Comment posted on The Miniatures Page by Dillon Rinker “…The miniatures business, like most other business, has precious little to do with miniatures and an awful lot to do with business. Unless you have brushed up on your accounting, marketing, networking, etc. you won't make money. Hobbies do not make good businesses….”

Companies of any type must operate based on the restrictions placed upon them by a budget. Owners need to establish an initial budget to determine start up costs and present to a bank as part of a business plan. Too often, this is the last time many stores will feel the need for a budget. They will then feel that a budget is a flexible instrument which can be adjusted as needed to suit the needs of the owner rather than the needs of the store. The store is a separate entity and should be treated as such for longevity. Stay with a budget, it may reduce expansion or annoy customers with your inability to order but it will help ensure your operation. Besides what would they do if you folded. There still would be a delay in their getting the desired product.

Be complete with the budget. Preparation may be time consuming but it will pay benefits in the long run. Be sure you include every aspect of operations and possible product expansion. If you relocate immediately prepare an amended budget. The new location may have additional or reduce costs that will affect your operations.

Accounting is another of those overlooked areas. Not only will it help you manage your limited resources and labor but your stock levels as well. For example: Back in 1978 a person went missing (actually fled the area) who was the assistant manager of a hobby store. The owner with a few friends was able to examine the person’s house. The owner discovered over $10,000 worth of product from the store in the house. This caused a complete examination of the books which revealed that the individual had recorded most of the items as shoplifted over past two years.

Use Certified Public Accountants to help file your annual taxes at least and quarterly reports (if able) as well. Doing the taxes yourself may seem to save money but the cost of computer programs and updates will be expensive. The use of a CPA will also help if you are audited by the state or Federal IRS agencies. If you do not use them, then you will have to reply on your own accounting ability and sweat it out.

Sales taxes are important. Do them in a timely manner. In some states you will receive a tax benefit for doing them early (in Alabama it is 5% and Louisiana 1%). So check in your particular State and city and find out. Also, if you can put the savings aside and use the money to pay for an accountant to do your annual taxes, do it. The money will not pay for the entire cost but will reduce the impact.

A company is not the owner’s private piggy bank. Money from the cash register should not be used to pay for lunch or gas. If you want to set up a petty Cash fund, do it outside of the daily receipt cash register. There should be a petty cash log to record the use of that money for budget purposes. Another example from 1980s: Do not use the Tax Refund generated by the company solely for personal use. One Hobby store that I know of used the entire money from the tax refund to buy a new car and failed to put any of the refund back into the store. They were out of business within the next eight months.

Hobby Business: Discussion of Considerations/Issues by Topic

Shipping Considerations
Finances: Accounting and Budget Preparations
The Initial or Expansion Bank Loans
Pricing Methods
Marketing and Advertising
Selecting the Best Site For Non-retail Companies
Glossary