Non-profit Makerspace in Myrtle Beach South Carolina

This work protected under Creative Commons CC-BY-NC-ND-4.0 license.

Michelle Folkman

Introduction

The creation of makerspaces is an emerging trend in many communities. A

makerspace may go by different names, but it is a place where people engage in

making things of all sorts, from simple to complex. Typically tech centric with an

assortment of tools and equipment, a makerspace is a place of creation.

A makerspace is proposed to be located in Horry County SC. The space will

serve all of Horry County, SC, and will be located in a central location convenient

to a number of roads. It will offer classes in making of diverse kinds, as well as

workspace rental. Growth in the fine arts schools market is a major predictor of

the growth of this industry, as is growth in the arts and crafts market.

Makerspace Market Demographics

According to a study conducted jointly by Make Magazine and Intel, makers

are most often high earning, with a median household income of $106,000. The

median age is 44. They are a well-educated group with 97% having attended or

graduated from college; 80% say they have post-graduate education and over

four in ten hold post-graduate degrees (Make, 2014). One successful

makerspace that served as a model for this project is the Artisan’s Asylum in

Somerville, MA. According to the US Census, that city of 77,104 has a per capita

income of $33,352 and a median income $64,603. (US Census, 2012d).

Market Area Demographics

The proposed makerspace will be located in Myrtle Beach, South Carolina. It

is intended to serve all of Horry County, SC. According to US Census, the

population of Horry County SC is estimated to be 279,826 (US Census, 2012b).

42,277 individuals have a bachelor’s degree or better. The per capita income is

$22,994 and the median household income is $40,353. There are 25,220

households that earn $75,000 or more (US Census, 2012c). A significant

demographic factor affecting this market is the number of visitors. According to

the Statistical abstract for the Myrtle Beach area of South Carolina. 23rd ed.,

Myrtle Beach, also known as The Grand Strand, is a major tourist destination that

attracted 15.2 million visitors in 2012. 62% of those were families. 37% were

middle to high income and have an average household income of $75,000 or

more. Each visitor spends an average of $121 dollars a day (Marketing, 2014).

Market Trends

In the past few years, thought the trend is older than that, the creation of a

makerspace has become a topic of interest to many communities. While they

may go by different names, such as hackerspace, fab lab, community workshop

a makerspace is a place where people go to make things – all kinds of things,

from clothing to robots. The offerings of the facilities vary, but they are typically

tech centric. A makerspace may have a 3D printer, sewing machines, laser

scanners, computers, electronics, welding equipment, prototyping equipment,

glass blowing, pottery – it runs the gamut. The point is it is a place of creation.

According to Entrepreneur magazine, the maker movement “took hold in

California’s geek heavy communities…and has grown into an international

phenomenon” (Moran, 2013). The article asserts that making is “showing signs of

true financial power” as “kit makers (suppliers) are making millions…and

Etsy.com, where many a maker sells his or her work is been valued at $300

million” (Moran). Other trends include Autodesk (major design software

manufacturer) purchase of Instructables.com, the online DIY instruction

repository, and the growing demands of STEM and STEAM education (Moran).

Another pertinent trend is people who travel specifically to participate in some

kind of educational experience. The 2013-2014 Travel and tourism market

handbook states, “About one-fifth of adults, or over 30 million adults have taken

an educational trip to learn or improve a skill, sport or hobby in the past three

years” (Miller, 2011).

Related trends can be found within the arts and crafts market. According to The

arts and crafts consumer – US report, the number of consumers participating in

arts and crafts activities has increased over the last five years. It also states that

“many with basic skills are crafting so they can learn something new” (O’Donnell,

2014) and recommends “Considering that less than one in five consumers

surveyed who make arts and crafts describe their skills as advanced, there is a

large untapped audience of consumers with basic skills who are looking to learn”

(O’Donnell).

Industry Makeup and Growth

For the purposes of this research, it was determined that the industry segment

that best described this type of entity is that of Fine Arts Schools, which

“compromises establishments primarily engaged in offering instruction in the arts”

(US Census, 2012a).

Due to people cutting back on non-essential spending, Fine Arts Schools

revenue growth slowed during the economic downturn, but that trend is reversing

as “disposable income levels rise and the stock markets improve… in

2013…revenue is expected to increase 3.2% to 3.5 billion in 2013. Over the next

five years, revenue is forecast to increase 3.3% annually on average, reaching

$4.1 billion in 2018” (Lerman, 2013). The industry is expected to grow faster than

the economy until 2018, which indicates it is a growth phase.

