For crafters, the business possibilities can seem nearly endless. There are countless types of craftspeople who can sell homemade goods to earn a bit of side money as a part-time job or build up toward running a full-time business. Whether you excel at sewing and want to use your skills to make home decor or you specialize in creating one-of-a-kind birdhouses, you can create a craft business that fits your special skill set.
When you set out to start a new business, it's important to understand the steps that go into outlining your business plan, creating your business, and finding customers. Whether your goal is to create a small online craft business or build a brick-and-mortar store, taking time to prepare will give you the best chances for success.
Here's what you need to know about creating your profitable business.
Honing the Skills You Need for Your Craft Business
With any type of craftsmanship, the importance of nurturing your skill development should not be understated. You want to exceed customers' expectations when they buy your products. This helps nurture brand loyalty and encourages people to spread positive words about you and your creations.
Even if you have been crafting for years, selling your creations requires sitting down and critiquing your work. If possible, see if someone else who knows your specialty can offer some feedback on the final product and how you can hone your crafting skills. One of the best means to improve your crafting skills is to work with a mentor or master craftsman.
Aside from these learning opportunities, another way to improve lies with practice. Creating examples of your products before launching your business will allow you to practice your skills so you're ready to create professional-grade crafts when your first orders roll in.
Determine Where to Focus Your Craft Business
As you prepare to set up your craft business, keep in mind that you will need to begin by aligning market demand with your preferred crafting outlet. You likely have a particular type of crafting area where you excel, such as:
- Sewing
- Woodworking
- Clay creations
- Household decor
- Painting
To make sure your products sell, you'll need to create a strong overlap between the areas in which you want to work and the products that customers want to buy. Therefore, some market research will be needed to learn more about the types of handmade items people appreciate. You can use sites like Etsy or speak to people at craft fairs to determine what buyers want from experts like you. This will help you select product lines within your crafting specialty to sell. For example, if you want to sew, you might find that people appreciate customized aprons or doll dresses.
Figure Out Your Pricing
Once you know the types of products you want to sell, you will also want to determine your prices. To calculate your prices, take into account information like:
- How much you spend on the raw materials to create your products
- How much overhead your business has (e.g., the cost of your crafting equipment, rent for a separate work building, and/or the cost of insurance)
- The market value for the products (see the price points at which other crafters successfully sell similar products)
- How much time it takes you to create the product
This data can help you set your initial prices. As you begin to sell your crafts, however, you might find that you need to adjust as you get a better feel for the market. For example, if your products gain a reputation for superior quality and sell very quickly, you might be able to increase your prices. On the other hand, if you set your prices over that of competitors and struggle to move products, you might want to lower your prices and find a way to reduce some of the expenses that go into creating them.
Create Your Business Plan
This information you have just put together - your market research, the products you plan to sell, and your pricing - will form the basis of your business plan. Keep your business plan with you. It will help you understand your path forward and give you something to reference as you work toward building your business. It will also prove valuable if you decide to apply for small business loans or other forms of financing in the future. Many lenders will want to review your business plan. Once you have your business plan, the time has come to begin creating your business.
Establishing Your Craft Business
Armed with your business plan, there are now steps you can take to set up your business as an entity. It's important to remember that this process plays an important role in your tax responsibilities as a business owner. If you do not have any background in accounting, it can be a good idea to work with a small business accountant who can help you understand the tax implications of your business and the revenue you generate so that you can make sure you stay on top of your taxes.
Set Yourself Apart
As you begin to establish your business, remember the importance of setting yourself apart. You'll want to create a business that customers will remember so that they can return to you when they want to buy something else. To avoid becoming an anonymous crafter, pay attention to the business name and the logo you create.
Your business name needs to be unique. Search with your local government to verify that your selection has not been chosen by someone else and verify that the domain name of the selected name of your startup is available so that you can begin branding online.
