Looking for a custom jewelry business plan? You're in the right place.
A jeweler asking for money gets the same three questions from a bank or an investor. How much of the raise ends up sitting in inventory, and can the studio survive that? What does a $1,650 commission earn once metal, stones and bench time are paid for? What happens to cash when wedding season comes in lighter than hoped? A template with empty boxes won't show you what a credible answer looks like.
This article walks through a complete sample plan for a custom jewelry studio in Hood River, Oregon, section by section, so you can see the structure and write your own with confidence. We cover the executive summary, the SWOT and, above all, the financials.
Here's what you'll take away:
- The executive summary: see how to put a studio, its funding and its first three years on one page, so a lender knows the ask within a minute
- The market and buyer sections: learn how to size a small-town jewelry market from couples, visitors and galleries without inventing statistics
- The order process: see how deposits, quote windows and pickup balances protect a maker from metal-price swings
- The start-up budget: find out how much of a raise goes to inventory and bench equipment, and how much to keep as a reserve
- The first year, month by month: spot the quiet months before you reach them and plan cash around the wedding and visitor seasons
- The five-year profit, cash flow and balance sheet: understand how a bench hire, pay raises and inventory growth show up in the numbers
- The downside case: have an answer ready for the question about orders running 20% short, and the steps the owner takes in response
If you're planning a jewelry studio, read this before you write your own. The business is fictional, so take what fits and change the rest.
In this plan
- The Studio at a Glance
- About the Studio
- The Gorge Market for Handmade Jewelry
- Buyers: Couples, Visitors and Galleries
- From Consultation to Pickup
- Getting Found
- Running the Bench
- Steve Archer and the Team
- Financial Plan: Inventory, Deposits and the Bench
- Raising $235,000 for the bench, the showroom and the first inventory
- Studio figures behind the forecast
- Revenue by kind of work
- Who is at the bench and the counter
- Profit and loss
- Cash, loan payments and inventory
- Balance sheet with inventory on hand
- Inventory turns, margins and break-even
- A thin year for orders: sales 20% under plan
- Where the Numbers Bend
- Sources
To turn this example into your own custom jewelry business plan, use the custom jewelry business plan template.
The Studio at a Glance
Ember Bank designs and makes jewelry to order in Hood River, Oregon: wedding and engagement rings, one-off pendants, a titanium collection in anodized colors, and repair work. It opens in a leased downtown showroom with a bench behind a partition on January 1, 2027. Steve Archer, the founder and goldsmith, has made titanium pieces from a home workshop for three years and already sells to eight galleries. He owns 80% of the company. A local retail owner holds the other 20%.
The studio raises $235,000: $75,000 of Steve's savings, $65,000 from the investor and a $95,000 bank term loan. Of that, $26,000 buys opening inventory, $57,000 pays for bench equipment and showroom fit-out, $132,800 stays as a cash reserve and $19,200 covers pre-opening rent, launch marketing, licensing and legal work.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $238,760 | $373,118 | $492,943 |
| Net income after start-up costs | ($58,450) | ($28,781) | $32,643 |
| Closing cash | $84,904 | $43,143 | $62,550 |
Year 1 brings 60 custom commissions, 480 collection pieces, 24 gallery orders and 260 repair jobs. EBITDA turns positive in July 2027 and stays positive to December. Year 2 loses $28,781 because the bench jeweler, hired in month 14, is on payroll before the extra orders fill the bench. Year 3 is the first profitable year at $32,643.
If orders run 20% below plan, Steve takes a 20% pay cut from month 7, the bench jeweler starts six months late, the finisher is never hired, marketing is trimmed from Year 2 and no distributions are paid. The studio still ends every year with cash in the bank, at no less than $21,070 in Year 3, but it loses money through Year 3 and misses a 1.25x debt-service test until Year 4. The result is thin: with no response at all, a 10% shortfall takes year-end cash below zero in Year 3.
The studio sells on two things a chain jeweler does not usually offer in one visit: a conversation with the person who will make the ring, and a titanium line in colors made at the bench.
About the Studio
Legal name: Ember Bank, LLC, an Oregon limited liability company. The model taxes it as a corporation, although an Oregon LLC is taxed as a pass-through by default, which would put the tax on the owners' returns. Owners: Steve Archer 80%, one local investor 20%. Premises: about 900 square feet of leased ground-floor space in downtown Hood River. Opening: January 1, 2027. Hours: Wednesday to Sunday, 10 a.m. to 5 p.m. (35 hours a week), with Monday and Tuesday by appointment for consultations and bench work. Stage: the lease is in draft, the bench equipment is on order and eight galleries already carry Steve's titanium line.
What the studio sells
| Line | How it earns | Year 1 share of revenue |
|---|---|---|
| Custom commissions | About $1,650 a piece, half paid at order | 41% |
| Collection pieces | About $195 a piece, studio, web and markets | 39% |
| Gallery and boutique wholesale | About $840 an order, net 30 | 8% |
| Repairs and resizing | About $100 a job | 11% |
Where the studio stands in three years
The forecast for 2029 is 121 commissions a year, about 20 active wholesale accounts, a second person at the bench and a profit of about $33,000 after tax. A part-time finisher joins in month 46, and the only distribution to the owners is $20,000 in Year 5.
Rules a jeweler works under
The Federal Trade Commission's Jewelry Guides, at 16 CFR Part 23, are advisory and cover how precious metals, gemstones and treatments may be described. Their scope reaches manufacturers, suppliers and retailers alike. The studio follows them in its wording on tags, quotes and the website, and checks the current text before printing any karat, platinum or lab-grown claim.
Two federal money rules sit near a jewelry counter. The anti-money-laundering rule for dealers in precious metals, stones and jewels (31 CFR 1027.100) reaches a retailer only if it buys more than $50,000 a year of such goods from people other than dealers and other retailers, such as the public. The studio buys metal from a refiner, does not buy scrap from the public and takes a customer's gold only for a specific order, so the accountant confirms the rule stays out of reach. The plan carries no program cost. Cash payments of more than $10,000 in one transaction or related ones are reported to the IRS on Form 8300. The studio takes cards and checks for commissions and confirms the cash rule with the accountant.
