To have a successful business, there are basic best practices that every business must have in place, as well as, basic mistakes that should be avoided.

 

These are the most common mistakes I see handmade business owners make and why they can harm sales…

 

 

HANDMADE BUSINESS MISTAKE #1 – BEING TOO CONSISTENT

 

Consistency is key to building a successful business. It should be present in terms of constantly showing up, putting effort in, working on your business, etc.

 

However, there shouldn’t be too much consistency when it comes to what you work on and how your work on it.

 

Especially during times like these, businesses have to be willing to adapt.

 

Every single business I’ve owned started as one thing and ended up something completely different by the time it was profitable.

 

It doesn’t matter what has worked in the past, what your vision was, or what you want to do. If you want your business to succeed, it needs sales. And if what you’re currently doing or selling isn’t bringing sales, you must make changes.

 

So continue to show up and work on your business, even when sales are slow, but consider adapting:

 

>> HOW YOU ORGANIZE YOUR BUSINESS AND PLAN TASKS

Perhaps you need to take a closer look at your numbers and put more time and money into tasks that give you a return on investment.

 

>> WHICH PRODUCTS YOU SELL

Re-assess the products you’re selling. They may need a little refining by creating collections (now is a good time to start planning your holiday collection…here’s how), more continuity among ALL products by developing a signature style, or you may require a new product all together.

If you’re exploring new types of products to offer, start by making a product for a profitable target market, then explore what types of products are trending now, and lastly, research to determine a new product’s viability before spending time and money developing and launching it (here are 5 ways to know if people will buy your product).

 

>> HOW YOU MARKET

It’s comfortable to stick with what you know, but too many business owners think the key to more effective marketing is to simply ramp up their current efforts. If current Facebook posts don’t generate sales, is unlikely posting 2 or 3 times more per day will result in sales.

Ensure you’re not making common marketing mistakes, implement best practices to help your marketing get more eyes on it, and please, please, PLEASE…start a newsletter already 😉

 

>> HOW YOU SELL

This year really changed the way people shop. Many craft shows have been cancelled and many retailers have closed.

You may have to learn how to use a new sales platform (such as Etsy…find out if it’s worth it to start or keep an Etsy shop).

If you’ve been selling on Etsy and haven’t seen any sales, or have seen a drop in sales, then you may need to adjust the way you sell on Etsy. Whether it’s a worldwide pandemic that causes the drop in sales or an Etsy algorithm update, you must be willing to adapt.

 

Here are some tips to work with Etsy’s changes and how to boost traffic to your shop.

 

We can’t force consumers to be interested in our products. We must listen to what they want and adjust our businesses accordingly.

 

Start by getting to know your customers.

 

 

 

HANDMADE BUSINESS MISTAKE #2 – FORCING CUSTOMERS TO CHOOSE ALL OR NOTHING

 

Most people will be a little skeptical of a business the first time they discover it.

 

They’re unfamiliar with its reputation, product quality, reviews, customer service, etc.

 

Consumers typically aren’t ready to spend a lot of money with a business until they become more familiar with it.

 

That’s why every business should offer a product that allows new customers to dip their toes in the water before fully committing to a higher-priced product.

 

Imagine walking into a beautiful store. You love all their products and feel so inspired/excited by them. But most of the items are more than what you’re willing or able to spend that day.

 

Which situation would feel better?

 

Being able to find a smaller, lower-priced (but still exciting) item you can buy that day…

 

Or having to walk away without purchasing anything because every item is above your price range?

 

If you leave the store with a lower priced item (rather than no item), you get to carry that feeling of excitement home. Each time you look at that item. you’re reminded of the store and all the other items you want to buy.

 

The store also benefits because instead of spending $0 with them, you spent some money.

 

You can create a similar situation with your shoppers when you offer entry-level products.

 

But it must be done properly to actually encourage a sale, not deter any sales of your higher-priced items, and result in repeat buyers down the road.

 

Here are some tips to create an effective entry-level product.

 

 

 

HANDMADE BUSINESS MISTAKE #3 – TRYING TO OFFER SOMETHING FOR EVERYONE

 

Not only are you making your business less profitable by offering too much variety (either by having too many types of products or too much variety among your products) you’re also likely confusing shoppers and deterring sales.

 

Let’s say you have a leak in one of your bathrooms. It’s important you get it fixed properly so it doesn’t cause further damage to your home.

