Keeping an Eye on the Bottom Line In your Craft Business

 

When starting out in the craft business, you need to keep one thing in mind: this is a business, not a hobby.

 

Obviously, you started your hand made craft business because you loved crafting and hoped that you can turn your hobby into a successful business.  Making that transition from hobby to business can be difficult though.  You need to remember that you are a business and that like every business you have a bottom line.  Your goal is produce your project for as little money as possible so you can maximize your profits.  Here are a few suggestions on how to keep your costs low.

 

Supplies can be one of your biggest expenses.  In order to keep your costs as low as possible you need to spend as little on supplies as possible.  Start that by doing your research.  It will take some time, but research different suppliers will make all the difference in the long run.  You need to shop around to make sure you are getting the best deal possible.  You might even consider checking your local discount stores.  Often these large chain stores have very reasonable priced craft supplies.  If possible, you should consider buying wholesale.  This will involve obtaining a Retail Tax number, but if you are serious about your home made craft business then you should apply for one anyway.  You can also buy your supplies in larger quantities.

 

With the cost of gas and hotels, one of your other biggest expenses will be out of area craft shows.  To start, just try selling your crafts at local shows.  This will give you a chance to see how popular your products really are and how much stock you might need for a two day show or a week long show.  Once you’re ready for an out of town show, do a bit a research.  Considering the show fee and your gas and hotel costs, will you really earn enough money to make it worth your while?  What kinds of hotels are in the area?  Have the show organizers arranged any kind of discount with local hotels?  Can you carpool with another crafter in your area to reduce costs?  Is it possible to combine two out of area shows on one trip rather than heading out twice in one month?

 

Marketing your craft doesn’t have to cost a lot of money.  You can start by spreading word about your new venture through family and friends.  You’ll be surprised how many sales and orders you get just through word of mouth.  You can try to have your work featured in an article in your local paper.  This way you are marketing your product without having to pay for advertising space in the paper.

 

There are also ways to sell your craft without spending a lot of money of table or space rentals.  Many gift stores accept products from local crafters on consignment.  You may have to pay them a fairly large percentage, but you will not have to pay the store any money right up front.  You can also think about holding a craft sale in your own home, rather than renting a table somewhere else.  If you know a lot of other crafters, you can all hold a sale together, charging them a smaller fee that other shows might.  You will have a lot more control and also keep your costs really low.

 

You must also know where to draw the line in terms of freebies for friends and family member.  Whereas you were happy to complete projects for free or just for the cost of supplies when you’re crafting was just your hobby, you need to establish different rules now that you run a business.  It may difficult at first, but it will make things much easier for you down the line.

 

Finally, it is important to establish a realistic price point for your products.  You’ll probably never make enough to even charge minimum wage for the time you put in to making a craft, so don’t try to set your prices that way.  You want to make a decent profit, but you also want to be able to sell your crafts and no one will be buying if your prices are too high. 

 

Remember it takes time to see a real return on your investment.  As long as you can cover your costs, you’re off to a good start, and the rest will come with time.