When a person has creative skills it is a reasonable idea to put them to good use and earn money from them, but simply making things does not ensure business success. Running a handmade business is the same as operating any other business – there are many different aspects to consider. However, with a little organization and support, it can turn out to be a profitable, as well as fun, venture.
The upside to a handmade business is that it can often be run from home, particularly in the early days. This helps to cut back on overheads, such as workshop rent and traveling, and means less outgoing expenses. However, working from home can mean a high level of self-discipline is needed, as it is easy to get distracted – but a dedicated work area can assist in reducing this risk.
Careful decision-making is necessary when obtaining the equipment needed to get the business going. Some items, such as tools, can be purchased via online auction sites or secondhand stores. Choosing stock suppliers is also an area of consideration – the cheapest supplier may not always be the most cost-effective option, as the quality of their products may turn out to be less than adequate.
Finding customers and clients
Clever marketing is required, no matter how large or small the business. Setting up a website can help attract clients from all over the world, and it is now possible to have a professional-looking site for the fraction of the cost that most large businesses pay. Word of mouth can also help with the marketing of a new company; if you supply good quality items, people will talk about them to their friends. With craft businesses, it can be beneficial to participate in craft fairs and cultivate potential customers. Hand out business cards and make the time to talk to people about your products, and sales will start to increase.
For those who are running a handmade business aligned with their favorite hobby, this is a strange piece of advice. However, if the products being made are overpriced or underpriced, then they could be undermining business success. It is absolutely essential to work out the production cost of each item and factor in a profit margin. If there is no profit being made, consider introducing a replacement item. From a business owner’s perspective, this could mean no longer making some of the things that they love the most.
Getting financial control
One way of ensuring that payments are coming in as they should be, is to enlist the services of umbrella companies. They are able to deal with invoicing on behalf of the handmade business, and ensure that clients pay on time. They can also deal with aspects such as income tax paperwork and other financial obligations. This approach offers useful advantages to those just starting out in business. The amount of time spent on administrative tasks can often leave the handmade business owner with less time to spend creating products to sell, and similarly less time available to sell them. Freeing up administrative time allows room for creativity, and assists the owner to focus on building the business.
Guest post written by Dave