How to Start a Trophy Shop

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Quick Reference

Many of us likely have a trophy 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.

Business Overview

Operators in this industry sell trophies, medals, and plaques, in addition to providing engraving and printing services. A trophy shop 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.

Industry Summary

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.

Industry Trends

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.

Target Market

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.

 

Costs to Starting a Trophy Shop

Although the barriers to business ownership in this industry are considered low according to IBISWorld, one 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.

Common start-up costs for trophy shops include:

  • The rent, lease or purchase, and renovating/outfitting of the retail space. Costs will vary greatly depending on square footage, amenities, and the location of your shop. You might even like to just rent a kiosk for starters and then expand from there. Budget a minimum of $6,000 if renting or leasing.
  • Equipment such as point of sale (POS) system or cash register, computer, security,  cameras, racks, and shelves. $7,000 – $15,000.
  • Machinery may be one of the largest costs. A laser engraver can cost anything from $3,000 to $30,000. Be sure to do your research and find out what’s available and best suited to your needs. Also, think about regular servicing costs.
  • Inventory. A range of trophies and plaques in different materials and sizes. Potentially other products that can typically be engraved, such as hip flasks, keyrings, or dog tags, for example. This budget item depends on quality, pricing, and volume of items for sale.
  • Initial marketing campaign and signage, anything from $ 1,000 to $6,000.
  • Supplies such as branded bags and gift wrapping – $500 – $2,000.
  • Licensing and Permits – $200 – $1,000, depending on your location.
  • Working capital for the first three to six months of payroll, rent, utilities, internet, etc. ($ 30,000 plus).

 

Steps to Starting a Trophy Shop

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
Free sample business plans

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.

Related: How to do a Trademark Search Before Choosing a Business Name    

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 pros and cons, such as liability exposure, costs, and administrative requirements.

Related: Comparison of Business Entities

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.

Related: What licenses does a trophy shop need?

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.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate bank and credit card accounts is vital and makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

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. Marketing costs will depend on the activity performed and its volume.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A trophy shop needs several types of insurance for full coverage:

  • 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.

Related: Common types of insurance a business may need

Step 10: Hiring 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.

Related: Setting up accounting for your business

 

How much can you potentially make owning 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.

Things to consider before starting a trophy shop

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. For that reason alone, owning a trophy shop can be a rewarding and positive experience.

As a future shop owner, it is important to understand that owning your own business requires skills and perseverance, in addition to an enthusiasm for the industry.

For your business to do well, you should not underestimate the need for good business skills and be well connected to your local community as well as your suppliers. You will need to be ready to make the transition from being employed to being a business owner and to show integrity in all your business decisions. Ensure you check out your competition and find your niche. Don’t be afraid to start small and then grow the business from there. Owning your own business and building it from scratch can be such a rewarding and life-changing experience.

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