Craft and Home Business Ideas

Researching craft and home business ideas can help you to determine a profitable niche for yourself. These 7 questions will help you think through your craft business ideas and options.

1. What is the perceived value and potential markup of the item you are planning to sell?
Will you be able to sell your craft at a price that will allow for a fair profit? Some crafts have a greater perceived value than others even though the time and cost of materials to produce them may be the same. Try applying a craft pricing formula to your product idea to get a sense of what you will need to charge for your product and whether you feel you could make a profit with your craft.

2. What startup costs are involved?
Do you need to buy expensive equipment or supplies to make your craft business idea a reality? Some crafts can be made with simple, inexpensive hand tools and raw materials, others require an investment in quite expensive tools and materials.

What sales venues fit well with your product and what selling costs do you expect to incur? Do you have an idea of the potential startup costs involved launching your craft business? If your projected startup costs are high, are there any ways to cut costs without cutting the quality of your product? Can you afford to commit your own money to paying those startup costs?

3. What are the barriers to entry into this market?
A 'barrier to entry' is a factor that would prevent someone from being able to launch a similar type of business. Examples of barriers to entry include high startup costs, high level of skill and training required or government regulations.

You might initially think that craft and home business ideas with few barriers to entry are desirable. Keep in mind, though, the fewer barriers to entry, the easier it is for competitors to enter your niche. So, the more barriers to entry, the harder it is for someone else to produce a similar craft, the better it will be for you.

4. If your business is home based, how would your craft and home business ideas impact your home?
Are you planning to locate your studio in your home? Have you considered the health implications of your craft and home business idea? Some processes and raw materials used in some crafts can carry health risks, particularly if you're working with them on an ongoing basis or in large volumes as you might be in a business setting.

Be sure to assess the safety requirements related to the tools and raw materials related to your craft business idea. Check out the Materials Safety Data Sheet (MSDS) for health and safety information for any material you might work with. Suppliers are required to provide the MSDS for their products. You'll often find the MSDS right on supplier's website. If you can't find it, contact the supplier if you have any questions about using the products safely.

5. How does your location fit with your craft business idea?
Do you live in a small town with a strong tourist market? Maybe you are near the hub of a major city. Do you know the demographics of the geographical area you intend to cover? The characteristics of the people who live in, visit and shop within your business' geographical reach will impact the growth of your business.

6. Can you easily access the supplies you need?
Online shopping makes it pretty simple to access all kinds of supplies, but purchasing raw materials is still an issue worth considering. Do you have to import your supplies? If so, will you have to pay duty? How will that impact your selling prices? Can you get supplies quickly if you unexpectedly sell out of an item or get a large order?

7. How original are your craft and home business ideas?
Is your craft business idea unique? Does your product really stand out from the crowd? Have you determined how you will differentiate your product from the rest of the competition? The time it takes to develop your craft from being something the average crafter would make into something truly remarkable will definitely pay off and be well worth the time invested.

Don't lose sight of the business component of your home craft business. Taking the time to research your craft and home business ideas and understand the benefits and challenges of developing your specific craft business idea will help you to make better business decisions, save you from some mistakes and give your home craft business a more solid footing in your market.