Seniors make up 8% of the market and their share is growing as the US

population ages. The National Guild is actively working to address this market

and this group “is therefore a potentially large market for this industry” (Lerman).

Industry Financials

A search of a industry market report for Visual Arts Instruction for the State of

South Carolina showed that there are 31 establishments in the state. The

cessation rate is around 33%. The firms generated “industry sales of $4,710,090.

Average annual site sales are $212,277” (BizMiner 2013). Another report for the

closest specific market, Charleston, SC, showed nine establishments, up from 8

the previous years, with average annual sales of $216,221 in quarter two of 2013

(Bizminer, 2014).

Source: BizMiner. (2014, March). Industry financial profile (5 year): [611610.01]

An examination of the IRS Form 990: Return of organization exempt from

income tax for the model example, Artisan’s Asylum, revealed earnings of

$227,837 in year 2011. $136,132 of that came from membership dues and fees,

$6000 came from fundraising, $85,705 came from grants, and $45,000 came

from noncash contributions (possibly equipment donations. It is common for

makerspaces to take contributions of equipment). This document also indicates

that Artisan’s Asylum took in $149,259 through educational programs, for total

revenue of $464,555 (Internal Revenue Service, 2012).

Spending Patterns

An examination of spending patterns in relevant areas such as contributions

to non-profits, purchases of computers, and fees for recreational lessons

revealed that in the second quarter of 2013 in Horry County, SC, average

household expenditure on cash contributions to charities, church, religious,

educational, political and other organizations were $862.25. Average household

expenditure on computers and computer hardware (non-business) was $142.81

Average household spending on fees for recreational lessons was $48.78

(DemographicsNow, 2014a). In contrast, expenditure in the same areas for the

US as a whole were respectively $965.26, $159.16 and $81.87

(DemographicsNow, 2014b). This lower expenditure in Horry County seems to

be in keeping with a lower household expenditure overall which was $44,222 in

Horry County (DemographicsNow, 2014a). US average was $51,428

(DemographicsNow, 2014b).

Geographic research revealed spending patterns and also psychographic data

by census tracts, which may be has the added benefit of being helpful when

deciding on a location.

Source:Geographic Research. (2014a). Fees for Recreational Lessons.

Mediamark data retrieved April 1, 2014, from http://www.simplymap.com/

Source: Geographic Research. (2014b). Toys, games,arts and crafts and tricycles spending.

Mediamark data retrieved April 1, 2014, from http://www.simplymap.com/

Source: Geographic Research. (2014c). Households Visiting Web Sites – PBS.org Mediamark

data retrieved April 1, 2014, from http://www.simplymap.com/

While studying these maps, one small census tract, 45051070200, in Conway

SC, drew the researchers attention as having potential as a location for the

makerspace. The spending in relevant items is high and it is located at the

intersection of a number of roads. There are approximately 3071 individuals in

this census tract. 49.6% of the population has a bachelor’s degree or higher, and

28% earn over $75,000 per year (DemographicsNow, 2014c). An examination of

the area in Google maps revealed that the area has a country club right in the

middle of it, which may serve as a focal point and chief attraction for high earners.

This researcher concludes that it seems likely that the inhabitants of census track

45051070200 might very well be customers of the makerspace. However, it

became apparent that the 12 mile distance from Myrtle Beach would likely be a

deterrent to getting tourist participation, so something in between the two cities

would most likely be a superior location.

Competition

Competitive analysis showed that there were 36 direct competitors in Horry

County SC. Most are part of the arts and crafts market, and ten are branches of

publicly traded big box retailers who offer classes, such as Michael’s and AC

Moore (Mergent, 2014a). While they may offer classes, they tend to be of a

limited type and size. The data for these competitors is contained below.

Source: Mergent Intellect. (2014a). Horry County, SC, SIC code, 611610. Retrieved April 10,

2014 from http://www.mergentonline.com

Indirect competition is far more of a factor in Horry County, SC. There are a

great many attractions and distractions to attract the time and money of the

consumer, especially in Myrtle Beach. To provide an example, a search for

bowling, miniature golf, and surfing lessons revealed 29 indirect competitors

(Mergent, 2014b). When you take into account activities like shopping, theater

going and eating out, it’s hard to determine what type of business isn’t a

competitor. An excellent marketing campaign will undoubtedly be the most

effective way to combat this challenge. The data for the 29 indirect competitors is

contained below.