Local rules set the opening date more than federal ones do. The kiln, polishing dust and the anodizing baths bring ventilation, fire and waste-disposal questions, and Steve confirms permits and any pretreatment rules with the city and county before the fit-out is finished. The $900 licensing line and the $3,800 legal line are planning figures. The company name needs a check too. Oregon provides a state name review for company names that may suggest a bank (ORS 705.635), so the attorney asks whether "Ember Bank, LLC" needs a name-compliance certificate before the LLC is filed, and the studio trades under another name if the state refuses it. State tax registration is confirmed with the accountant before opening.
The Gorge Market for Handmade Jewelry
Who lives and visits here
Hood River is a Columbia River Gorge town known for windsurfing, orchards and weekend visitors from Portland, about 60 miles west. The year-round base is a small town. The summer months add day visitors and wedding parties who book Gorge venues. Revenue comes from both groups, from online buyers, and from galleries in the Gorge, Portland and central Oregon. No local jewelry-spend figure is used. The forecast is built from unit counts and prices.
The trade itself
The Bureau of Labor Statistics put median pay for jewelers and precious stone and metal workers at $52,540 in May 2025 and projects employment to fall 3% from 2025 to 2035, from about 32,800 jobs. Bench time here goes to work made to order, which a falling national headcount does not directly measure. The bench jeweler's $54,000 and Steve's $54,000 sit around that median.
What titanium changes
Titanium is light and takes color from a thin oxide layer grown by anodizing, which gives blues, purples and golds without plating. It generally cannot be resized by soldering, so a titanium band is made to size and the studio offers a one-time size exchange. Wedding bands in titanium or in titanium with gold inlay are the commission line's anchor product. Gold and platinum make up the rest.
Who else a buyer could choose
| Option | What it offers | Why a buyer picks it | How Ember Bank differs by design |
|---|---|---|---|
| Online makers on marketplaces | Wide choice, wide price range | Easy to compare, delivery to the door | A showroom visit and a named maker for the same price class |
| Mall and chain jewelers | Large selection, financing, familiar names | Convenience and brand | A one-off design drawn with the buyer, not picked from a case |
| Portland bridal jewelers | Large selection, strong bridal reputation | Scale and in-city appointments | A consultation in Hood River without the drive, and titanium |
| Other Gorge craft sellers | Local pottery, glass and some jewelry | Same visitor traffic | A repair and resizing counter that brings people back |
The table describes the options and how this studio positions itself, and it is not a ranking. Prices change often and are not quoted.
Strengths, weaknesses, opportunities and threats
| Strengths | Weaknesses |
|---|---|
| A maker who designs, builds and fits the piece | One senior bench until month 14 |
| Titanium line with eight galleries already buying | No retail brand yet, and no wedding portfolio at launch |
| Half-paid deposits fix price and funding on commissions | Inventory is cash tied up, 1.7 turns in Year 1 |
| Opportunities | Threats |
|---|---|
| Gorge wedding venues and planners as a referral source | A rise in gold and platinum prices before a quote is accepted |
| Gallery accounts reordering twice a year | Online sellers with lower prices on simple pieces |
| Repairs bringing in future commission clients | A quiet wedding year, or a bench injury in the busy season |
Buyers: Couples, Visitors and Galleries
Couples ordering rings
Couples planning a Gorge wedding, or getting engaged while living in the Portland area, who want rings made to a design and dislike the idea of a chain store. Some bring gold from a relative or an old ring to be melted into a new piece. Most visit twice, once to design and once to collect. They want to see sketches, hold samples in titanium and gold, and know the date.
Visitors and online buyers
People who find the studio on a weekend in the Gorge, or through photographs of anodized pieces, and buy one or two collection items at about $195 each. Gift buyers in November and December, and anyone who wants a pendant or earrings in a color, belong here. A buyer takes about 1.4 pieces.
Galleries and boutiques
Owners who carry a few shelves of handmade pieces, reorder twice a year and want a line sheet, prompt delivery and a price that leaves them keystone. Eight accounts already buy the titanium line. Year 1 adds three.
The person with a ring in a drawer
A resizing, a loose stone or a worn clasp brings someone in who may order a commission a year later. Repairs are 11% of Year 1 revenue, and the studio counts them as a source of future customers as well.
What buyers ask for
A piece made to fit them. A clear price with a delivery date. A deposit policy in writing. A person they can call afterward.
From Consultation to Pickup
How a commission moves
A 45-minute consultation, with sketches or CAD renders within five working days, a written quote that holds for 14 days, and a 50% deposit that fixes the price. A wax or printed model is approved by the buyer. Casting and finishing take three to five weeks, with a final fitting and pickup. A rush order adds a fee. Customer-supplied gold is weighed in front of the customer and recorded on a signed form before it is used.
Deposits and customer property
The 50% deposit goes into the operating account and is tracked against its order. Held for about 40 days on average, deposits come to roughly 5% of a year's commission revenue, about $5,400 in Year 1 and $11,600 in Year 3. The model leaves the deposit cash out. Base-case cash stays above the deposits owed in every year. In the weak-year case the real account would hold about $30,400 in Year 3, of which about $9,300 is owed to customers, leaving the $21,070 shown as free cash. The custom-order contract, reviewed by the attorney, says when a deposit is refundable, who carries a metal-price change after the quote window and what happens to a finished piece that is never collected. Customer gold and pieces left for repair are logged on arrival, kept in the safe and insured as other people's property. They never count as studio inventory.
Year 1 commissions
About 150 consultations at a 40% booking rate produce 60 commissions.
| Source of commissions | Commissions | Share |
|---|---|---|
| Wedding venues and planners | 12 | 20% |
| Search and Pinterest | 18 | 30% |
| Instagram and video | 14 | 23% |
| Walk-ins, friends and repeat buyers | 16 | 27% |
How a piece is priced
Each quote adds materials at current metal prices, outside casting, stones, bench hours at a fixed hourly rate and a design fee. The average commission is $1,650, and materials and casting are 36% of it. Metal is bought when the deposit arrives, so the metal price in the quote is the price paid, and a quote not accepted within 14 days is re-priced. Collection pieces carry a flat price list. Wholesale prices are half of the retail list, reviewed twice a year, and a metal clause on the line sheet lets the studio pass on a large move between reviews. Prices rise 3% a year from Year 2.
