Most craft businesses start as a side project.
>>Some start because of the disdain from a life-sucking job and with the hope of the side project turning into a full-time business.
>>Some start as a hobby to fill the time.
>>Some start because of a burning desire to make stuff and wanting to recoup some money to make more stuff.
When a handmade business is a side project, it often means there’s some sort of a shortage of time and money.
When I started my handmade business, it was because I was tired of working for someone else, not having enough creative control, and I wanted something bigger and more meaningful to work towards.
My (now) husband and I were living in a tiny 1-bedroom apartment, saving to buy our first home (a two-bedroom condo).
So I was definitely short on money.
I worked full-time, Monday to Friday, and was trying to maintain relationships by not always saying “no” to hanging out with people.
So I was also short on time.
Even years after we purchased our condo, adjusted to our new living expenses as home-owners, and saved up enough money for me to take the leap and work on my handmade business full-time, there was still a lack of time and money.
No matter how big or small your business is, there will always be a desire to have more time and money to spend on it.
Obviously, you can’t start a business with absolutely NO money. You do need some to buy materials and start making sales.
What’s more important is what you do with that little bit of time and money.
>>Should you pay to have a logo designed?
>>Should you spend your time growing a Facebook page? Or should you focus on Instagram?
>>How do you get your products seen when you don’t have money to spend on advertising?
The following 5 steps will help narrow down what’s important for your craft business and how to best spend your time and money when you’re bootstrapping it.
STEP 1 – CHOOSE ONE
Even the biggest, most profitable businesses in the world have a list of projects they want to accomplish and a lack of resources to do so. They have budgets and deadlines they must adhere to, so they have to choose wisely.
They make those decisions based on which projects are most important and in line with their big goals. Then they create a plan to stay on time and budget while completing those projects.
Successful businesses prioritize.
Not a single business has an unlimited budget and resources.
Not a single business can “do it all”
They succeed when they know what is and isn’t important to their business and they stay in their lane.
What’s worth your time and money, and what can wait?
WHAT DO YOU WANT?
To decide, think about what your goals are. Not your pie in the sky goal but what do you want to get out of your business this year?
- Do you just want to get it up and running and make one sale?
- Do you want to get off Etsy and launch your own website?
- Do you want to branch into wholesale?
Get really clear (and realistic) on what you want because that will help you decide what’s worth your time and money.
WHAT COULD YOU DO?
Every business requires:
>>marketing to get the word out about that product
>>a way to sell the product
Under each category (products, marketing, selling) make a list of all the projects you feel you should take on. That might be:
- PRODUCTS – make x, y, and z products, offer X service, etc.
- MARKETING – start my Facebook, Instagram, and Pinterest account and get 100 followers on each, start my newsletter, send out press releases once per month, etc.
- SELLING – start an Etsy shop, sell at x number of craft shows, get products into 2 local retailers
Under each category, choose one project that will help you reach your goal.
Yes, just one.
>>Which align with your goal for the year?
>>Which align with you and your skills?
>>Which get you excited?
You cannot do it all so you must choose one path to focus on and become really great at it.
Let’s take a look at each category:
In the earlier stages of my handmade business I sold:
- Rice heating bags
- Sleeping Masks
- And I’m sure many other odds and ends I’ve forgotten about
That much variation ate a lot of my time and money.
>>Think about the different materials I needed for each of those projects. I made a small amount of each product, which meant, I couldn’t purchase materials in bulk to save some costs.
>>I also needed a different pattern for each product and time to perfect it before I was happy enough with the end product to make multiples and sell it.
>>That many types of products also meant a lot of switching between materials, tools, patterns, techniques, etc. and an inability to be efficient with my production time.
As I slowly weeded out products I started to see more profits and a more efficient business. I had to really think about my vision for my business, what I wanted to be known for, and what I had a passion to make.
Pajamas didn’t exactly get me excited and neither did aprons. I’m not a big cook and I’ve never even owned an apron so why was I trying to understand and make aprons for people who did?