Source: Mergent Intellect. (2014b). Horry County, SC, SIC codes 594501, 79991101, 829901,

84120102. Retrieved April 10, 2014 from http://www.mergentonline.com

The most direct example of a competitor in Horry County, SC is an art gallery,

Art and Soul, which offers visual arts instruction. In 2013 this establishment had

an annual sales volume of $110,000 (Mergent, 2014c). Art and Soul offers a

dozen different classes, at a cost of $20 to $30 per class (Art, 2014). This

benchmark is useful when determining class cost for the makerspace.

The Myrtle Beach makerspace’s competitive advantage will arise from the

diversity and character of the classes and from the facility. Our intention is to

offer classes not found elsewhere along with a wide-ranging assortment of tools

and spaces to work in. Our goal is to ensure that the customers are both

educated and entertained, and find enrichment through the act of making.

Bibilography and Works Cited

Art and Soul class fees. (2014). Retrieved from

http://www.artandsoulmyrtlebeach.com/artclasses.html

BizMiner. (2014a, March). Industry financial profile (5 year): [611610.01] Visual

arts instruction: Charleston-North Charleston SC; sales class: industry

wide. Retrieved March 22, 2014 from https://www.bizminer.com/

BizMiner. (2013b, Dec). Industry market report: [611610.01] Visual

arts instruction; State of South Carolina. Retrieved March 22, 2014

from https://www.bizminer.com/

Cavalcanti, Gui. (June 4 2013) Making makerspaces: creating a business model.

[Blog post]. Retrieved April 10, 2014 from

http://makezine.com/2013/06/04/making-makerspaces-creating-a-

business-model/MAKE

DemographicsNow. (2014a). Consumer expenditure for Horry County, SC.

Retrieved April 13, 2014 from http://library.demographicsnow.com/

DemographicsNow. (2014b). Consumer expenditure for the US. Retrieved April

13, 2014 from http://library.demographicsnow.com/

DemographicsNow. (2014c). Demographic detail summary: geography census

tract 45051070200. Retrieved April 18, 2014

from http://library.demographicsnow.com/

Geographic Research. (2014a). Fees for recreational lessons, Horry County, SC.

Mediamark data retrieved April 1, 2014, from http://www.simplymap.com/

Geographic Research. (2014b). Spending, toys, games and crafts, Horry County,

SC. Mediamark data retrieved April 1, 2014, from

http://www.simplymap.com/

Geographic Research. (2014c). Number of households visiting PBS.org, Horry

County, SC. Mediamark data retrieved April 1, 2014, from

http://www.simplymap.com/

Internal Revenue Service. (2012). Form 990: Return of organization exempt from

income tax For Artisan’s Asylum. Retrieved from

http://www2.guidestar.org/organizations/27-2604571/artisans-asylum.aspx

Lerman, S. (2013, August). Fine arts schools in the US. Retrieved from

http://www.ibisworld.com/

Make / Intel. (2013) Maker market study: An in-depth profile.

Retrieved from http://cdn.makezine.com/make/bootstrap/img/etc/Maker-Market-

Study.pdf.

Marketing Research Department (2014, Feb.). Statistical abstract for the Myrtle

Beach area of South Carolina. 23rd ed. Retrieved March 31, 2014 from

http://www.myrtlebeachareachamber.com/research/statistical_abstract.ht

ml

Mergent Intellect. (2014a). Horry County, SC, SIC 611610. Retrieved April 10,

2014 from http://www.mergentonline.com

Mergent Intellect. (2014b). Horry County, SC, SIC codes 594501, 79991101,

829901, 84120102. Retrieved April 10, 2014 from

http://www.mergentonline.com

Mergent Intellect. (2014c). Art and Soul. Retrieved April 10, 2014 from

http://www.mergentonline.com

Miller, R. K., Washington, K. D. (2013). Chapter 1: market assessment. The

2013-2014 travel & tourism market research handbook. Retrieved from the

Small Business Center database.

Moran, G. (2011). Hands on. Entrepreneur, 39(11), 62-63. Retrieved from

http://eds.b.ebscohost.com/

O’Donnel, F. (2014). The arts and crafts consumer - US. Retrieved from

http://academic.mintel.com/

U.S. Census Bureau. (2012a). 2012 NAICS definitions: 61161, fine arts

instruction. Retrieved from http://www.census.gov/eos/www/naics/

U.S. Census Bureau. (2012b). Horry County, South Carolina QuickFacts [Table].

Retrieved from http://quickfacts.census.gov/

U.S. Census Bureau. (2012c). Horry County, South Carolina Selected Economic

Characteristics [Table]. Retrieved from http://factfinder2.census.gov/

U.S. Census Bureau. (2012d). Somerville, Massachusets QuickFacts [Table].

Retrieved from http://quickfacts.census.gov/