Addressing the small business management issues related to running a company may not be the first thing on your mind when you decide to start selling crafts. However, making smart, strategic decisions can help you build the kind of company that is right for you, plays to your strengths and brings joy into your life.
Yep! Good small business management decisions can do all of that.
Maybe you are analytically-minded and already excited about jumping into the planning aspects of building your company. If so, great! I won't need to convince you to dive into these tasks with your full attention and focus.
If you're not thrilled about the management aspects of building a company, and you'd much rather just get back to your studio where you can design and create, I'm going to challenge you to change your thinking!
Small business management is not just a set of dull, bureaucratic tasks you must drudge through in order to get back to the creative work you love.
I'd challenge you to think of small business management as a set of tasks that are ultimately creative.
All of the practical and tactical decisions you make about your company come together to create a specific business that is uniquely your own. And if you are smart and strategic when you make those small business management decisions, you'll be in a better position to grow the kind of company that works for you.
Do you want to spend most of your time on design work or production work?
Would you rather sell a few, select items to a small number of people, or do you dream of selling a lot of items to a huge number of customers?
What type of handmade items are you most skilled at making? What type of items do you most enjoy making? How will the tools, processes and materials you work with impact your company? If it will limit you in some way, can you learn a new skill or make a small change to direct your work in a way that is a better fit for you?
Do you love the idea of selling at crafts shows, traveling, interacting with other craft artists and meeting your customers personally, or does selling at craft shows hold no appeal for you?
What aspects of selling crafts really captivate you and play to your strengths? What factors do not appeal to you? How will you structure your company to ensure you highlight your strengths and preferences?
Yes, I know some of those questions require a lot of thought, and it might not be obvious how the answers will help you with the practicalities of small business management.
The answers to those questions will form the foundation of your business and will inform every management decision you make.
It is well worth your time to sit down and think about how you would answer those questions.
If you know where you want to go with your company, you will be in a better position to make small business management decisions that will take your company in the direction that is right for you.
Small business management tasks and decisions ultimately shape your company into something you love, or something you don't love.
Part of the appeal of creating your own business is the fact that you are in control.
So why not take the time to create something you love?
Whether you develop a traditional plan or something non-traditional that fits you better, writing a business plan forms the foundation of your company.
It requires you to become very business minded and think through all of the practicalities of selling crafts including:
That depends on what your goals are for your company.
If you are trying to secure funding from any outside sources like banks or investors then, yes, you definitely need an excellent, traditional, formal business plan.
I am not a lawyer!
Although these articles are carefully written and researched, they come from my personal experience with selling crafts.
I am not, by any stretch of the imagination, a professional accountant, or bookkeeper or lawyer, so any information on this site is not intended to be legal advice or to replace the advice of professionals.
Please use your best judgment to determine for yourself when you need to consult a lawyer, accountant or other professional.
If you are going to fund everything on your own, then you might not need a traditional, formal business plan. But you might want one to help guide you with your decisions.
Even if you don't create a traditional business plan, I would strongly recommend creating some type of plan that works for your specific business.
In the first year of running my jewelry business, my mentor required me to write a formal business plan.
I would never in a million years have done that on my own if he hadn't made me do it. But I'm so glad I did! I learned a lot and prevented myself from missing important opportunities.
I won't pretend to be an expert on how to write a traditional business plan. There are plenty of people who know more about that topic than I do.
I will share with you my own experience with creating an art business plan. And, if you want help writing a business plan, I'd recommend the book Successful Business Plan by Rhonda Abrams. I used several books when writing my own plan, and Rhonda Abrams' was, by far, my favorite. It is incredibly thorough, but also easy to understand.
The decisions you make about how to price your crafts play a huge role in shaping your company.
Your pricing decisions impact (among other things):
So you really need to consider your business goals when you price your crafts.
Especially when you are starting out, emotions can quickly get in the way of making good pricing decisions because placing a price on your item is also placing a value on your skill and creativity.
To take the emotion out of pricing decisions, I personally like to start off with a craft pricing formula. Some people don't love the idea of using a formula, but I think it provides an objective place to start and ensures you have taken all of your costs into account.
The number you come up with using a formula isn't set in stone. You can always adjust the price if it doesn't seem quite right.
Once you delve into the topic of pricing art, you'll probably discover it's a bigger subject than you realized. It has a significant impact on your business, so it's worth investing some time learning as much as you can about pricing art or crafts.
There are two books that I'd recommend on the subject. They each have different strengths, so ideally, I'd suggest reading both.
The ebook Price it Like Picasso has a lot of smart insights into craft pricing that you probably haven't read anywhere else.
This book focuses on describing how to get premium prices by selling handmade items in an auction format.
I'd recommend this book even to those who don't think they want to sell in an auction format because it has excellent advice about increasing the perceived value of your work so you can command higher prices no matter how you sell your crafts. Here's my review of this fascinating book.
How to Price Crafts and Things You Make to Sell is the other book I'd recommend on this topic. It is a thorough book that covers more traditional craft pricing strategies and scenarios.
Its strength lies in the depth it goes into in considering pricing issues connected to more traditional craft selling venues like juried shows, wholesaling, and selling online in a non-auction format.
The book isn't just about pricing. It goes much deeper to show you how to make your business as profitable as possible. Here's my review.
Your business name is often the first thing your customers will see, and it can have a huge impact on their expectations.
You want to send all of the right messages with your company name, so you'll need to know exactly what type of message you want to send before you start to brainstorm company names.
The process of registering your business varies depending on where you live. When I went through the business name registration process, it was simple, fast and inexpensive.
Registering your company is a smart small business management decision, and in some locations, it is absolutely necessary if you want to sell crafts at juried art shows because you'll need to display your business registration / vendor's permit in your booth.
Registration is usually necessary for establishing wholesale accounts. If you have wholesale accounts with major supply stores, you will usually be able to purchase items at 50% off the regular retail price. That savings can be a crucial difference in the profitability of your business.
Finally, here are several resources that I've found useful for building a small business.
Craft Specific Resources
Links to plenty of resources that can help you build your craft business.
General Research Resources
These resources are not specific to crafts, but they are useful for small business owners
Places to buy craft supplies online.
How to get your craft supplies at a discount to keep your costs low.