Tips and tricks for turning your crafty hobby into a small business
Tips and tricks for turning your crafty hobby into a small business
Turning an artistic pastime or passion into a small business can be a rewarding way to cash in on your craftiness. But hold tight your needles, brushes, yarn and beads. There is much to be done as you enter the crafting industry.
First, focus on a singular craft
One person's crafty interests can run the artistic gamut. Before beginning a small business, creators with multiple hobbies should limit their business project to just a craft or two i.e., knits, oil paintings, woodwork, etc. By restricting formal work to a single sort of craft, an aspiring business owner can hone their skills in that particular art, all the while enjoying the added benefits of keeping other interests strictly fun free-time hobbies. Eventually, these other interests can be incorporated into new products, but better to start small and grow as you go.
Carve out a niche
After you have selected a single product type to sell, work to differentiate your items from others already in the craft market. Stun customers with quality materials, product accessibility and appearance. Address an unmet need or connect with a community with which you share a passion. For example, rather than selling jewelry for the masses, consider crafting environmentally sustainable pieces for teens or fidgetable accessories for people with special needs. Pair your crafty hobby with your favorite causes and interests to create a unique, marketable product that satisfies more than just your itch for business.
Prioritize quality over quantity
A small batch of perfect products speaks volumes more than loads of imperfect ones. Consistent quality keeps customers coming. Resist the urge to rush through craft production in an effort to maximize profits. Unfavorable words and bad reviews travel fast, quicker even online. A 2018 Reviewtracker survey found that 94% of respondents had been convinced by an online review to avoid a business and 80% do not trust businesses rated below four stars. Sacrificing quality for quantity, especially at the start, could lead to a quick burst of profits only to be followed by the inevitable slump as customers drop loyalty due to faulty products.
To speed up production and build quality assurance, consider selling easily recreatable products. Crafters can create in bulk and leave any additional product customizations for later. By consistently recreating the same pattern, item or artwork, crafters can perfect their process, ultimately increasing quality and speed. But there is no need to ditch one-of-a-kind items entirely. Match a catalog of "bread and butter items" with a short list of one-of-a-kind pieces.
Consider alternative products like patterns or DIY kits
Rather than selling finished items, craftspeople looking to break into the market can produce do it yourself patterns or craft kits. Buildable kits are a lucrative, low-stakes alternative for crafters looking for a lesser commitment or way to relieve the pressure of producing finished handmade goods. Slime kits, lip balm and gloss kits, jewelry, soap and bath bomb kits have all recently seen steady interest, each peeking around the holiday season.
Register your business
At-home craft businesses have a couple business structures to choose from, each affecting the way the business is taxed and the level to which the operator is held liable. A sole proprietorship is the default business structure. If you do business activities without registering as any other sort of business, you are assumed to be a sole proprietor. In this structure, your business assets and liabilities are not made separate from that of your personal assets and liabilities. Therefore, you can be held liable for any business debts or obligations your project accrues. A common choice for crafters serious about making a buck off their creations with no risk to their personal assets is registering as an LLC, or Limited Liability Company. Here, business and personal assets and liabilities are kept separate. Other steps to consider when formalizing a small business include registering your business name and applying for an employer identification number and state tax license.
Purchase supplies wholesale
Wholesale prices, often exclusive to registered businesses, allow crafters to buy in bulk at lower prices. Wholesale items can be used to craft your own handmade products or resold for profit in craft kits and sets. Local trade shows and industry events are excellent places to network and forge relationships with wholesalers. No matter the wholesale scenario, be sure to remember the price your wholesaler sets inevitably affects the prices you set. Determine your profit-margin goals before ordering wholesale.
Set the right price
Input costs - the money put into creating a product - are not the only consideration when pricing your crafts. There are also the current market conditions: the number of competitors your product will face, the prices they charge and the market's growth rate. Not to mention product distribution costs. To start, there are many price-setting strategies ranging from pricing low to grab a quick hold of the market share, to pricing high to create an illusion of inclusivity and expense at the start only to reduce the price as more and more competitors enter the market. In general, check the typical market price for products like your own and subtract the price of the bulk goods you plan to purchase and make sure this results in a positive gross profit.
Attend craft shows
Making an appearance as an attendee or vendor at a local craft show allows budding business-people a way to look at the craft market at work in real time. Scope out the competition, check out their prices and marketing strategies. See the ways others have crafted a niche, ensured quality and sourced supplies. Objectively compare your business with that of your crafty peers and find ways to better your methods. Return to the next month's fair with a better business and booth to match.
The internet offers a wide-rage of market alternatives to your grandmother's favorite weeknight vendor fair. Internet-savvy craftspeople largely choose between popular eCommerce markets, like etsy.com, and operating under their own website. Competition on Etsy is stiff, however the site is the undeniable go-to for those looking for creative handmade goods. Operating under a personal site, though time-intensive and requiring the daunting task of drawing in customers, offers creative autonomy and freedom from any large corporation pocketing a portion of your profits. Regardless of the route you choose, keep your website mobile- and search engine-friendly.
Ensure safe transactions
Credit card and data breachers often target small businesses. Broken trust in payment security can drive potential return customers away. To ensure safe transactions, do not store customer payment data and consider investing in defensive software. Make sure that any eCommerce markets you operate under value customer security and verify every transaction.
Craft a fool-proof shipping and packaging plan
As has become a trend, there are many options to weigh when choosing how to ship your products to customers. Free shipping can be offset by higher prices for customers, or paying for shipping out of your own margins. An exclusive free shipping promotion once buyers pass a price-tag threshold can help to offset the cost a seller pays for shipping by increasing the average order size. Still, regardless of shipping method, all products must be properly packaged so as not to be compromised on the way to their new home.
Read up on consignment
Local stores may be in the market for handmade crafts to sell in their own establishment under consignment agreements. Under these contracts, your products are up for sale at retail stores. The consignee, the retail shop, agrees to pay you, the seller or consignor, a percentage of the products' profits after they sell. Any products that do not sell can be returned to you, the consignor. For many starting business crafters, this could be a viable way to grow a local following and build relationships with retailers in your area.
Turn to teaching
Instead of selling tangible items, veteran craftspeople can make a buck off their talents by imparting their experience and knowledge upon others. Community rec centers, craft stores, retirement homes and children's camps all employ craft instructors. Cash in on your experience and grow your interest in your hobby by watching others discover or foster it for the first time.
Value your visual and social brand
What reason do people have to trust your taste if your visual brand leaves more to be desired? Hone your photography skills or recruit a friend to help best frame your products for your personal site. Lean into the bustling social media landscape. Create pages and profiles on several platforms and update regularly with sneak peeks into your process and production.
Never lose the love of the craft
What point is there to crafting if not for the love of the process and, in the end, the craft? Spread crafty cheer by creating goods you are proud of and enjoy. Remember to add new craft loves to your collection and catalog along the way.