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1. Make a plan – then make it happen!
Many business owners will say the key is in the planning and a craft business is no different. It’s quite common for crafters to develop a business out of their hobby and move quite naturally to selling, without really making a plan for how they are going to run the business. It is crucial to make a business plan, this will not only help with ensuring that your business meets all your obligations such as paying tax, insurance and meeting the needs of customers, but will also make sure that financially the business is viable. It will enable you to make a profit and sustain this year on year to support you and the needs of your business.
2. Keep things strictly business
Remember that a craft business is not a hobby. Keep things strictly business. This means you need to keep a record of everything you spend and every sale you make. You will need to produce yearly accounts and keep track of your money. You will also need to watch your costs and only spend on things you can justify as ‘ making money for the business’ which may mean passing up on buying those stunning beads that will never go with anything, but you just have to have!
3. Remember it’s visual – professional pictures are worth it!
One of the best pieces of advice I could give to any craft business is to invest in professional quality photographs. This is one area that you don’t want to scrimp on. You are running a business based on selling items and visual pieces, particularly if you are selling online, and your images are all your customers have to go on, so make them perfect! If you do want to take your own photos, then you will need to buy the relevant equipment and practice until you are producing professional quality images. There is nothing worse than spending all your time making beautiful pieces only for the pictures to let them down and not show them in the best light.
4. Know your market and engage them
Think long and hard about who your customer is and how to engage them. Where do they shop? What magazines do they buy? Do they go on the internet, if so what sites? This will require plenty of market research which can be time-consuming but is well worth it for your business. Once you have identified your target audience and know where to reach them, you need to think about why they would be interested in you. What is your USP – Unique Selling Point? What is special or different about the craft you are offering in relation to the rest that is available? Then, when you have your marketing message and target audience, all that is left is for you to do the actual promotional work of getting your message out there.
5. Absorb, adopt and adapt
Contrary to what you may think the craft market changes quite rapidly, especially if you are involved in a craft which follows fashion, such as jewellery making or knitting. For this reason you need to make sure that both your craft and the business as a whole is responsive to change; that you are able to keep on top of what is happening in your industry and the business climate. Absorb the information, adopt new approaches and adapt to change. Being flexible in business can mean the difference between success and failure.
6. Allocate time for the ‘business stuff’
Crafters and arts-based small business owners are notorious haters of the dreaded ‘business stuff’ but is absolutely essential for the success and smooth running of your business. I would say that you need to allocate at least as much time for promoting, admin and finance of your business, as you spend making your beautiful handmade craft items. If you really can’t stomach it then you may consider teaming up with a business partner who can help with this aspect of your work. Although I also find that many crafters grow to like the different aspects of their business, as it offers a nice variety and being involved in all facets of your company means that you have a greater understanding of your customer, finances and how the business is going.
7. Get your pricing right
It is easier said than done but is very important for craft based businesses to get the correct pricing structure in place. There are a variety of different formulas that can be used to work out the price of handmade items, such as adding up all your material costs, adding an hourly makers fee and doubling this to find your RRP. However you choose to price your pieces, you need to have your customer in mind, be aware of the market and how much others are charging for similar items. Consider all the costs involved in making, as well as your overheads for making a sale. Be consistent with your pricing, offer pieces for a range of prices to suit different budgets and don’t be afraid to change and adapt your pricing formulas as variables change.
8. Look after the pennies
This is a simple but effective one, look after the pennies, don’t spend on something unless it’s a business requirement and can be justified as the best option for your business. Try to allocate reliable and affordable wholesalers for your materials so that you are not overspending on your raw materials. That said, you want quality, so money does have to be invested – just ensure it is the best deal you can find. Remember that every penny adds up and the more you save the more will hopefully be left over as profit.
9. Give it time (and hard work)
If we are being realistic, most businesses take 2-3 years to break-even let alone turn a reasonable sized profit. There are so many times that people have an excellent idea for a craft business but only allow themselves 6 months to a year to make a profit big enough to live on. They give up too soon because they haven’t managed to get there yet. Give yourself time, if necessary stay at your job until you have made enough to justify leaving. Work your socks off and take lots of business advice, then with any luck you should have a beautiful and thriving craft business a few years down the line.
10. Invest in your training – it’s an investment for life.
Last but not least, I would always encourage any crafter or business owner to invest in their skills and training. Whether it be attending courses to develop your craft skills and keep your ideas fresh, or attending business skills workshops in areas that you have identified as a weakness, it all adds up and no matter what happens with your business, this knowledge will stay with you for life.
What do you think about running a craft business? Do you have any additional tips to add? Or perhaps you have a question about some of the areas raised, if so pop a comment below and let us know your thoughts.
Good luck in business and happy crafting!
Jessica Rose, London Jewellery School