Growth by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Custom commissions | 60 | 93 | 121 | 135 | 145 |
| Collection pieces | 480 | 720 | 925 | 1,020 | 1,095 |
| Wholesale orders | 24 | 35 | 43 | 47 | 50 |
| Repair jobs | 260 | 390 | 485 | 528 | 558 |
Growth is capped by bench hours. Wedding dates are booked further out before a second person is added at the bench, and wholesale accounts grow by four or five a year.
Getting Found
Where the marketing money goes
Marketing costs $32,000 in Year 1 and splits into $10,000 of launch spend funded from the raise and $22,000 of running costs. That equals 13% of Year 1 revenue, and the share falls to 5% by Year 3 and 4% by Year 5 as referrals and repeat buyers carry more. About 400 new retail customers (60 commission clients and about 340 collection buyers) share the cost, roughly $80 each.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website, shop and process photography (launch) | $6,500 | A booking page for consultations, an online shop, and photographs of rings being made |
| Opening weekend and showroom sign (launch) | $2,000 | A first-week event for the town and Gorge wedding vendors |
| Sample ring sets for venues and planners (launch) | $1,500 | Titanium and gold sizing sets that planners can lend to couples |
| Wedding venue and planner partnerships | $4,500 | Visits, a hosted evening and a referral thank-you; about 12 commissions |
| Search ads and local search | $4,500 | Searches such as "custom wedding rings Oregon"; with Pinterest, about 18 commissions |
| Instagram and short-video content | $4,500 | Short videos of anodizing and casting; about 14 commissions |
| Gallery line sheet and samples | $2,500 | A printed catalog and sample set for three new accounts |
| Photography refresh and email | $2,500 | Two mailings to past buyers and a seasonal photo update |
| Gorge visitor guides and local print | $2,000 | Listings and small ads that reach weekend visitors |
| Gorge events and a regional wedding fair | $1,500 | A table at one fair and local sponsorship |
Craft-fair and gallery-event fees of $3,200 are budgeted separately under operating costs.
Dates to hit in year one
- January 2027: showroom opens, eight gallery accounts supplied.
- April 2027: three new gallery accounts signed, bringing the total to 11.
- June to August 2027: four weekend markets and the first summer peak.
- September 2027: $26,025 of revenue, the best month of the year.
- December 2027: 480 collection pieces sold over the year, and EBITDA positive for six months running.
Running the Bench
The showroom and the bench
About 900 square feet in downtown Hood River at a planning figure of $26 a square foot a year, all in ($23,400 in Year 1), on a five-year lease with a personal guarantee. The lease draft will say how much of that is base rent and how much is building charges. The front third is the showroom with two cases and a consultation table. A partition separates the bench: two stations, the laser welder, rolling mill, kiln and polishing motor. The anodizing station, 3D wax printer and CAD workstation sit at the back. A safe, alarm and cameras are part of the fit-out. The $17,000 fit-out and the $40,000 of bench and anodizing equipment are planning figures until contractor bids and supplier quotes arrive.
Metal, stone and casting suppliers
Gold, platinum and silver come from a refiner on account at 20-day terms, and titanium bar and sheet from an aerospace-grade metals dealer. Stones come from two dealers who send memo parcels for a design. A casting house handles molds above a size Steve can pour himself. All can be replaced. Metal is bought against orders in hand, and only the collection runs are bought ahead.
Metal and stone prices
Gold and platinum prices move daily, and no price is quoted here. The exposure sits in three places: a quote accepted late, collection and wholesale stock bought ahead of a price change, and wholesale lists between reviews. A 14-day quote window, metal bought at deposit and a metal clause on the line sheet cover the first and third. The second is held down by keeping collection runs small and titanium-heavy. About half of the 36% material cost on a commission is precious metal, a planning figure, so a 20% jump the studio could not pass on costs about 3.6% of commission revenue, $7,600 in Year 3. A larger or longer rise is tested in the stress table after the financial plan.
Bench capacity
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Bench hours the revenue needs | about 1,300 | about 2,000 | about 2,500 | about 2,800 | about 3,000 |
| Bench hours available | about 1,400 | about 2,800 | about 2,900 | about 3,100 | about 3,800 |
| Share of available hours used | 92% | 71% | 87% | 89% | 78% |
| Busiest month against that month's hours | 122% (September) | 122% (January) | 94% (August) | 104% (August) | 85% (August) |
| Who supplies them | Steve | Steve, then the bench jeweler from February | Steve and the jeweler | Steve and the jeweler, the finisher from October | Steve, the jeweler and the finisher |
A commission takes about 10 bench hours, a collection piece 0.8, a wholesale piece 0.8 and a repair 0.6. Monthly figures use the same seasonal pattern as the revenue forecast, so they are approximate. The bench jeweler joins in month 14 (February 2028) and a part-time finisher in month 46 (October 2030).
Averages hide the thin months. In Year 1, Steve can put in about 117 bench hours in a month. From July to December the work in hand runs 4% to 22% above that, and September, at about 143 hours, is the peak. Collection pieces are built ahead in January to May, when the bench has about 185 spare hours, and Steve works longer in the peak weeks, with a contract jeweler on call for stone setting and the holiday helper taking packing and counter time off the bench in November and December. In Year 2, January 2028 is the one month when work in hand tops what Steve can supply, before the jeweler starts. In Year 4, August and September run about 4% and 1% over the two benches until the finisher arrives, and overflow casting goes to the outside house.
