Inspiring Entrepreneurs

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Art and Artisan, Ellicott City, Maryland

Karen Besson has almost seven years’ experience operating an art gallery in downtown Ellicott City. Her store is small—only 300 square feet—but it is a jewel box featuring work from artists and artisans. About 75 percent of the work she shows was produced regionally, and 25 percent is produced in the United States or through fair-trade networks. Most of the fine art is consigned. Jewelry makes up a substantial part of the store’s business mix, and Karen purchases it directly.

Karen opened her store in May 2005. She was intrigued by downtown’s untapped potential. “On a scale of 1 to 10, we are hitting a 6 right now,” she says and notes that downtown is interesting because the economy has had its ups and downs over the decades.

Ellicott City’s historic and funky architecture attracted Karen’s eye long before she opened her store. She felt that a store in a commercial strip center would be soulless and she didn’t think the traffic would be as strong. As an art collector for over 25 years herself, opening an art gallery was always in the back of Karen’s mind as she worked as a historic site membership administrator and for various nonprofit exhibit spaces, studios, and a retail gallery.

In preparing to open her store, Karen intensively interviewed other business owners in Ellicott City. She has taken many business classes in graduate school and those lessons helped her get started. Her detective work served her well, leading her to a decision to start small and grow gradually. Other business owners were very open about their numbers—traffic, locations, and sales trends. “Real” information was more important to Karen than abstract business plan work and research. She hasn’t created a business plan (although she knows that she should).

Art and Artisan is located in the historic McGowan Hotel built in 1861 to serve customers arriving on the brand new railroad. Ellicott City was the first stop on the B&O Railroad, which arrived in town in 1830. In the 1930s, the hotel building was reconfigured to house retail spaces on the first floor and apartments above. As with most buildings in Ellicott City, it is made from local granite.

 Sources of Funds

Personal savings: $36,000
Loans from family/friends: $0
Loan from a bank: $0
Public financing: (SBA loans, etc.): $0
Loans from vendors: $0
Credit cards: $0
Other: $0
TOTAL: $36,000

Karen’s space was not in very rough shape when she leased it. About $16,000 of her start-up funds went into building rehabilitation, including electrical upgrades, new lighting, paint, and display cases. While the store wasn’t in bad condition, it wasn’t ready for her business either. The rest of her start-up money ($20,000) went into inventory. One month after Karen acquired the lease, Art and Artisans opened its doors.

Closely observing her customers and their buying patterns, Karen quickly noticed that jewelry far outsold her other merchandise so she reduced her inventory of fine art pieces to make room for more jewelry, which accounts for 80 percent of her sales. If the shop had just been an art gallery, it would not have lasted. Over the years, Karen notes, there has been a marked decline in art collecting, which has been made much worse by the current recession and an influx of factory-produced artwork. Adjusting the store’s business mix helps her survive the uneven sales from art collectors. She continues to alter her product mix and is looking to add more items for children and pets.

Karen’s advice to other would-be entrepreneurs is to find a desirable location. Karen got as close as she could afford to the bulk of the downtown stores. New owners should expect to invest approximately 30 to 40 percent more than they planned in start-up costs.