How To Open a Jewelry Store in Nine Steps

A goal without a plan is just a wish. So, commit to your goals by creating a business plan. Not only does a business plan identify what you need to operate your company, but it also attracts financial investors.

A business plan covers many areas. In starting a jewelry business, you'll want to address the following:

• What will you name your business?
• Do you need a storefront?
• Are you selling jewelry online?
• What type of jewelry are you selling? Costume jewelry? Precious metal or stones?
• Do you make only one type of product, like rings? Or do you make a variety of pieces?
• Who is your target market? How will you reach potential customers?
• Are you a sole proprietor, or will you hire staff?
• Do you have a jewelry studio or buy jewelry pieces from others to resell?
• Who is your competition? What makes your jewelry different?
• What are your startup capital needs and ongoing operating costs?
• What prices will you charge?
• What profits do you project?
• How can you scale up?

Traditionally, jewelry stores calculate prices based on the cost of goods, labor, and markup. See what your competition charges for similar items.

Your business plan is flexible. So, you can update it as you face business challenges or find new opportunities.

Your jewelry brand separates you from your competition. To set your brand apart, consider a unique name, logo, slogan, and brand colors.

Your Business Name

A critical step in defining your brand is choosing a name for your business. You'll want a catchy name. Preferably, it should be a name not in use as a domain name or social media handle.

First, check with your secretary of state's records to see if the business name is available. Then, search the Trademark Electronic Search Service (TESS) database at the United States Patent and Trademark Office (USPTO) to check if the name already has a trademark.

Once you know your name is available, you can register the name with your local secretary of state's office. To do this, file a certificate of incorporation for a corporation, limited liability company (LLC), or partnership.

Alternatively, you can file a fictitious name if you operate your business as a sole proprietor. The fictitious name or "doing business as" (DBA) is filed at your state, city, or county office.

Trademark Business Name, Logo, and Slogan

After you've selected and searched your name, protect your brand with trademark registration. A registered trademark has an "®" after the name. It signals to others that they can't use this name.

Trademark law also protects a logo or slogan you create for your business, even if you're primarily an e-commerce store on Etsy. If you want exclusive rights to a name, logo, or slogan, register it.

A logo is an image that uniquely identifies your business. For example, think of the Pandora name brand with a small crown over the "O."

An advertising slogan is a memorable phrase or tagline you associate with a business. For example, Jared® Jewelry's slogan is "He went to Jared."

You apply for federal trademarks at the USPTO. An intellectual property lawyer handles trademarks, copyrights, and patents. So, it's wise to consult an attorney to safeguard your brand.

Choose a Formal Business Structure

The next step is choosing your business structure. You can operate your jewelry business as several legal entities.

• A sole proprietorship is typically not required to file with the state to form. One jeweler is running the business, usually under their own name or using a doing business as registration (DBA). Sole proprietors are personally responsible for all business debts and lawsuits against your company.

• If you have a partner in your jewelry business, you might consider a partnership. But like a sole proprietorship, you and your partner are personally liable for the business operations. So, a corporation or limited liability partnership is better for you and your partner.

• A corporation is a business entity that segregates business activities and liabilities from the business owner's personal assets. So, if someone sues your company, they can only go after the corporation's assets. But there is an issue of double taxation. As a corporation, you pay taxes on the corporation's profits. You also pay taxes on any income you receive from the corporation on your individual tax return. You can apply to the IRS for an S corporation to get a special tax status. This election allows you to pass-through your profits and losses to your personal income tax return. This way, you eliminate double taxation.

• A limited liability company (LLC) allows for pass-through taxation like a sole proprietorship. It also provides the liability protection of a corporation. For a one-person business, an LLC is a popular option.

Creating a formal business structure can insulate your finances from the company's operations. Choosing a business structure has many legal and tax implications. You may want to consult a small business attorney to select the correct entity.

Register Your Business Entity

Once you choose your business structure and are ready to sell your own jewelry, register your small business with the secretary of state. You can find the formation documents for your business entity at your secretary of state's office. Or, consider using a trusted online business formation service that will take this step — and many others — for you.