Inventory and security
Inventory is counted every month and fully before the holiday season. A jeweler's block policy is meant to cover stock in the case, in the safe, in the mail and at markets, but insurers set limits for each, and they usually require a rated safe and a monitored alarm. Broker quotes will fix those limits and the premium before opening, along with cover for memo stones and customers' property. Insurance totals $7,600 in Year 1, a planning figure that also pays for general liability, property and business-interruption cover on the fit-out, cyber cover and the disability policy on Steve. Workers' compensation is in the payroll load. Online orders ship insured and signature-required.
Software
An online shop and point of sale, CAD and wax-modeling software, accounting and a client portal for approving renders cost $5,200 in Year 1.
Steve Archer and the Team
Steve Archer, founder and goldsmith
Steve trained for six years at the bench of a Portland bridal jeweler, where he made and set rings, then worked three years on his own in a home workshop, building the titanium line and the eight gallery accounts. His $75,000 of savings is 32% of the money raised. He draws a $54,000 salary from the studio.
Where the team is thin
Steve has not run a staffed showroom and has not sold at wholesale to more than a handful of accounts. The part-time associate brings retail experience, the investor owns a retail business in the Gorge and reviews the numbers each quarter, and wholesale growth is paced at four or five accounts a year.
If Steve is off the bench
Steve is the only goldsmith for the first 13 months. A disability policy on him is part of the insurance line, and a contract jeweler is on call for repairs and stone setting. The bench jeweler hired in month 14 removes most of that exposure.
Outside help
A Hood River accountant prepares the books and the tax return. An attorney reviews the custom-order contract and the lease. The investor meets Steve each quarter.
Ownership and the bank
Steve owns 80% and the investor 20%. The bank loan carries Steve's personal guarantee, a lien on the equipment and a covenant to deliver quarterly accounts. The bank may also ask for a lien on inventory, with customer-owned pieces and customer gold excluded in writing. The investor's $65,000 is equity and has no repayment date.
Financial Plan: Inventory, Deposits and the Bench
Three questions come first when a lender opens a plan for a bench jeweler: how much of the raise ends up in inventory and equipment, what a commission earns once metal and stones are paid for, and whether cash survives the second year, when principal payments start and the bench hire arrives. The tables below take them in that order and then cover payroll, profit, cash, the balance sheet, inventory turns and a weak-year case. Year 1 runs month by month and Years 2 to 5 run annually.
Raising $235,000 for the bench, the showroom and the first inventory
| Use of funds | Amount |
|---|---|
| Opening inventory: titanium and gold bar and sheet, platinum, silver, stones, findings and the first collection run | $26,000 |
| Bench equipment: laser welder, rolling mill, kiln, casting and finishing tools | $27,000 |
| Anodizing station, 3D wax printer, CAD workstation, camera and light box | $13,000 |
| Showroom fit-out: cases, lighting, consultation table, security and bench partition | $17,000 |
| City and county business registration, seller registration | $900 |
| Legal: LLC, lease review, gallery wholesale terms and custom-order contracts | $3,800 |
| Pre-opening rent during fit-out and the first inventory build | $4,500 |
| Launch: website and shop, product and process photography, opening weekend | $10,000 |
| Cash reserve for the slow winter and the first bench hire | $132,800 |
| Total uses | $235,000 |
| Source of funds | Amount |
|---|---|
| Steve Archer's savings | $75,000 |
| Bank term loan | $95,000 |
| Local investor, owner of a Gorge retail business (20% stake) | $65,000 |
| Total sources | $235,000 |
Three sources fund the studio. Steve Archer contributes $75,000 of savings, 32% of the $235,000. A local investor who owns a retail business in the Gorge contributes $65,000 for 20% of the company, which is 28% of the money raised and values the studio at $325,000 once the money is in. The bank supplies $95,000 at 10.5% over seven years, with the first twelve months interest-only. It takes the equipment as security along with Steve's personal guarantee, and the rate is a planning figure, not a quote. Equity is 60% of the total and the loan 40%. Of the money, $26,000 goes to opening inventory and $57,000 to the bench and showroom. The $132,800 reserve is the largest single item, on purpose. It covers the Year 1 loss, the inventory added as sales grow, the Year 2 loss that follows the bench hire and the first principal payments, and it is sized against the weak-year case further down, where the Year 3 low is $21,070. In the base case the lowest year-end cash is $43,143, in Year 2.
Studio figures behind the forecast
- Custom commissions are the high-ticket line. Year 1 holds 60 pieces at an average of $1,650, which is $99,000 and 41% of revenue. A typical order is a pair of wedding bands, an engagement ring or a one-off pendant in titanium, gold, platinum or a mix. Materials and outside casting come to 36% of the price. Each piece takes about 10 bench hours, covering CAD and wax work, finishing and stone setting.
- Collection pieces are the titanium line sold off the shelf: earrings, pins, pendants and a small ring range. Year 1 brings 480 pieces at an average of $195, or $93,600. About 170 sell at the showroom, 230 online and 80 at four summer markets. A buyer takes about 1.4 pieces, so the line reaches roughly 340 customers. Direct costs are 26% of price and each piece takes about 0.8 bench hours.
- Gallery and boutique wholesale is 24 orders in Year 1 from about 11 accounts, 8 of which already carry Steve's work. An order averages $840 at wholesale prices, set at half of retail, which is about eight pieces. Direct costs are 52% of wholesale revenue because the cost of making a piece does not fall when the price does. Accounts pay on 30-day terms and the studio does not place work on consignment.
- Repairs and resizing come to 260 jobs. At an average of $100, that is $26,000. The work covers gold and silver resizing, clasp and prong repair, cleaning and written replacement-value letters for insurance. It brings customers through the door and takes about 0.6 hours a job. Titanium bands generally cannot be resized, so a one-time size exchange is part of the sale and its cost sits in direct costs.
- Commissions climb from 60 to 145 by Year 5, collection pieces from 480 to 1,095, wholesale orders from 24 to 50 and repair jobs from 260 to 558. Prices increase 3% a year from Year 2. Revenue growth is 56% in Year 2, which includes the part-year effect of opening, and eases to 10% in Year 5.
