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MORE THAN 1 STRING: Jeremy Chapman, left, Gene Hoke and John Chapman led The Acoustic Shoppe LLC to $259,000 in 2015 revenue.
MORE THAN 1 STRING: Jeremy Chapman, left, Gene Hoke and John Chapman led The Acoustic Shoppe LLC to $259,000 in 2015 revenue.

Business Spotlight: Notes of Opportunity

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Brothers John, Jeremy and Jason Chapman have far more experience reading sheet music than business ledgers.

Though the reputation earned by 28 years touring as The Chapmans bluegrass band made their startup road easier, they’ve figured out the business side of their music store as they go.

A $5,000 investment three years ago to open The Acoustic Shoppe has led to $217,000 in sales this year on pace for an annual projection of nearly $300,000. But the real music to their ears: The store has never operated in the red.

“Acoustics is a smaller part of the industry,” Jeremy Chapman says of the strategic niche. “We focused on what we know.”

The Acoustic Shoppe strictly sells acoustic instruments and gives playing lessons.

About half of business is in instrument sales, while a fourth each is in lessons/studio fees and repairs.

Lesson in business
At the store, customer Michael Meyers plays the fiddle for Jeremy and his 6-month-old son, Grayson, who smiles with approval. Meyers is working the kinks out of some pieces for an out-of-state fiddle competition.

Musicians are in and out testing instruments for purchase, dropping off guitars for resale, and there’s even a jam band of kids meeting weekly in the cramped showroom.

Guitar, voice, mandolin and fiddle lessons are taught in the five studio spaces. It is a hub of activity and camaraderie where “these strings” and “that key” easily are overheard.

The brothers have taught music lessons in the area for over 10 years, and a significant number of those lessons were taught at a shop called High Strung, which closed late 2012.

They discussed the issue with longtime friend Gene Hoke and saw opportunity in the face of inconvenience: They took over the lease of the building. Hoke, a builder who operates Hokeworks Construction, agreed to renovate the building under a partnership agreement with the brothers.

Hoke also planned to absorb any expenses on months The Acoustic Shoppe fell short, but he’s never had to break out his checkbook.

The brothers’ $5,000 investment funded original inventory, displays, rent and overhead.
 
The limited funds meant they consigned instruments for musician friends seeking to sell and even displayed their own instruments – that weren’t actually for sale – on the walls just to make the space appear full.

The store placed among the Top 100 musical instrument and product retailers by the National Association of Music Merchants the last two years and more recently it’s been named the largest dealer of Eastman handcrafted guitars and mandolins in the Midwest.

Reinvesting profits
The brothers didn’t take out a commercial loan until purchasing the 1913 E. Seminole St. building in 2014.

Another key to their plan: The partners aren’t touching any profits for the first three years, in order to dedicate further investment in the business.

One new area is online sales.

Three months ago, The Acoustic Shoppe rolled out a pilot program through Rain Retail Software.

“They set us up with a brand new system that actually ties our retail space and our inventory directly into our online sales,” John says. “Everything that gets put into our retail space, it gives us the option to automatically put it directly on the web. It also gives our inventory control numbers.”

While the technological transition is inevitable, the brothers recognize selling musical instruments online – particularly of the high-end variety – is delicate business.

“Each piece of wood, when they cut that tree just the next slice over is going to be a little different density,” Jeremy says. “One guitar to the next, they can sound completely different. Instruments are kind of a risky thing to buy online, you almost need to play it to make sure it sounds as good as it looks.”

To handle that obstacle, the brothers film demos of instruments for sale, so shoppers can hear the tone. There is also a 14-day return policy. The Chapmans predict as much as 30 percent of future sales could come from the web.

As the store’s only employees – outside of teachers who rent studio space – the Chapmans and Hoke plan to hire their first employees.

Personal time has been their main cost from entrepreneurship. Many nights, their families are asleep when they get home, and they eat dinner alone at 9 or 10 o’clock.

The store also is outgrowing the space for lessons and its $90,000 in unique inventory.

“We have to keep this building at 50 percent humidity all the time, so I put a whole system into the air conditioner that shoots steam into the ductwork,” Hoke says.  

A specialized cedar room houses vintage instruments, including a mandola that recently sold for $90,000.

The owners honor the instruments – careful to point out the artistry and detail of certain pieces.

“The cool thing about instruments is that a new instrument – they almost develop as you develop as a musician,” Jeremy says. “The instrument is changing along with you; as you improve, the instrument is improving. It’s kind of a cool connection.”

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