This registration protects your business name from being used by someone else. Additionally, the filing gives you corporate protection.

Apply for an Employer Identification Number (EIN)

After registering your business entity, you should apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). The IRS assigns a nine-digit number to identify your business. You use this number to file business taxes, open bank accounts, and get business licenses. You may need to include the NAICS code for the jewelry industry in your application.

Open a Business Bank Account and Get Funding

Entrepreneurs need money to launch their new business.

First, open a business bank account—even if you put $10 into it. This establishes your jewelry-making business bank account and gives investors or lenders a place to put your funding.

Know your startup costs, including marketing materials and advertising costs. Calculate your cost of materials, equipment, and supplies. If you sell high-quality handmade jewelry, your startup costs may be more than an online reseller's on Shopify. Include fees for business formation, a workshop, or retail space. Estimate the costs of hiring staff or independent contractors.

Next, look for business financing or investors. You can secure a loan from local banks or the Small Business Administration (SBA). A business credit card is another option, but it typically comes with large interest rates.

If you need expensive equipment, equipment manufacturers may offer financing options.

You need business licenses and permits to operate, whether you sell only online on an e-commerce platform or in a retail store. Check with your local municipality, county, and state for license and permit requirements.

General Business License

A general business license allows you to operate your business in your jurisdiction. This is the state where you form and operate your business.

Seller's Permit

You may also need a seller's permit to sell jewelry in some states. This includes sales that are part of dropshipping. This registration allows you to collect sales tax on customers in the state. This permit is also called a "sales and use" permit.

If you're a home-based business, check with local zoning laws and homeowners associations regarding operating a business from your home.

Storefront Licenses and Permits

When a jewelry company has a physical location or storefront, there are additional regulations and requirements you need to follow.

• Certificate of use and occupancy allows your jewelry store to operate at a particular business location. If you lease space, your landlord may already have the use and occupancy certificate.
• Local ordinances and zoning vary from city to city. Your city may have rules about your hours of operation and the type of business you can run in certain areas.

Any business needs business insurance, especially if you have high-value items like jewelry, precious metals, and gemstones. While the risk of personal injury is low in the jewelry industry, theft is high. Be sure to safeguard your business with insurance.

• Business owner policy covers business liability and property insurance under one policy. So, you have coverage if someone slips and falls in your shop. This type of policy usually covers damage or theft of your inventory.
• Jewelers block insurance covers precious gems and high-value items.
• Worker's compensation insurance pays lost wages and medical expenses for employees who are hurt at work. This is a requirement under state law if you hire staff.

Find out what business insurance you need for your jewelry store. Ask several insurance companies for quotes and compare their price and coverage amounts.

Find sources for your equipment, materials, gems, and metals. Anything you need to create your jewelry. You could engage in distributor agreements with wholesale bead designers or order beads or jewels as orders roll in.

You may also need jewelry displays and cases. This could be glass cases that stand permanently in your storefront or on portable display cases for tables. If you plan on traveling with your designs and selling them at conventions, consider the portability of your purchases.

Negotiate favorable terms to pay back creditors. If necessary, look into loans or lines of credit with wholesalers to finance your purchases.

Initially, you may not need employees for your one-person jewelry business. But suppose you operate a retail store or expand operations. In that case, you will need to hire staff, such as salespeople and jewelry designers.

Know the employment laws in your area, from hiring practices to wage compensation and benefits. There are rules regarding hourly wages and when to pay overtime. An employment lawyer can draft employment agreements and help you navigate employment issues.

Whether you have a storefront or an online jewelry business, you should know what you can and can't do when advertising and marketing your business.

If you're a storefront, you might use print, online, or radio ads to market your jewelry business. If you're a home-based business, there are many creative ways to market your designs:

• Set up a website to showcase jewelry and sell it online
• Use Etsy, Amazon, or eBay for online sales
• Sell your designs at local craft shows
• Partner with boutiques and sell your jewelry on consignment
• Make social media posts on Facebook or Instagram to show off designs

Jewelry is ever-evolving in the fashion world. Keep up with trends for fashion jewelry to keep your pieces current.