- Bench capacity limits revenue. Year 1 needs about 1,300 bench hours, Year 3 about 2,500 and Year 5 about 3,000. Steve supplies about 1,400 hours a year at the bench, after time in the showroom, on design and on buying. The bench jeweler adds about 1,500 hours a year from month 14 and the part-time finisher about 900 from month 46. Annual totals hide the busy months: the capacity table in the operating section shows July to December of Year 1 running over what Steve can put in at the bench in an average month.
- Gold, platinum and silver are bought against orders in hand, and about half of the 36% material cost on commissions is precious metal, which is a planning figure. A 20% jump in metal prices that the studio could not pass on would cost about 3.6% of commission revenue, or $7,600 in Year 3. Quotes hold for 14 days and a 50% deposit fixes the price at order, with the rest paid at pickup, so metal risk sits mainly in collection inventory on the shelf and in wholesale lists between price revisions. Customer deposits are not shown as a liability. Held for about 40 days on average, they come to roughly 5% of a year's commission revenue, $5,400 in Year 1 and $11,600 in Year 3, and leaving them out understates cash by about that much. The balance sheet carries receivables of five days of sales, more than wholesale terms and card settlement alone would produce.
- Inventory on the balance sheet starts at $26,000 and grows to $44,265 at the end of Year 1 and $73,404 by Year 5. That is 1.7 turns a year at first, rising to 2.6, because stones, metal bar and finished collection pieces sit on the shelf for months. Suppliers give 20 days to pay.
- Full-time wages carry a 27% load and part-time wages 15% to pay for payroll taxes, workers' compensation and benefits. The personnel table uses launch rates, and a 3% raise each year from Year 2 is charged on its own line. Oregon's minimum wage in Hood River County is $15.55 an hour through June 30, 2027 and adjusts every July 1; the associate's rate, about $18 an hour at 22 hours a week, sits above it from January 2027. The lowest rate, about $17 an hour for the holiday helper at about 20 hours a week, first applies in November 2027, after the July 1, 2027 adjustment, and is checked against the BOLI rate before hiring. The associate, bench jeweler and finisher are hourly and non-exempt, so busy weeks bring overtime at time and a half, which the model does not carry separately. Steve's $54,000 is close to the national median for jewelers and metal workers cited in the Sources section and is already in the costs, so every profit line is what remains after he is paid. The finisher's $22,000 is an annual-equivalent wage for about 900 hours.
- The studio takes about 900 square feet in downtown Hood River at a planning figure of $26 a square foot a year, inclusive of any share of building charges the lease adds. That comes to $23,400 in Year 1 and rises about 3% a year. The $7,600 insurance line is also a planning figure that broker quotes would replace. It pays for a jeweler's block policy on inventory, equipment and other people's property held for repair or on memo, general liability, property and business-interruption cover on the fit-out, cyber cover and a disability policy on Steve. Workers' compensation sits in the payroll load. The line rises with inventory and headcount.
- Marketing totals $32,000 in Year 1: $10,000 of launch spend funded from the raise and $22,000 spent through the year. About 400 new retail customers (60 commission clients and 340 collection buyers) share that cost, roughly $80 each, or 13% of Year 1 revenue. By Year 3 the share is down to 5% and by Year 5 to 4%, because referrals and repeat buyers bring in more of the business.
- Variable costs move with sales: card fees are 2.9%, insured shipping and packaging 1.8%, and metal loss, re-pricing and stone returns beyond the planned margin 1%. A distribution of $20,000 in Year 5 splits 80% to Steve and 20% to the investor. None is paid earlier because cumulative net income stays below zero through Year 4, and the $20,000 is 42% of the five-year cumulative net income of $47,791. The LLC is modeled with corporate tax: the 21% federal corporate rate plus Oregon's 6.6% corporate excise rate on the first $1 million of taxable income, with the early losses carried forward. The model leaves start-up costs out of the loss pool, which overstates tax slightly, and applies no federal 80% limit to carryforward use, which would add a small tax charge in Year 3. Oregon also sets a minimum excise tax by sales band, starting at $150, which the model does not carry. Taxed as a pass-through, the studio would move this tax to its owners' returns, so the corporate rates are a cautious stand-in.
Revenue by kind of work
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Custom commissions: wedding bands, engagement and one-off pieces | $99,000 | $158,054 | $211,809 | $243,405 | $269,278 |
| Collection pieces: studio, website and market sales | $93,600 | $144,612 | $191,360 | $217,343 | $240,324 |
| Gallery and boutique wholesale | $20,160 | $30,282 | $38,320 | $43,141 | $47,271 |
| Repairs, resizing and replacement-value letters | $26,000 | $40,170 | $51,454 | $57,696 | $62,803 |
| Total revenue | $238,760 | $373,118 | $492,943 | $561,585 | $619,676 |
| Growth on prior year | – | 56% | 32% | 14% | 10% |
Commissions and the collection each carry about 40% of Year 1 revenue and stay close to that mix through Year 5. Wholesale is the smallest line at about 8% of revenue. It is kept small on purpose, because it fills the bench in months when walk-in trade is quiet but earns the lowest margin. Repairs are 11% of Year 1 revenue and fall to 10% by Year 5.