Then, create a logo that captures your particular type of craft and the products you make. If you design custom wood cabinets, for example, incorporating elements of cabinet design into your logo can make it easier for customers to understand what you sell. Place this logo prominently on your business cards and hand them out at craft shows or other in-person events.
Although crafters generally consider themselves to be creative people, you might not feel confident creating a logo or might just not have the time. If that describes you, consider hiring freelancers on a platform like Upwork or Fiverr to help you.
Determine Your Business Structure and Regulations
You also need to give your specific business structure careful thought and consideration. Many small crafting businesses, generally without any employees, will elect to become sole proprietorships or limited liability companies (LLC). However, you also have options like becoming a partnership or corporation.
You will want to review the tax benefits and implications of each of these options and research how they will impact your business organization and regulations so you can make the best decision for your company.
Once you know how you want your business to be organized, you can create some rules that will help you govern your business. You will need to submit these rules, along with your business name and completed business plan, to the government to officially create your business.
Open Your Business Bank Account
Once you have officially become a legal business, bring your business information to your preferred bank and open a bank account. A business bank account can make it significantly easier for you to keep your finances separate between your business and you. Maintaining separate finances will help you:
- Organize your records for taxes
- Build credit for the business that's separate from your personal credit
- Understand your revenue and expenses for the business for better planning
Create a Website
You will also need to create a professional website to help your business get discovered in online searches. Your website should contain photos of the type of crafts you sell so potential customers can preview what they might buy. You can even include an online store where people can order their products right from your site.
The design and text should also be written professionally to help inspire confidence in the eyes of your customers. If you do not know how or do not have the time to create a high-quality website, then working with freelancers can again help you achieve your goals.
Attract Customers
Finally, it is time to attract your customers:
- Optimize your website so it will appear in searches for your type of crafts. Develop quality content about your crafts and take excellent pictures of your products to attract visitors.
- Create social media profiles to engage with your target audience, discuss your crafts, and promote yourself as an expert. Social media marketing can play an important role in your marketing strategy, helping customers find your new products and connecting others with your craft store.
- Pay attention to crafting sites like Etsy. If you want to sell online, create a profile and fill it out completely.
- In addition to crafting sites, build profiles on e-commerce sites like Amazon and eBay to sell your products.
- Claim your profile on Google My Business and add any pertinent information and images.
- Let happy customers know you always appreciate referrals to others who might want similar products.
Remember the Daily Responsibilities
Running a successful business does require more work than only crafting. You'll also have responsibilities related to the finances of your business.
Follow Up on Quotes and Invoices
When someone asks you about the price for a custom-made item, you likely provided them with a quote regarding how much it would cost for the final product. Keep an active list of your open quotes and have a plan for following up, such as contacting them again after three to five days. Fortunately, Skynova makes it easy for busy business owners like you to create quotes, track them, and know when to follow up.
Similarly, you'll also want to track your invoices. Know which ones have been paid and what is still outstanding to avoid missing payments. By helping business owners with the development and issuing of invoices, Skynova makes it easy to track payments so that you know when to follow up.
Track Your Business Expenses
Finally, you need to make sure that you track all expenses related to your business. This includes:
- Any liability or other business insurance you buy
- Your rent on any special craftspace
- The cost of raw materials
- Any specialized equipment you need to invest in
- The cost of shipping your crafts to customers
Entering all of your receipts and expenses into Skynova's accounting software can help you have the most accurate picture possible of your business revenue compared to costs. This will help you gauge your business's success and know when to invest in its growth.
Get Ready to Sell Crafts With Skynova
Building a successful craft business is an exciting time. Putting your passion to work and creating items that others love can provide a very rewarding career. Reviewing these steps and equipping yourself with small business software from Skynova can help the entire process go easier.
Skynova can help you manage the financial aspect of your business quickly and easily so that you can focus more time and energy on doing what you love. See how convenient it is to create invoices and quotes and track your expenses from a single platform.