Starting an Arts & Crafts Business Think all you need to know is how to knit or paint? Not quite. If you want to start a serious crafts business, you'll have to focus on the business <I>and</I> the craft.
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It's a common fantasy, and why shouldn't it be? Itsounds amazing: Instead of forcing your crafting time into nookshere and there--after dinner, before the kids wake up, on theweekends--you'll start a business so you eat, sleep, breatheand, most important, live off your hobby.
But such is life that nothing is as easy as it seems. You mayhave the skills to create wonderful handiwork, but starting asuccessful crafts business calls for much more than that."[There's] a separation [between] those who are craftingfor fun and extra money and those who start out with the idea,'I intend to make money from this, so I'm going to do itright,'" says Barbara Brabec, a homebased business expert andauthor of Make It Profitable! "And I'vealways said in all my books that the people who succeed are thosewho have a financial reason to do so."
So here's your first step: Decide why you're reallystarting this business. "If you're doing it for love orextra money, that's fine--you can have a lot of fun. You canmake enough to keep yourself in craft supplies for the rest of yourlife, but you're never gonna bring home the groceries,"says Brabec. "If you're in it because you actually need tosupplement your family income, then you need to getserious."
And what does getting serious entail? Read on to find out how toget started.
Start reading. You don't necessarily need an MBA tosucceed in a crafts business, but knowing how to wield a meanneedle isn't enough. "It's not necessary to have abusiness background, but if you don't have one, [it is]necessary to read up," says Susan Brandt of the Hobby IndustryAssociation, which counts crafts manufacturers, publishers,distributors and retailers among its members.
Brandt suggests visiting your library to find business magazinesand texts as well as checking out community resources like adultschool classes. "If you can visit some large gift centers ormarkets, try to find people who'd be willing to talk to youfrom noncompetitive areas," adds Brandt. "There are a lotof very generous people who remember that somebody helped them whenthey started."
10 Steps to Startup
- Find out about zoning regulations, licenses and permits.
- Acquaint yourself with IRS regulations.
- Register the name of your crafts business with localofficials.
- Call your telephone company.
- Open a checking account for your business.
- Obtain a retailer's occupation tax registrationnumber.
- Learn about federal regulations applicable to your craftsbusiness.
- Set up a good record-keeping system.
- Make sure you're properly insured.
- Decide which printed materials you need in order to do aneffective promotional and selling job.
Source:Handmade for Profit (M. Evans & Co.)by Barbara Brabec
Researching Your Marketing, Prices and Sales Outlets
Research your market. Your friends and family may gushover your work and even fork over $15 for an item, but will others?This is where market research is imperative; don't assumethere's a market for your handcrafted wares until you find it.Go to crafts fairs, scour the Internet, read trade publications,and again, talk to other crafters to see what their experience hasbeen.
There are several reasons to thoroughly research your market: todetermine your competition, to find the best outlets for yourproducts and to see whether your products will sell. For example,research your local craft malls, and you may find--as Brabechas--that their popularity isn't what it once was because ofcompetition from imported and sometimes sub-par merchandise. Andthis is exactly the type of thing you want to avoid. "Thereality is that in order to be successful, you need to have anunusual product that isn't likely to have a competing productmade by a machine," says Brandt. "You need to havesomething that you can make quickly but that isn't apparent oreasy for someone else to make or copy."
Jenny Hart has hit upon just such a product with herhand-embroidered portraits that she sells via her website and YardDog Gallery in Austin, Texas. An exhibited artist since age 17,Hart originally got the idea to embroider images about seven yearsago after seeing embroidery work done by a psychiatric patient."My approach to [my business] has been a little differentsince my product is currently available [only] by commission,"says Hart, who began her "pretty barebones operation"just five months ago by coding her own site at www.sublimestitching.com.
In her research, Hart didn't find anyone doing similar workonline. "My next step was to figure out who would beinterested in my work," says Hart. She then e-mailed hundredsof webmasters with related sites (vintage fabric, retro-themed,embroidery, etc.) to request link exchanges and spread theword.
Fast Fact
Craftspeople who have employees generally have higher incomes thanthose who don't, averaging $58,417 (vs. $32,624), according toa May 2001 survey by The CraftsReport.
Determine where you'll sell your products. Whilelooking for online outlets for her unique products, Emilie Autumnfound that the Internet was a great source of information for herbusiness, Fancy Deluxe Co. "I spent long hours researchingart, marketing and auction sites as well as websites of successfulartists," says Autumn, who's been selling handcraftedapparel, paintings, toys and furniture since 1991. She went onlinein 2000 and currently runs the business from Grass Valley,California, with the help of her husband, Ryan Cassano. "Iwould write [the artists] and ask them a million questions!"Autumn adds.
These web efforts paid off; link exchanges with like-mindedsites and participation in online auctions helped her site findboth traffic and media coverage. (We found her online, too.)
