Spark Craft Studios takes the "club" concept to a new category, led by two recent MBAs who call this "the third year" of B-school

By Jan Stephenson, Co-founder & CEO, Spark Craft Studios

Spark Craft Studios (www.sparkcrafts.com) is a small company, but we have big dreams of growth. We provide customers with a stylish "craft club" similar to an upscale health club. It's a brand-new concept. You can buy craft supplies and then spread out in our workspace, using our tools, equipment, and other resources. We sell studio memberships, classes, private parties (for Girls' Nights Out, bridal showers, baby showers, and adult birthday parties), special events (such as "Wine & Craft," our monthly wine-tasting and craft project), and retail craft supplies.

Amy Appleyard and I co-founded Spark Craft Studios in January, 2005, after developing the concept during a business-plan project at the MBA program at Boston University. Encouraging feedback from angel investors during a presentation convinced us to launch Spark after graduation.

Being ambitious, we carry big jobs. I'm responsible for stewarding the creative vision and long-term strategic goals of the company. I oversee studio membership, classes, special events, and community and business partnerships, as well as marketing, sales, and public-relations initiatives. Amy manages all internal operations and day-to-day activities, including supervising the company's finances and accounting, retail and studio operations, and technology systems.

We faced a lot of challenges starting out. We needed startup capital, so we raised it from angel investors, family, and friends. To sell an unproven concept, we pre-sold memberships before we even had our studio. We found a lawyer to help issue equity and hired an accountant. Renting property as "non-credit" tenants (i.e. not a Starbucks) was tough, but we convinced our landlord to let us have the space with four month's rent as a deposit. We hired craft instructors and Creativity Consultants (our retail/studio staff) while we were painting, refurbishing, and decorating our 3,000-square-foot retail space.

In all, it took us one year to go from business plan to actual business. This is what a typical day is like for us:

8:30 a.m. We carpool to the studio and debrief events from the night before during the 25-minute drive.

8:55 a.m. Quick stop at our favorite café, Diesel. We like to support other women-owned small businesses.

9:00 a.m. Arrive at the studio, turn off alarm, and turn on lights in the 10 classrooms, studios, and retail areas. Activate point-of-sale system and make sure customer/sales data is backed up. Check voice mail and return calls for class/event registrations and private party bookings.

9:15 a.m. Open up laptops in our tiny office to get some e-mail and paperwork done before opening the doors. The phone starts ringing with registrations and inquiries.

9:30 a.m. Amy delves into QuickBooks. We have daily finance meetings. We have decided to enter a Series B funding round, so I'm working on a press/investor kit to attract publicity, clients, and new investors. Amy is tweaking the financial model that we'll share with current and prospective investors.

10:00 a.m. Unlock the front door. We take turns waiting on customers.

10:30 a.m. I work on programming -- coordinating instructors, determining class and event content -- or on brainstorming new program ideas to maximize sales. Amy works on staffing Creativity Consultants for the week ahead and then turns to payroll or paying bills.

11:00 a.m. Impromptu discussion of pricing strategy for certain products and programs. Since there's no set rule for marking up craft supplies and pricing craft classes, we have to go on what's competitive and what we think something is worth to our clientele. We research competitors online and make a final decision.

12:00 noon. Brown-bag lunches at our desks while we work. Some of our studio members stop in for Knitting Club or to work on jewelry and scrapbooks in the studio.

1:00 p.m. I write this month's e-mail newsletter to update customers and studio members about upcoming sales, events, programs, and recent media attention. Amy is putting together a bank loan application.

2:30 p.m. Amy sifts through catalogues to find beads, yarn, and paper products to carry. I turn to our recent survey to see if we're meeting member needs and what other benefits we should offer to increase sales. I return a call to a reporter about a story on the studio.

3:30 p.m. I run off to the copy shop to make more fliers. Amy restocks shelves with the day's shipments. I return with coffees in hand. We quickly throw around ideas for new classes and special events.

4:30 p.m. The after-work crowd starts arriving. Shoppers browse while we answer questions and encourage sales. We give tours of the studio and sell memberships to enthusiastic visitors.

5:00 p.m. A Creativity Consultant appears, and it's my night to leave "early." About once a week, this means heading off to a networking event to drum up sales and partnership opportunities. We're open six days a week, 10 a.m. until 9 p.m., and one of us is always here -- something we feel is important until the culture and processes we're implementing become institutionalized. (We're also the cheapest labor around.)

6:00 p.m. Instructors arrive. Beginning Knitting and Chandelier Earrings are both sold out. Students shop for supplies and the cash register is "cha-ching"-ing away.

6:30 p.m. Shopping madness has concluded and the students settle into classrooms. Amy starts the Creativity Consultant on tonight's project -- putting together 25 kits for tomorrow night's private jewelry-making party. Shoppers and studio visitors arrive throughout the evening.

9:00 p.m. Time for everyone to go home. Amy counts the register, puts money in the safe, batches credit-card transactions online, and closes up shop. At home, she's greeted by her husband and kisses her already sleeping three-year-old daughter goodnight. Across town, I return from an event and have a late dinner with my boyfriend.

Many small businesses are started without MBAs, but having the degree changes your perspective. Not only are you thinking in terms of one location, product, or service, you're constantly thinking bigger. All of the decisions we make and the policies we implement today will have ripple effects on how we become scalable. Having an MBA allows us to think about growth and position ourselves strategically for the future.

If we could do business school over, we would take more entrepreneurship classes. Finance, accounting, marketing, operations, and management courses laid the groundwork for successfully operating a business. Starting a business from scratch offers real-life lessons that are invaluable, like sales. Why doesn't business school teach sales?

We've learned so many lessons in this first year at Spark. That's why we refer to it as the "third and most expensive year of business school."