The first twelve months
| Month | Custom commissions: wedding bands, engagement and one-off pieces | Collection pieces: studio, website and market sales | Gallery and boutique wholesale | Repairs, resizing and replacement-value letters | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $4,950 | $2,730 | $840 | $1,000 | $9,520 | ($8,901) |
| Feb 2027 | $4,950 | $3,120 | $840 | $1,200 | $10,110 | ($8,491) |
| Mar 2027 | $6,600 | $4,485 | $1,680 | $1,500 | $14,265 | ($5,608) |
| Apr 2027 | $8,250 | $5,850 | $2,520 | $1,600 | $18,220 | ($2,863) |
| May 2027 | $8,250 | $7,215 | $1,680 | $2,000 | $19,145 | ($2,221) |
| Jun 2027 | $8,250 | $9,555 | $1,680 | $2,400 | $21,885 | ($319) |
| Jul 2027 | $8,250 | $10,725 | $1,680 | $2,800 | $23,455 | $770 |
| Aug 2027 | $8,250 | $11,115 | $2,520 | $2,900 | $24,785 | $1,693 |
| Sep 2027 | $11,550 | $9,555 | $2,520 | $2,400 | $26,025 | $2,554 |
| Oct 2027 | $9,900 | $8,385 | $2,520 | $2,400 | $23,205 | $597 |
| Nov 2027 | $9,900 | $9,555 | $840 | $2,700 | $22,995 | $451 |
| Dec 2027 | $9,900 | $11,310 | $840 | $3,100 | $25,150 | $1,947 |
Revenue opens at $9,520 in January, climbs through spring as wedding bands are ordered for summer and fall dates, and peaks at $26,025 in September, when summer visitors and the first wholesale holiday orders overlap. A second, smaller lift comes in December. EBITDA is negative from January to June and positive from July to December. The monthly view spreads each year's costs evenly and does not time inventory purchases or receivables, so a cash low inside a year is approximate and can sit below the year-end balances quoted here. Year 1 closes with $84,904 in the bank after the inventory build, and the lowest year-end balance is $43,143 in Year 2.
Who is at the bench and the counter
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder, designer and goldsmith | $54,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Showroom and online-order associate (part time, about 22 hours a week) | $21,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Holiday packing and showroom help (part time, November and December) | $18,000 | Month 11 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Bench jeweler | $54,000 | Month 14 | – | 1 | 1 | 1 | 1 |
| Bench assistant and finisher (part time) | $22,000 | Month 46 | – | – | – | 0.5 | 0.5 |
| Total payroll incl. on-costs | $96,180 | $159,045 | $164,760 | $171,085 | $190,060 |
Steve and a part-time showroom and online-order associate (about 22 hours a week) open the studio. The showroom is open 35 hours a week, Wednesday to Sunday. The associate works Friday to Sunday and Steve covers Wednesday and Thursday from the bench, so counter visits interrupt his bench time on those days, and on the four market weekends the associate runs the showroom alone. A part-time holiday helper covers packing and the counter in November and December of each year. The bench jeweler joins in month 14, February 2028, when Year 2 commission and collection orders push bench hours past what one person can supply. A part-time finisher joins in month 46, October 2030, to take polishing, stone cleaning and repairs. The pay shown for each part-time role is its annual equivalent, and the holiday helper is paid for two months of each year.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $238,760 | $373,118 | $492,943 | $561,585 | $619,676 |
| Direct costs (metal, stones, casting and finishing bought in, anodizing supplies) | ($73,059) | ($114,172) | ($150,838) | ($171,842) | ($189,617) |
| Gross profit | $165,701 | $258,946 | $342,105 | $389,743 | $430,059 |
| Payroll incl. on-costs | ($96,180) | ($159,045) | ($164,760) | ($171,085) | ($190,060) |
| Rent | ($23,400) | ($24,100) | ($24,800) | ($25,500) | ($26,300) |
| Utilities | ($3,600) | ($3,700) | ($3,800) | ($3,900) | ($4,000) |
| Marketing | ($22,000) | ($24,000) | ($25,500) | ($26,500) | ($27,500) |
| Insurance | ($7,600) | ($8,200) | ($8,800) | ($9,300) | ($9,800) |
| Professional fees | ($5,000) | ($5,300) | ($5,600) | ($5,900) | ($6,200) |
| Software subscriptions | ($5,200) | ($5,500) | ($5,800) | ($6,000) | ($6,200) |
| Card processing fees (2.9% of sales) | ($6,924) | ($10,820) | ($14,295) | ($16,286) | ($17,971) |
| Insured shipping, packaging and gift boxes (1.8% of sales) | ($4,298) | ($6,716) | ($8,873) | ($10,109) | ($11,154) |
| Polishing, abrasives, gas, wax, lab supplies and small tools | ($4,800) | ($5,600) | ($6,200) | ($6,600) | ($6,900) |
| Craft-fair and gallery-event fees | ($3,200) | ($3,500) | ($3,800) | ($4,000) | ($4,200) |
| Metal loss, re-pricing and stone returns beyond planned margin (1% of sales) | ($2,388) | ($3,731) | ($4,929) | ($5,616) | ($6,197) |
| Licenses and state filings | ($900) | ($950) | ($1,000) | ($1,050) | ($1,100) |
| Equipment replacement and showroom refresh | $0 | ($2,500) | ($3,000) | ($8,500) | ($3,500) |
| Bad debt allowance (gallery accounts) | ($600) | ($1,000) | ($1,300) | ($1,500) | ($1,600) |
| Annual pay raises (3% a year) | $0 | ($4,771) | ($10,034) | ($15,864) | ($23,854) |
| EBITDA | ($20,389) | ($10,487) | $49,614 | $72,033 | $83,523 |
| Depreciation | ($8,886) | ($8,886) | ($8,886) | ($8,886) | ($8,886) |
| Interest | ($9,975) | ($9,408) | ($8,086) | ($6,618) | ($4,988) |
| Income tax | $0 | $0 | $0 | ($5,542) | ($18,258) |
| Net income before start-up costs | ($39,250) | ($28,781) | $32,643 | $50,988 | $51,391 |
| Start-up costs expensed at opening (legal, licensing, pre-opening rent, launch marketing) | ($19,200) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($58,450) | ($28,781) | $32,643 | $50,988 | $51,391 |
Before start-up costs the studio loses $39,250 in Year 1; after them the loss is $58,450. Year 2 loses $28,781 at the net line, with EBITDA of negative $10,487, because the bench jeweler is on payroll for 11 months of Year 2 before the extra orders fill the bench. Year 3 is the first profitable year at $32,643, a net margin of 6.6%. Years 4 and 5 add $50,988 and $51,391. The model applies Year 1's blended direct-cost rate, 30.6% of revenue, to every year, which gives a 69% gross margin before Steve's and the jeweler's bench time, since that sits in payroll. The pay-raise line climbs from $4,771 in Year 2 to $23,854 in Year 5 and takes a growing bite out of margin. Income tax is zero until Year 4, when it reaches $5,542, because the early losses shelter the Year 3 profit and part of Year 4's; it is $18,258 in Year 5.