 

Are you going to trust and hire a plumber who specializes in fixing leaks? Or someone who’s fixed a leak or two but also paints houses, dabbles in electrical work, installs flooring, and occasionally tiles?

 

A Jack of all trades may seem impressive, but the plumber will be the more trustworthy choice for most homeowners. And that trust and expertise means the plumber can charge more for their work.

 

Although buying a piece of jewelry or bar of soap may not have as high of stakes as getting a leak fixed, consumers still care about their money and won’t give it up for just any product.

 

Refining your product line and limiting options can actually increase your sales. Just check out this study that documented a 27% increase in sales when jam flavor options were reduced.

 

First, determine if you’re offering too many products, then determine which products are your best-sellers and which you can get rid of.

 

There’s typically an 80/20 pattern when it comes to sales; 80% of your sales likely come from 20% of your products.

 

If you offer 10 different types of products, determine which 2 (20%) you sell the most of (80% of sales).

 

 

 

HANDMADE BUSINESS MISTAKE #4 – SELLING PRODUCTS THAT AREN’T PROFITABLE

 

To build a profitable business, you must start with a profitable product.

 

Unfortunately, some products are harder to profit from than others, due to their high costs and a cap on how much consumers are willing to spend on a product.

 

For example, a quilt can easily take more than 10 hours to make. If the sewer pays themselves $15/hour, the quilt’s price is already up to $150, without even adding material costs, overhead costs, or profits, which would easily drive the price above $200.

 

Because consumers can purchase entire bedding sets for less than $200, it makes it harder for them to understand and justify spending over $200 for a quilt.

 

Although selling quilts can be harder to profit from due to high production costs, sewing skills can be transferred to make a different, more profitable product.

 

For a closer look at what types of handmade products are more profitable, less profitable, factors that can eat into your profits, etc. check out: THE MOST PROFITABLE CRAFTS TO SELL.

 

 

 

HANDMADE BUSINESS MISTAKE #5 – CREATING PRODUCTS BLINDLY

 

When I started my handmade business, I never planned products. I’d head to the fabric store, wander the aisles and then start “planning” once I found a fabric that inspired me.

 

I would come up with new designs on the fly and would never base decisions on sales numbers.

 

I would simply make what I wanted to make and find out at my next craft show if they were products people wanted to buy.

 

If my new items didn’t sell, I’d shrug my shoulders and reduce their price for the next craft show.

 

Once I understood the number side of my business, started paying attention to my numbers, and doing research before spending time and money making new products, my business became much more profitable and there were fewer “misses”.

 

Before you start making a new product, consider if it’s an item your business actually needs and will help you reach your sales goals (or if the new item is just an outlet for you to be creative), and do some research to determine if it’s likely to sell. Check out: 5 WAYS TO KNOW IF PEOPLE WILL BUY YOUR HANDMADE PRODUCTS

 

 

 

HANDMADE BUSINESS MISTAKE #6 – NOT USING THE MOST EFFECTIVE MARKETING CHANNEL

 

Unfortunately, for most businesses, social media is not a very effective way to market.

 

Posts may reach hundreds or thousands of people, but typically, very few of those people end up purchasing.

 

Email marketing can be up to 40x more effective than social media marketing (source).

 

A newsletter allows you to stay in touch with your existing customers (so you can sell to them again) and the people who have shown interest in your products but haven’t yet purchased anything.

 

It only takes one subscriber and one email. Yes, your newsletter can help you sell even if you only have one subscriber.

 

Sending a newsletter weekly or bi-weekly is ideal but you can send one once a month, or even once a quarter if you’re really not into sending emails, and you’ll still see a boost in sales.

 

Check out: HOW TO START, SEND & GROW A SUCCESSFUL NEWSLETTER

 

 

 

HANDMADE BUSINESS MISTAKE #7 – IGNORING YOUR SHOPPERS’ BEHAVIORS

 

In 2020, more consumers are shopping online…where their options are limitless.

 

They have more options that allow them to find and buy products that are perfectly suited for them.

 

They’re able to enter specific keywords and find the exact product they’re looking for. E.g. “black and gold concrete succulent planter”.

 

If you get to know your target market, the product details they care about, and the keywords they use to describe them, your product listings can be the first ones they see when shopping online.

 

On the other hand, when a product is named and described using keywords the maker typically uses (e.g. hand-poured round concrete pot), their potential customers are likely to miss their products when shopping (because, as consumers, we don’t typically think of a succulent planter as a “hand-poured round pot”…even though it may be exactly what we’re looking for).