Other sales outlets for crafts include craft fairs, craft mallsand classified ads in crafts magazines. BIZ Experiencess with reallyunique products like Hart's and Autumn's might findrepresentation in galleries or retail outlets.
Price for profit. Again, research can help you solve oneof your most potentially sticky dilemmas: what to charge. "Theminute you start to do [your craft as a business], you discover youdon't love it as much when you're being paid 10 cents anhour," says Brandt.
To avoid this monetary nightmare, do your homework before youinvest time and money. "The primary mistake [beginners] makeis to look at their product and say 'I wouldn't spend morethan $10 for this," says Brabec. "They price based ontheir own pocketbook, which is a very big mistake because mostcrafters aren't very rich. What they have to do is research themarketplace and see what others who are making similar products arecharging for their wares."
When determining how much a product costs to make, you have tocount material costs as well as overhead like utilities, businesslicenses, accountant fees and more. "If you find out you canonly make 10 products a day and it costs you $10 to buy thematerials, then that's $100. You can sell them for $15. Is yourday worth more than $50? And that's before you start deducting[your overhead costs]," warns Brandt.
The Real Deal on a Crafts Business
- Startup costs: as low as $50 (excluding the cost of acomputer and craft materials)
- Equipment: craft supplies, marketing materials, acomputer, shipping and packaging supplies if you're sellingonline or through mail order
Advice From the Pros
When we interviewed fresh-to-the-game stitching BIZ ExperiencesJenny Hart, we asked if she had any questions for the otherentrepreneurs and experts featured in this story. Here is theiradvice:
Jenny Hart: How important is it to write a business plan?Is it only necessary for a business that will be looking for a loanor investors?
Susan Brandt: In short, very. A business plan is what youmust start with--and then check your progress against at variousintervals. Keep in mind, though, a business plan is a living,breathing document. You shouldn't change it gratuitously alongthe way...but as you get into business and your vision becomesclearer, there may be appropriate alterations to make along theway.
Hart: I feel like it's easy to look for businessusing the Internet. What are some of the most effective ways todraw business out of cyberworld?
Brandt: It's really not so easy. There's an awfullot of competition just to get people to find you. Ironically, thebest ways to do that are by using the very media that is theantithesis of the web: mailing and print advertising. TV, too, ifyou can afford it. If you can get [your business] on local [cable]TV or radio, you have the opportunity to promote your site. If youcan get a friend with an allied or noncompetitive traditionalbusiness to distribute cards with your [URL], so much thebetter.
Hart: How do I navigate the transition from working 9 to5 while starting my homebased business and then doing that businessfull time?
Brabec: There's no easy way to do this. Most new homebusiness owners put in up to 80 hours a week, dividing their timebetween their job and their business until something gives and theyhave to make a decision about giving one or the other up. If yourjob income is essential to your personal lifestyle, do not, underany circumstances, quit your job until you are sure you can bringin enough money (profit) from your homebased business to meet yourneeds, because you cannot assume that more time will translate intomore income.
First, you must have a solid plan for how you're going tospend your extra time to make and sell more products or startsideline activities to add to your income, such as teaching orwriting. When you can prove to yourself on paper that you coulddouble or triple your current income if you only had more time,quitting your job then becomes truly a matter of faith in yourselfand your abilities.
Tip: Include in your plan the "worst-casescenario" if you should fail. If you can live with thatpossibility, you don't have much to lose. Above all, do notrely on anyone else to tell you what to do--particularly family andfriends. In the end, I believe we must all trust our "gutreactions" since they rarely fail to be right.
Everything Else
It's impossible to state here every single thing you'llneed to do to get your new business off the ground; books have beenwritten on the subject (Brabec's, for instance). To get herArdenvoir, Washington, handmade soap business started, Cheri Marshcreated a name and logo, designed an e-commerce site, and created aline of products. And though she's been in business for morethan four years, her challenges haven't ceased.
"I live about 80 miles roundtrip from the nearesttown," says Marsh, who started The SoapMeisterLLC in 1997 after friends and family expressed interest in thesoaps she created for her sensitive skin. "It's verydifficult to find raw materials and near impossible to have themdelivered. Juggling manufacturing in with everything is achallenge, as the soap must cure for four to six weeks prior tosale; that entails estimating needs two months in advance." Tocombat these challenges, Marsh plans to relocate and expand herbusiness so she can have easier access to potential employees,manufacturing materials and offline customers.
So take a long, hard look at your favorite hobby before youdecide to turn it into a business. Do you want to associateaccounting, fulfillment, licensing, marketing and all the othercomponents of a successful business with what you do for fun? Ifthe idea of the public enjoying your handiwork and you takingcharge of your own life via your craft makes all the hours ofresearch and hard work worth it, then get going. The world iswaiting for your artistic touch.
Next Step
Ready for some serious research? Start with these resources:
Books
- The Crafts Business Answer Book and ResourceGuide by Barbara Brabec
- Home-Based Business for Dummies by Pauland Sarah Edwards and Peter Economy
Industry Associations
Magazines