Cash, loan payments and inventory
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($93,096) | ($29,761) | $32,729 | $54,833 | $56,011 |
| Bench equipment and showroom fit-out | ($57,000) | $0 | $0 | $0 | $0 |
| Funding received | $235,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($12,000) | ($13,322) | ($14,790) | ($16,420) |
| Owner distributions | $0 | $0 | $0 | $0 | ($20,000) |
| Net change in cash | $84,904 | ($41,761) | $19,407 | $40,043 | $19,591 |
| Closing cash | $84,904 | $43,143 | $62,550 | $102,593 | $122,184 |
Operations absorb $93,096 of cash in Year 1, mostly the $44,265 of inventory on the shelves, which includes the $26,000 opening purchase, plus an operating loss that already carries the start-up costs expensed at opening. At the end of Year 1, cash is $84,904. It drops to $43,143 in Year 2, the lowest year-end balance, as principal payments of $12,000 begin, then climbs every year to $122,184 in Year 5. The only distribution is $20,000 in Year 5. Cumulative net income is still negative at the end of Year 4 (minus $3,601 in retained earnings), so nothing is paid before then. The loan balance drops from $95,000 to $38,468 by the end of the forecast.
Balance sheet with inventory on hand
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $84,904 | $43,143 | $62,550 | $102,593 | $122,184 |
| Accounts receivable | $3,271 | $5,111 | $6,753 | $7,693 | $8,489 |
| Inventory at cost (metal, stones, findings and finished pieces) | $44,265 | $54,543 | $63,709 | $68,960 | $73,404 |
| Bench equipment and showroom fit-out (net) | $48,114 | $39,229 | $30,343 | $21,457 | $12,571 |
| Total assets | $180,553 | $142,025 | $163,355 | $200,703 | $216,649 |
| Owed to metal, stone and casting suppliers | $4,003 | $6,256 | $8,265 | $9,416 | $10,390 |
| Bank term loan | $95,000 | $83,000 | $69,678 | $54,888 | $38,468 |
| Paid-in capital | $140,000 | $140,000 | $140,000 | $140,000 | $140,000 |
| Retained earnings | ($58,450) | ($87,231) | ($54,588) | ($3,601) | $27,790 |
| Total liabilities and equity | $180,553 | $142,025 | $163,355 | $200,703 | $216,649 |
Inventory turns, margins and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -8.5% | -2.8% | 10.1% | 12.8% | 13.5% |
| Net margin (before start-up costs) | -16.4% | -7.7% | 6.6% | 9.1% | 8.3% |
| Payroll incl. pay raises as share of revenue | 40% | 44% | 35% | 33% | 35% |
| Revenue per full-time equivalent at year end | $119,380 | $124,373 | $164,314 | $160,453 | $177,050 |
| Average monthly revenue | $19,897 | $31,093 | $41,079 | $46,799 | $51,640 |
| Monthly revenue needed to cover operating costs | $22,345 | $32,352 | $35,121 | $38,149 | $41,611 |
| Debt service cover (EBITDA / interest + principal) | -2.0x | -0.5x | 2.3x | 3.4x | 3.9x |
Year 1 needs $22,345 of revenue a month to cover running costs and gets $19,897 on average, so it loses money. In Year 2 the requirement is $32,352 against an average of $31,093 and the studio is still short. Year 3 is the first year above the line, with $41,079 a month against $35,121 needed. Debt service cover is below zero in Years 1 and 2, because EBITDA is negative, and reaches 2.3x in Year 3, then 3.4x and 3.9x. From Year 2 the loan costs $21,408 a year in principal and interest, paid from the reserve until earnings cover it, so for two years the bank lends against the owners' equity and Steve's guarantee rather than against cash flow. Steve would ask the bank to start the cover test with the Year 3 figures. Inventory turns are 1.7 in Year 1, 2.4 in Year 3 and 2.6 in Year 5; a turn is direct costs divided by year-end inventory. In Year 1 every dollar of inventory returns $3.74 of gross profit. Payroll, raises included, takes 40% of revenue in Year 1, 44% in Year 2 and 35% in Year 5.
A thin year for orders: sales 20% under plan
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $191,008 | $298,494 | $394,354 | $449,268 | $495,741 |
| Net income before start-up costs | ($62,689) | ($19,371) | ($7,248) | $20,982 | $43,934 |
| Net income after start-up costs | ($81,889) | ($19,371) | ($7,248) | $20,982 | $43,934 |
| Closing cash | $70,171 | $39,793 | $21,070 | $32,115 | $65,103 |
Sales on every revenue line run 20% under plan in every year, and Steve responds once the shortfall shows. From month 7 he takes a 20% pay cut. The bench jeweler starts in month 20 instead of month 14, the part-time finisher is never hired, the opening inventory purchase is 20% smaller with the saving kept as cash, equipment replacement is skipped, and marketing is trimmed 20% from Year 2 because the Year 1 launch spend is already committed. Card fees, insured shipping, the metal-loss line and the bad-debt allowance fall with sales, and no distributions are paid. Rent, utilities, insurance, software, professional fees, licenses, bench supplies and fair fees stay at plan, and the associate and holiday helper keep their hours. The lowest year-end cash is $21,070, in Year 3, and cash is below the base case in every year. The studio loses $81,889 in Year 1 after start-up costs, $19,371 in Year 2 and $7,248 in Year 3, then earns $20,982 and $43,934. Equity ends Year 1 at $58,111. Debt service cover is negative in Year 1, about zero in Year 2 and 0.5x in Year 3, then 1.7x in Year 4, so a 1.25x test would be missed through Year 3. Steve would ask the bank to start the cover test with the Year 4 figures, to hold a $25,000 standby line that these figures leave undrawn, and to stop distributions until cover is back above 1.25x. With Steve alone at the bench through month 19, January to July of Year 2 holds about 890 bench hours of work against the 820 he can supply, about 9% over. Wedding dates would be booked further out and overflow casting and finishing sent to a contract jeweler.