I was trying to build a business around things I could make and what I thought people might buy at a craft show.
I wasn’t focused. I hadn’t thought about what I really wanted; who I wanted to serve, what I could see myself making over and over, or what I wanted to grow my business into.
Offering too many types of products is the biggest and most common mistake craft business owners make.
Determine what category of product you really want to make and be known for.
Don’t try to be a “one-stop-shop”, or a business that offers a wide variety of gifts for all occasions, or a business that sells one category of product but for a wide variety of people (e.g. jewelry for all women).
Don’t even try to build, for example, a “bath & body” business at this point. Offering bar soap, cleanser, toner, lotion, cream, bubble bath, bath salts, and lip balm is way too much for a bootstrapping business to take on.
Instead, focus on building a bath OR body business. Or better yet, something specific within one of those categories.
>>Maybe offering the most luxurious line of bubble baths in the bath category.
>>Or a line of cleansers under the body category.
When you’re building your craft business part-time with little money, get as narrowed and focused as possible with your products.
- You’ll build a name for your business much faster
- You’ll cut down on wasted materials and products that don’t sell
- You can buy materials in bulk
- You can become more efficient in all areas of your business
- The quality of your work improves
- You become an expert and the go-to for __________
What’s the one type of product you’ll focus on?
Marketing is essential for every business. You don’t need much money to do it (e.g. you don’t have to spend money on ads) but it definitely deserves a good portion of your time.
Choose one platform and method that best resonates with you and your customers and focus on that.
You cannot be on every social media platform and build a thriving newsletter, and send out powerful press releases that get you featured on the local news.
You must start with one.
Which social media platform do you understand and enjoy using?
If it’s Instagram, focus your efforts there and don’t even worry about trying to grow your following on Facebook, Twitter, or Pinterest.
If you can’t stand social media, maybe attending networking events, speaking in front of people, or being interviewed is more your thing. Choose a marketing platform and method that aligns with that.
Which forms of marketing align with your goals?
For example, if you want to build a thriving Etsy shop, your marketing must be focused online (e.g. social media, getting linkbacks, or building a thriving newsletter…HOW TO START, SEND, & GROW A SUCCESSFUL NEWSLETTER will help with that). If you want to get into retailers, you’ll need to work on creating beautiful lookbooks and getting face time in with shop owners.
Choose one marketing method and master it. Once you have it down, you can layer another form of marketing on top.
There are several ways to sell your handmade products but the most common are:
- At craft shows (tips for being successful at that are here)
- Online using a marketplace (such as Etsy)
- Online through your own website
- Selling wholesale through retailers
Using ALL is not an option when you’re short on time and money.
Choose one sales channel based on your goals and preferences.
>>Do you love the idea of getting out on weekends, chatting with people and being surrounded by other makers? Craft shows are a good fit.
>>If weekends are packed with getting your kids to soccer practice or dance recitals, selling online may be the route for you.
>>If you have a goal of getting your products into stores across your city, focus on reaching out to retailers.
In some situations, you may need more than one sales channel. For example, if you want to sell at craft shows but also want shoppers to be able to buy from you after an event, you’ll need an online sales channel.
In this case, you’d focus the majority of time and money on craft shows and find the quickest, cheapest, and easiest way to set up and maintain an online shop.
Consider which sales channel is a fit for you and your goals, and one you should spend the majority of your time and money on.
STEP 2 – FIND YOUR “IT” FACTOR
Once you know the product you’re going to focus on, you must figure out what’s going to set you apart.
It wasn’t enough for me to simply make “bags” and expect them to sell.
I did try that though.
I thought: well they’re not just any bag…they’re my designs. My designs are different and people seem to like them.
Sure, people did like them. However, I was trying to build a business on random sales.
People were only buying my bags when they were randomly in the right place at the right time and they happened to find one they liked.
I wasn’t getting any deliberate sales from people searching for a specific type of bag and mine being the perfect match.
>>No one was searching for the specific style of “Erin’s designs”.
