because people will want your alternative to new!


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## ed4copies (Jun 2, 2010)

witz1976 said:


> I am not sure what is around your area for small business assistance, but a good resource is the Small Business Association www.sba.gov  Even with potentially poor credit there may be a way to obtain a business loan.  I think the biggest part is you would need to have one hell of a business plan.
> 
> -Dan




Personal experience:

A bank VP once told me I was approved for an SBA loan, so I purchased some inventory ($10K), anticipating the loan would cover the check in a couple days (when checks were mailed and cleared a few days later).

I was informed that I had not gotten a LETTER of approval and the loan was NOT going to go through, two days later.  The check would have to be covered in less than 24 hours.

MAKE SURE you have a LETTER, before you listen to a bank VP!!!


(Yes, I did cover the check)

NEVER went back to that BANK!!!
BTW,  the bank is part of one of the banks that was "rescued" by our TARP---you have no idea how MUCH I wanted to see THEM go out of business, like they tried to do to me!


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## witz1976 (Jun 2, 2010)

Ouch!


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## moke (Jun 2, 2010)

Don--
What Old Grumpy/Jimmy said is EXACTLY right.  As a current owner of a business, business is brutal right now.  I would anticipate the reason the Rockler has some half stocked shelves is cash flow.  No merchant wants less than filled shelves.  Being able to pay the bill and the overhead is the paramount reason for shelves that are poorly stocked.  Anyway you could eliminate some of that overhead is the best idea.  

Of all the items mentioned here, consignment could be your best idea.  You take a cut at the sale.  The going rate is 15 to 25%.  You need to look the equipment over, test it a little, document that test in a check list presented to the consumer then try and relieve yourself of any liability to it's working ability beyond that.  Having said that you will get stuck occasionally.  I usually hold off a week to pay the consignee, while I wait to see if the unit gets returned.

I have no idea of what the margin is on equipment, but on most thing s today it is pathetic.  I ordered a new model of Canon point and shoot camera yesterday and cost was 119.00 and MSRP (selling) price was 129.00.  Gee Canon, thanks for that!  This is becoming more and more common in most industries.  The smaller items like smaller tools are probably keystoned or cost is doubled for sell through, so the accessories are the best items to sell.  But you must have a lot of foot traffic to have sales that small items can carry you.
Good Luck.....
Mike  aka: Moke


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