How to Start a Trophy Shop
Many of us likely have a trophy or award sitting proudly on a shelf at home or work as a reminder of an accomplishment and its celebration. It might be an acknowledgment of academic achievement, of your sports team winning a tournament. It might be for being a star in the latest school theatre production, for being named employee of the month, showing exceptional leadership, or simply for being an all-around super person to work with.
In short, the trophy industry will very likely always be in demand, and investing in setting up your trophy shop could be a solid business decision. Especially if you enjoy the interaction with customers, have a knack for excellent customer service, and know a thing or two about engraving, printing, and custom making awards and trophies.
Trophy Shop Industry Overview
Operators in this industry sell trophies, medals, custom awards, and plaques, in addition to providing engraving and printing services. A trophy store is still your typical brick and mortar retail and falls under the category of small specialty retail stores in the US. With the shrinking market for trophies, along with the increased cost of rent, many trophy shops are finding success by operating online.
The trophy and awards industry is very closely linked to the engraving industry. It is important to understand that the engraving services industry in itself has been declining over the past five years, according to IBISWorld. This is mainly due to a decline in consumer interest in engraving personalized gifts and valuable belongings, such as jewelry and laptops, for example, not trophies.
There are no major players in the trophy and engravings industry, but in terms of the global metal trophy manufacturing market, there are a few bigger trophy manufacturers and online retailers. In the US, these are Trophy Awards Manufacturing Inc in Kentucky and Trophy Arts Inc in Texas, for example.
This sector doesn’t seem to be affected by economic shifts and changes in available disposable income as much as others. On the other hand, the engraving industry had to cope with increasing competition from new forms of customization such as laptop sleeves, phone cases, and decals which are exchangeable and less expensive than engraving.
According to IBISWorld, the small specialty retail stores sector is forecast to increase its revenue by 3.7% to $41.1 billion in 2021.
While larger companies have the advantage when it comes to marketing, purchasing, and distribution, small, local businesses have the competitive edge by having a unique knowledge of their immediate customer base, selling specialty products, and delivering a unique customer experience. Your trophy business might also offer a great depth of selection in a niche category.
The target market for your trophy shop will typically be local schools, community groups, sports clubs, and employers. Offering services and products online can extend your shop’s reach and customer base beyond those local boundaries.
Skills, experience, and education useful in running a trophy shop
Understand your industry and your community. As a rule of thumb, a trophy shop owner who stays aware of industry trends will be better able to ensure the shop stocks the products and offers items and services that will be most in demand. It is equally important to be engaged in your local community. Understanding what events and community milestones are on the calendar and who is involved in organizing these will be a huge advantage.
Retail experience. Previous experience in the retail industry will serve a trophy shop owner. They’ll have a better idea of the tricks and challenges of managing a store, understand pricing, stock taking, and attractive product presentation, for example.
Engraving skills. Although there are no specific educational requirements for engravers, having the technical skills to engrave, etch or print the desired design on a specific material is certainly a plus. You will need a steady hand, dexterity, and the ability to control machines. A sprinkle of creativity will be of benefit.
Customer service and interpersonal skills. This is a very important skill and one you need to enjoy. A shop owner who can provide a memorable customer experience and sound professional advice is far more likely to achieve good sales results and create customer loyalty. Don’t forget that many trophies are passed on from one recipient to the next, creating the opportunity for repeat business that you can plan for.
Management experience. Previous experience in hiring, training, and managing employees will be beneficial for any shop with staff. Having a good understanding of accounting practices and negotiating supply contracts will also be valuable skills.
Marketing talent: Your shop will require a solid marketing strategy and branding efforts to get people through the door, especially during the start-up phase. If marketing is not your forte, this is a skill that you can easily hire out.
Checklist for Starting a Trophy Shop
If you’re thinking about starting your own trophy shop, there are a few things you should keep in mind before launching your business. Here is a checklist of the essentials to get started.
Step 1: Write your Business Plan
You had a great idea. You’ve discussed it with friends and family, perhaps even with a business mentor. The next step in starting your trophy shop should be to write a business plan. It will make you focus on important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, and much more.
Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect trophy shop name can be challenging. Not only does the name have to resonate with your customers and should be easy to find in a directory, but it also has to be available to use.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a trophy shop, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: 3 steps to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Step 4: Select your Location
For a trophy shop, the location is quite important. You’ll want it to be in an area that is easily accessible, preferably with parking. It will make dropping off and picking up trophies a lot easier for your clients and suppliers. Thinking about the volume of stock you want to have readily available may help determine your locale’s size.
Rental costs will depend on the shop’s size, location, and amenities. A shop in a high-traffic area will cost more to rent, but it can also generate greater walk-in business and general public awareness. A trophy shop will benefit from being highly visible and having an inviting storefront as well.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
A trophy shop owner will need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Some common local, state, and federal registrations a trophy shop may need to include a sales tax permit, Employer Identification Number, and Occupancy Permit.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it is one thing but getting the funding to start a trophy shop is another. It is worthwhile to present your business plan to investors and check in with your local chamber of commerce or business association for business incentives. If you need a bank loan to get the business off the ground, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
A trophy shop can and should be very much part of the community fabric. It continues to go hand in hand with end-of-year awards and accolades for special achievements. Setting aside a certain amount each year for local charities should be considered a part of the marketing budget.
A trophy shop will need to set aside a budget for the initial marketing and branding campaign but also to cover a long-term marketing and communications strategy. Common advertising techniques for trophy shops include social media marketing and online marketing. Print advertising and direct mail advertising to schools, sports clubs, and community organizations will also help raise your profile.
Developing a website can be a significant expense, but it can also give a business greater reach and visibility beyond your region.
Step 9: Get Business Insurance
A trophy shop will need to consider several types of insurance to fully protect the business. A few types of insurance to consider include:
– General liability insurance protects the business from expenses like medical and legal bills that it could face if a customer is ever hurt while on the business’ property.
– Commercial property insurance can cover expenses and losses that the business could face if the shop is ever damaged or destroyed by a fire or other type of event.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a shop might face if an employee were ever hurt while working.
Insurance policies will vary in cost depending on the shop’s location, the value of its inventory, and the number of staff. To be able to factor in insurance costs in your budget accurately, it pays to request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
Most trophy shops have a few employees on their payroll to cover shop hours and factor in seasonal demand. According to Talent.com, the average salary for a shop assistant in the US is $15.00, and for an engraver, it’s $14.00. Individual salary will be largely influenced by experience and which state you are in.
A trophy shop’s budget will need to include employee-related expenses such as unemployment insurance and paid time off. It’s also a good idea to factor in training and up-skilling.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an effective accounting system for your trophy shop is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the data gathered can be used to track and monitor trends, stock, and cash flow in the business and maximize profits.
How much does it cost to start a trophy shop?
Although the barriers to business ownership in this industry are considered low, sone of the major challenges of starting a trophy shop is having sufficient start-up funds available for the immediate larger expenses for outfitting a store and inventory.
Some of the common costs to get started include:
– Initial inventory – $500-$5,000
– Building renovation – $5,000-$50,000
– Signage – $1,000-$10,000
– Furniture, display cases, workbench, etc. – $2,500-$10,000
– Point-of-sale (POS), computer, accounting software – $1,000-$3,000
How profitable is a trophy shop?
Not much is published on trophy shops’ profits, but according to the latest IBISWorld report, the small specialty retail stores sector is set to increase its profit margin by a respectable 5.3% in 2021. With consumer spending and consumer confidence as well as corporate profits forecast to rise, the industry revenue is also set to rise.
According to IBISWorld, the engraving industry alone commands a sizable market share of $1 billion in the US. Of note, though, is the increasing competition from online retailers in this sector.
Some trophy stores will also sell promotional products and corporate awards as they will already have an engraving machine.
Are there grants to start a trophy shop?
It’s extremely rare to find a grant to start a trophy shop. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a trophy shop?
The NAICS code for a trophy shop is 453998, which is broadly classified under All Other Miscellaneous Store Retailers.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.