June 26, 2014
By Hope Belli Tinney, WSU SBDC
POULSBO, Wash. – The picturesque town of Poulsbo on the shore of Liberty Bay is bustling this time of year, and Bluewater Artworks is smack in the middle of it all with a full schedule of artist receptions, artist talks, live demonstrations and musical performances.
|Bluewater Artworks owners, |
Russ and Christy Camerer opened Bluewater Artworks in January 2012 not because they had a burning desire to be small business owners, but because they saw an opportunity to put their talents, skills and tens of thousands of dollars of high-end framing equipment to good use.
Christy is an artist and expert framer and Russ is a gregarious salesman. Together they planned to create a beautiful and vibrant gallery space in downtown Poulsbo where they could showcase works by western Washington artists and offer framing services.
A successful start
A year in, things seemed to be going OK. Beautiful gallery? Check. Growing clientele for their state-of-the-art framing services? Check. Active engagement in both the downtown Poulsbo business community and western Washington artists’ community? Check and check.
Poulsbo Mayor Becky Erickson said she’s thrilled the Camerers chose to open their gallery in Poulsbo and at one of the most visible locations in town.
“The space that they’re in had been vacant for several years and it was in terrible shape,” she said, but it has now become a community asset.
“What they’ve created in that space is a wonderful addition to our downtown,” she said, and it has helped elevate other businesses in the area.
Advisor steps in to help
But then it all came crashing down. In early 2013 a thin envelope arrived from the state Department of Revenue informing them that they were behind on sales tax payments and owed $26,000, due immediately.
With the 1,001 details involved in running their business, somehow the sales tax issue had fallen through the cracks. Their original bookkeeper had made some critical mistakes, but the state had also erred in not setting them up with quarterly payments, as they had twice requested.
At that point, Russ said, they feared their grand adventure in small business ownership was over. Before throwing in the towel, though, they called the Washington Small Business Development Center (SBDC) in Port Townsend and spoke with Elaine Jones, an SBDC certified business advisor.
The Washington SBDC is a network of more than two dozen small business advisors who provide confidential, one-to-one advising at no charge for small business owners who want to start, grow or transition their business. The Washington SBDC receives support from Washington State University, the U.S. Small Business Administration and other institutions of economic development and higher education.
Managing cash flow, reducing expenses
It looked bad, Jones agreed, but it wasn’t over. She helped them come up with a short list of elected officials and a couple names of people at the Department of Revenue who might be able to help. She also helped them write up succinct talking points to explain how they got behind in their payments and how they planned to get caught up.
The key point, she said, was that the Camerers were new business owners running a viable business that was helping to build a strong downtown in Poulsbo. They simply could not pay the back taxes and penalty without going bankrupt. Instead, they opened their books to the state to show what they could pay and still stay in business.
In the end, the Department of Revenue waived the $10,000 penalty and agreed to a repayment schedule the Camerers could live with.
Though the tax bill was the immediate problem, Jones began meeting with the Camerers to help them make adjustments to their business systems in other areas as well. Managing cash flow during the slow months was one area, reducing their expenses was another.
Artists learning to do business
When Jones noticed that the Camerers were paying more in rent than was typical for their business or that location, she called in another SBDC advisor, Steve Burke, who has a background in commercial lease negotiations.
With Burke’s coaching, the Camerers went back to their landlord to ask for a rent reduction. “After we got our ducks in a row, it worked,” Russ said. “We went in with all the numbers to show her.”
“Christy and Russ are artists who are learning to be business people,” Jones said. “The learning curve has been huge, but what their gallery adds to downtown Poulsbo is also huge. If Bluewater Artworks had closed it would have been a loss for everyone.”
Vision comes into focus
That Bluewater Artworks is open at all is a testament to Christy’s vision and perseverance and Russ’ willingness to take a leap of faith.
In 2011 Christy was working at a frame shop in Gig Harbor while also building a home-based framing business of her own. When not framing other people’s art, Christy was creating and marketing her own intricate pencil drawings. She often helped fellow artists with marketing as well.
When the owner of the shop where Christy had been working decided to close and offered Christy state-of-the-art framing equipment in lieu of back wages, a long simmering dream began to take shape.
If she could get Russ on board, she was sure they could make a go of an art gallery/framing shop.
More than 100 artists
At the time, Russ was the service and parts manager at a boat manufacturing company. He enjoyed customer service and knew the business from top to bottom. He was already working 50 hours a week; Christy asked, wouldn’t he rather be working those long hours on a business they owned?
It was a stretch, but angel investors came up with the $40,000 needed to set up shop in a prime location on Front Street. They now work with more than 100 different artists from around western Washington.
After losing money in 2012, they are exceeding projections and the future looks bright. They have five employees and are looking at two-year revenues of about $700,000. Since the art gallery works on 40 percent commission, 60 percent of sales go back to the artists they work with.
The Camerers aren’t getting rich, but that was never their intention. They are doing well enough to dream of opening a satellite gallery where more artists can show their work.
“My wife and I are not business people,” Russ said, but they are learning.
Fortunately their business advisor is only a phone call away, and her services are free.
“The SBDC has really been a lot of help,” Russ said.
For more about Bluewater Artworks, seehttps://www.facebook.com/pages/Bluewater-Artworks-Gallery-Framing/173424572719357.