How To Plan Antiques Business

Most of the persons desiring an antiques dealership business have the notion that it is the easiest way to make money. All they need to do is to buy and sell antiques. However, like in any other business, in the business of antiques too, everything depends upon how you plan your business? Most of the antiques business fail as they lack a sound business plan.

So, how one should plan to be a successful antiques dealer? There are certain basic requirements, let's see what they are?

• Knowledge is the key to a successful antiques business. Gather knowledge from anywhere you can. Buy a book on business plans, go to libraries, or download sample business plans on the Internet.
• Consider certain basic things such as, start up cash; start up time schedule; type of product you'll be dealing in; analysis of competitors dealing in same products; high end and low end price; availability of the product; a second and third line of products; market analysis; market segmentation; availability of research material; marketing, purchasing, promotion, and selling strategy; selling locations; cost of buying and the cost of selling; break-even analysis; projected profit; and projected cash flow; etc.
• While deciding on the product, keep your start up cash in mind. If it's not a huge amount but only a few thousand dollars then it'll be wise to start a business of buying and selling porcelain, decorated stoneware or stone sculptures, early glassware, country furniture, painted country accessories, or some popular collectibles. The high end items like Period American furniture, signed or decorative art, rare art pottery, designer furniture, American Folk Art etc. need a lot of money to start up with. So, decide carefully.
• Collect first hand knowledge on product availability- attend auctions, shows, go to antiques shops. Keep an account of the number of items found, price, condition, and estimated profit. Enough products must be there in market so that you may replace sold items. Additionally, the average cost of the product should be low enough to allow a profit after all your expenses.
  
• Don't be disheartened if you don't make money on your start up stock- most dealers don't. At least you gain experience and have first hand information about what sells and what not to buy again.
• A professional dealer making a living out of antiques business, requires a cash flow ratio between four and six to one. Simply said, every dollar spent on antiques must return between $4 and $6. Hobbyist dealers, social dealers, and collector dealers can manage with a cash flow ratio of two to one. They can pay more for an item and can sell for lesser profit. You must decide, which type of dealer you are? Consider cash flow ratio in business plans accordingly.
  
• Decide on your buying strategy. From where will you buy- auction, shows, or shops? How many hours each week will you spend buying? How far a location are you willing to go to attend an auction or show? Will you place ads in local papers/ trade papers to buy larger items or collections from other dealers? How much cash will you set aside to buy your start-up stock? Whether your buying budget allows to attend longer events like a three-day auction or large show?
• Decide on your selling strategy. If planning to sell at shows, speak with as many show dealers as possible and get their opinions and recommendations for certain shows. Keep a record of everything that happens at a certain show- weather, time of the show, dress, and manor of those attending the show; show advertising, attendance by time of day, attendance on the second and third day. Generally, dealers come to the show on the first day, collectors and homeowners on second or third day. Follow sales by hour, day, and type of buyer. Differentiate between dealer shows and retail shows and bring merchandise for the type of buyers who normally attend.
• Selling at auction may cost between 5% and 25% of the hammer price. The more you sell at a given auction service, and the higher the selling price of each item, the lower your sales commissions will be. If you sell only a few things at auction, expect to pay a higher commission. Plan accordingly.