 

It’s so important to know and use the language your potential customers use.

 

When shopping online, it’s all about keywords.

 

That’s how customer searches are matched to products.

 

Start by understanding who your typical customer is, and then start implementing the right keywords online (here’s how).

 

 

 

HANDMADE BUSINESS MISTAKE #8 – FOCUSING ON CREATING

 

As creative people, of course we would love to spend all our time creating. But that doesn’t build a business.

 

Unless you’re willing to hire someone to market and sell your products, you must be giving equal, if not more, time to marketing and sales tasks.

 

Creating is straightforward. You generally know the steps you must take to end up with a completed product.

 

On the other hand, marketing and selling can be a little more elusive.

 

It’s not always clear which tasks will give you the results you want, or even where you should start.

 

That’s why I like to start at the end, by looking at a sale and working your way back to determine how you achieved it.

 

This process can help you find the steps that move your business towards more sales and uncover meaningful, sales-driving tasks.

 

Check out: SALES-DRIVING TASKS FOR YOUR HANDMADE BUSINESS

 

 

 

HANDMADE BUSINESS MISTAKE #9 – TREATING CUSTOMERS LIKE A CASH MACHINE

 

Every relationship must have give and take. And when something is given without first taking, or when giving is unexpected, it always seems more valuable. Such as coming home to a clean house, being cooked a meal, or receiving flowers just because.

 

Your business has a relationship with its customers.

 

There’s give and take when you take their money and give them a product in return.

 

But consumers appreciate when a business provides value without them always having to give money.

 

That doesn’t mean you should give your products away for free. But you can offer value in other ways that cost very little in terms of time or money.

 

For example, a business that sells modern farmhouse décor items and targets people interested in decorating their home in a modern farmhouse style could offer decorating tips. Such as the top 10 trending paint colors for modern farmhouse, or tips to perfectly decorate a fireplace mantle in a farmhouse style. Or, they could offer a free printable, such as a “Home Sweet Home” sign that can be printed and framed to add farmhouse décor to an entryway.

 

That’s offering value (decorating tips or a free printable) without asking for anything in return.

 

Although you may not generate as many sales this way, it keeps your business at the top of your (potential) customers’ minds.

 

There’s also a way to promote your products along with a “freebie”.

 

It’s called The Trojan Horse Method.

 

It “hides” a promotional message inside a “gift”.

 

For example, let’s say I sell modern farmhouse style pillows and I’ve made a free “Home Sweet Home” PDF people can print, frame, and hang in their mudroom. I could photograph that freebie hanging in my mudroom, with a bench below it and a couple of my pillows on the bench.

 

When I email my subscribers the printable freebie, I would share that photo in the email, add a few tips on where to hang the sign, and mention other items that work well with it. One of those items would be my pillows and I would include a link to those pillow listings.

 

I’m delivering something free (and something people want) but mixing in a marketing message (something people tend to be less fond of).

 

That’s the Trojan Horse Method.

 

 

 

HANDMADE BUSINESS MISTAKE #10 – NOT HAVING MULTIPLE REVENUE STREAMS

 

It’s very rare for a business to experience continuous growth all year long, and year after year. A dip in sales at some point is inevitable.

 

If all your eggs are in one basket and a change comes along, you may lose your one and only source of income.

 

For example, if the only way your business makes money is by selling handmade products on Etsy, you may see no need to explore other revenue streams when times are good and sales are high.

 

But if Etsy makes a change to their website and your sales are cut in half, you’ll be forced to find another way to make money until you get things sorted on Etsy.

 

However, it can take weeks, months, or even years to set up another sales channel (e.g. start a website and get traffic to it) or to find success with another revenue stream (e.g. selling a course on how to make jewelry).

 

Start building multiple revenue streams now, so when the next big shift happens, your business will still have money coming in.

 

Here are 10 alternative ways for your handmade business to make money, aside from selling your products on Etsy.

 

 

IN GENERAL

 

In general, it’s important to treat your handmade business like a business.

 

It’s common for us creative people to pay attention to the making of our products and ignore the basics that help build a successful business (I did it for years).

 

Set a monetary goal for your business, cut out tasks that don’t give you a return on investment, and make a plan that helps you reach your financial goals…month after month and year after year.

 

THE SUCCESS PLANNER will help you do that.

 

 

LINKS SHARED IN THIS ARTICLE:

 

 



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