Welcome To Craft Business Buddy
Welcome to your first Craft Business Buddy eclass. I am so glad you have joined us here and I look forward to helping you along on your journey to opening your own successful craft business.
I am sure you are eager to get straight into it. I know you are excited at your new venture and you have every reason to be. You are starting down a fabulous new path with lots of amazing possibilities in front of you.
But before you dive in, please make sure you have read my guide to “The Number 1 Mistake Most People Make When Starting Their Own Craft Business and How To Make Sure It Doesn’t Happen To You!”
It is the first step to building the craft business of your dreams and without it, this eclass won’t make much sense. So, if you haven’t already, please go back and review it.
The Right Craft Business For You
You should now have a good idea of your goals, your dreams and your reasons for setting up your own craft business. Now it is time to identify the right type of craft business for you.
There are many different types of craft businesses for you to choose from. Each has their own advantages and disadvantages that you need to consider before selecting the business that will best suit you and your goals.
I will step you through the specific advantages and disadvantages of each in next week’s eclass, but before we go through those, it is important to understand what you are looking for.
I am sure you already have some ideas of what you think may be a great craft business for you. And you might be spot on with your choice. However, I ask you to open your mind to other options available to you as there may be a better choice for you that you haven’t thought of yet.
Today I will step you through some of the key things you should consider when making your choice. Think about how they apply to the business you already have in mind. Does your business choice really sit well with your dreams or do you need to make some changes?
Make notes as you go. You will find them useful to refer back to as you move along on your journey to building your craft business.
Please note that these are my personal opinions based on what I have experienced in business since 2003. You may not agree with all of them, and that’s okay. Everyone is different. Everyone has different goals. All I want to do is to help you find the right business path for you.
Things To Consider When Choosing
Your Business Model
There are two main areas you need to consider when choosing the right business for you. They are:
1. Time For Money
Many business models work on the idea of time for money. In other words, you get paid relative to the number of hours you work. These are generally service-based businesses and in the craft industry they tend to be single-owner businesses that specialise in making their own handmade goods to sell.
Many of us start out with this type of business model in mind. We love our craft and we are always making things…so we figure, why not sell them right?
On the surface, this doesn’t really look like a service-based time-for-money business, but let’s take a closer look.
For example, let’s say you love to sew so you make handbags and you sell them at your local markets for $50 each. You work out the costs of the materials you used and any expenses you incurred during creation and you discover your profit is $40 on each one. Great huh?
But, you spent 4 hours making each one so you are actually only making $10 an hour. And this is of course ignoring any time you spent trying to sell the handbag.
This is a time for money business.
There is no question that this type of business can work and can be highly successful. And for many of you, it will be the perfect solution.
But, be aware when choosing this kind of business that you may be limiting your income by the number of hours you are physically capable of working. If you take a day off, then you don’t earn any money that day. This is not necessarily a bad thing – it is just something to keep in mind.
Personally, I prefer a business where I can leverage my time. In other words, one in which I can earn an income even when I’m on holiday. If this idea appeals to you, then you may need to consider a different type of business…one where a day off doesn’t mean a day without income.
There are of course, things you can do to better leverage your time in a time for money business model. For example, going back to handmade handbags, you could hire someone to cut out the material for you so that you just have to sew it all together. Or you could team up with some other crafters who sell complimentary items like scarves or jewellery and combine your marketing efforts. It all helps, but you are still the centre of your business and without you, the business stops.
If this is the path you decide to go down, start thinking about what you can do to better leverage your time and maximise your business’s potential.
2. What To Sell
There are three main types of products you can sell in your craft business. It is important to understand the differences between them as your choice will affect the type of business you establish.
The three types of products are:
- Handmade Items
- Craft Supplies
- Ideas (also known as Information Products)
Handmade Items
These are things that you make yourself. For example, if you knit, you may want to sell the scarves, socks and jumpers you make. Or perhaps you enjoy paper crafts and want to sell the handmade greeting cards you create.
Whatever it is that you make to sell, keep in mind that you are essentially selling a service and therefore, your time. For example, if you sell a hand-knitted scarf, you are not just selling the wool you used to make it; you are also selling your design and the time you spent physically creating that scarf. Many people selling handmade items forget to factor the time they spent into their price and can find themselves working for just a few dollars an hour.
Craft Supplies
Craft supplies are the items people use to make their craft. For example, if you are selling supplies to people who sew, you might sell them thread, fabric or even sewing machines. Similarly, if you are selling to scrapbookers, you might sell them paper, glue and cutting tools.
Craft supplies are always in high demand (after all, crafters always need materials to make their crafts), but keep in mind that this type of product requires the highest level of investment as you will need to carry significant amounts of stock. And with that, comes the need for a lot of storage space. If you are planning to work from home, this might be a serious consideration for you. Do you really have enough space to store everything, especially when your business starts to grow and you expand your product range.
You will also have a lot of competition in this type of business, which generally leads to price-cutting. That’s not necessarily a bad thing, but something to keep in mind, especially when working out your margins. If your margins are too low, your business will not be sustainable.
Ideas
This is my favourite type of product. No matter what craft you choose, crafters are always looking for ideas and inspiration. You can sell ideas by running classes and workshops, selling patterns, selling kits, publishing a book, publishing an ebook or running a membership or subscription-based site.
This type of product does not usually require much in the way of investment and can be highly leveraged if set up correctly. And it is a fabulous way of differentiating yourself from your competition as you can have your own unique products to sell.
Which Business Model Are You?
As we look through the different business models next week, you will be able to see more clearly how your choice of product type affects your business and your direction.
Before then, start making some notes in your notebook on the types of products that appeal to you. Have a look around online and see what other people are doing. If you want to sell craft supplies, look for stores that sell similar items to those you are planning to sell. If you want to sell ideas, look for websites offering ebooks and subscription processes and start thinking of ways to differentiate from them.
Make lots of notes! These will help you immensely next week as we go through each business model and assess what will work for you.
Make sure you never lose site of your dreams too. It is easy to get caught up in all the wonderful things you ‘could’ do, but we want to make sure you end up on a path that you love.
See you next week!
Jen 🙂