Where the Numbers Bend
One input at a time
Each row changes only the named input in the base case, in all five years, with no response from Steve; in the opening row the bench hires move with the opening date. Revenue rows also scale card fees, insured shipping, the metal-loss line and the bad-debt allowance with sales. Direct costs stay at the base blended rate of 30.6% except where a row says otherwise. Cash is the year-end balance, the same basis as the base case. The $20,000 Year 5 distribution stays in every row and does not set any lowest-cash figure.
| Case | Year 1 net income after start-up costs | Year 3 net income | Lowest year-end cash | Year 3 debt service cover |
|---|---|---|---|---|
| Base case | ($58,450) | $32,643 | $43,143 (Year 2) | 2.3x |
| Revenue 10% under plan | ($73,599) | $1,371 | ($3,918) (Year 3) | 0.9x |
| Commission revenue 25% under plan, other lines on plan | ($72,816) | $1,799 | ($1,215) (Year 3) | 0.9x |
| Direct costs 3 points higher | ($65,613) | $17,854 | $22,601 (Year 2) | 1.6x |
| Wages 10% higher | ($68,068) | $15,164 | $17,143 (Year 2) | 1.5x |
| Rent 10% higher | ($60,790) | $30,163 | $38,393 (Year 2) | 2.2x |
| Opening two months late, ramp restarted in March, bench hires two months later | ($85,087) | $32,643 | $28,279 (Year 2) | 2.3x |
| Inventory at 40% of direct costs instead of 25% | ($58,450) | $32,643 | $26,017 (Year 2) | 2.3x |
In the commission row the variable lines scale with total sales and the blended direct-cost rate falls to 30.0% as the 36% commission line shrinks. In the opening row, January and February bring no sales, the opening ramp starts again in March, rent and payroll continue, and the bench jeweler and finisher start two months later (April 2028 and December 2030). Year 1 revenue falls by $41,983 to $196,777, direct costs stay at 30.6% of sales and Years 2 to 5 revenue does not change. The reserve covers the slip, with $28,279 left at the end of Year 2, or $16,506 if the hires keep their planned dates.
The table is fragile in two places. A 10% revenue shortfall, or a 25% shortfall in commissions alone, takes year-end cash below zero in Year 3 if Steve does nothing. The weak-year case above survives a 20% shortfall only because it cuts pay, delays the hire and trims marketing from the months the shortfall shows. Outside revenue, direct costs and wages matter most: three more points of direct cost cut Year 3 profit by 45%, ten percent more in wages by 54%, while a 10% rise in rent costs $2,480.
What a lender would still ask
- Debt service cover is below zero in Years 1 and 2 and 2.3x in Year 3. The loan costs $21,408 a year from Year 2 and is paid from the reserve until earnings catch up, so the bank is lending against equity, the guarantee and about $57,000 of equipment and fit-out that would sell for far less than it cost. Will it start the test with the Year 3 figures, and does it want a lien on inventory?
- The reserve against the low: $132,800 raised, a base-case low of $43,143, a weak-year low of $21,070 and a $25,000 standby line that the plan asks for and has not been offered.
- The lease: term, the personal guarantee, whether $26 a square foot is truly all in, any landlord allowance, renewal rights and assignment to the bank. The model has no separate security deposit; the $4,500 of pre-opening rent is the only up-front lease cash.
- The calendar: permits, the fit-out and equipment delivery against a January 1, 2027 opening. The two-month opening row above prices a slip: $41,983 less Year 1 revenue and a $28,279 year-end low.
- Deposits and customer property: how deposits are held, what the contract says on cancellation and uncollected pieces, and how customer gold and repair items are insured and kept out of the bank's lien.
- Metal and stone prices: how a move larger than the 20% case would reach quotes and the wholesale line sheet, and what a sustained fall does to stock held above replacement cost.
- Insurance: broker quotes for the block policy at $7,600, the safe and alarm rating the insurer requires, limits for market days and the mail, and key-person cover on Steve if the bank asks for an assignment.
- Bench capacity: Year 1 runs over Steve's monthly hours from July to December, and the overflow plan rests on a contract jeweler who is not yet signed.
- Owner experience: Steve has not run a staffed showroom, and has sold wholesale to only eight accounts. Who covers the counter when the associate is out?
- Wholesale concentration: 11 accounts in Year 1, eight of them existing, with no contracts, a $600 bad-debt allowance and 30-day terms.
- The equity: why 20% for $65,000, which values a first-year studio at $325,000, and what the investor earns: 20% of one $20,000 distribution in Year 5, which is $4,000, with no exit forecast.
- Owner tax: the model charges corporate tax and pays no tax distributions. A pass-through LLC would leave the owners paying tax on profit they do not receive in cash.
- The company name: whether Oregon's name review allows "Bank" in the name of a jewelry studio.
Sources
- Bureau of Labor Statistics, Jewelers and precious stone and metal workers, Occupational Outlook Handbook: median pay of $52,540 in May 2025, a projected 3% decline in employment from 2025 to 2035, and about 32,800 jobs.
- Legal Information Institute, 16 CFR 23.0, Scope and application: the FTC Jewelry Guides apply to manufacturers, suppliers and retailers. The plan describes the Guides in general terms only.
- Legal Information Institute, 31 CFR 1027.100, Definitions: dealer and retailer, with a $50,000 purchase and sales test.
- Internal Revenue Service, Form 8300 and reporting cash payments of over $10,000.
- Oregon Bureau of Labor and Industries, Oregon minimum wage: $15.55 an hour in Hood River County from July 1, 2026 to June 30, 2027, as shown in October 2026.
- Oregon Department of Revenue, Revenue streams: corporation excise tax of 6.6% on the first $1 million of taxable income and 7.6% above that, with a minimum tax that depends on Oregon sales, as shown in October 2026.
- Legal Information Institute, 26 U.S.C. 11, Tax imposed: the federal corporate rate of 21% of taxable income under subsection (b).
- OregonLaws, ORS 705.635, Certificate of approval of certain business registry names.
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