>>No one was buying my bags at craft shows because they had been looking everywhere for something like them and they had to buy one right then and there.
>>No one had to come to me because I was the only one offering a product that specifically suited their needs.
Consumers have hundreds of options to choose from when they go looking for a new bag, even within the handmade community. I needed something to set mine apart so consumers deliberately choose mine, not just when it was convenient to.
RANDOM VS. DELIBERATE
Imagine a restaurant relying on people randomly walking down their street at the right time of day, being hungry and having time to stop in for a meal.
A restaurant being known for offering the best mac & cheese dishes and people going out of their way to visit the street the restaurant is on because they can’t get anything like it anywhere else.
That’s the “IT” factor we need to create for your business so sales come to you deliberately; not randomly when your products happen to be in the right place at the right time.
You’ll spend a lot of time and money trying to market and sell a product that can be found and purchased anywhere.
When you have something unique about your product that people are actively searching for and have to come to you to get it, your business can grow on its own.
People don’t typically search for a “cutting board”. You can find a regular cutting board at any kitchen store or Bed Bath & Beyond.
They may search for a “personalized live edge cutting board” or a “charcuterie board” or “state cutting board”.
Now, that doesn’t mean you’ll be the only person selling “personalized live edge cutting boards”, that’s not what we’re going for.
It does cut down on the competition you’re dealing with and your products have a better chance of being found in a search.
>>Searching “cutting board” on Etsy brings up over 45,000 listings.
>>If you search “personalized live edge cutting board” it brings up just over 200 listings.
From there, you could find a way to make yours stand out from what other people are making (e.g stain your boards a different color than the typical live edge cutting boards, use a different font, style, or technique to personalize the boards, add a special touch when they’re ordered such as all orders include gift wrapping, a personalized card and can easily be sent directly to the recipient since most are ordered as wedding or house warming gifts).
You first must know who you’re serving and then figure out which product features they care enough about. Your potential customers must be:
- Searching for your type of products online
- Looking for them everywhere they go
- Asking friends where they can find the specific type of product you make
- Willing to pay more money for the product feature you focus on
Your “IT” factor may be something your business was born with or it may be something you need to uncover.
Finding the right “IT” factor takes time and strategy. It’s not something that can be briefly covered in an article but I can get you started on finding yours through the free email course BEAT LAST YEAR’S SALES.
I’ll also walk you through the entire process in HOW TO SELL HANDMADE BEYOND FRIENDS & FAMILY.
STEP 3 – BUILD A STRONG BRAND
A brand is something a lot of business owners think they can ignore in the beginning and implement once they’re making more money.
But a brand is what helps you establish that “IT” factor. It helps tell consumers why they should choose your products. And it helps you make more money, so it shouldn’t be put off.
As you’ve probably heard (over and over): your brand is not your logo.
Your brand is represented through your logo, but that’s just one small piece of it. Your brand is about how your business and products make people feel (to put it simply).
Let me share a personal story about why your brand is important and how it can impact sales.
I try to use skincare products that are made with natural ingredients, so handmade products tend to be a good fit.
Finding handmade skincare products is pretty easy.
Not only do I have the big brands to choose from who keep their products fairly clean (e.g. Saje, Rocky Mountain Soap Company, Lush, etc.), but it’s almost a guarantee I’ll find a bath & body vendor at any craft show or market I stop by. Or, I can hop online and find handmade bath and body businesses through a quick Google or Etsy search.
Lots to choose from right?
But I recently discovered a local business selling skincare products and it was their branding that encouraged me to buy from them.
The local business is called Pura Botanicals (I’m not an affiliate or rep, I just love their products)
Their store is absolutely beautiful and it smells amazing.
I went with a friend, who had been following Pura Botanicals on Instagram and needed to make a special trip to purchase their Overnight Watermelon Mask. Just watch these videos of a batch being whipped up and tell me you don’t want to try it too (use the little arrow on the right of the image to watch the second video…it’s my favorite).
View this post on Instagram
I rarely miss the Overnight Watermelon Mask being handcrafted in production. It’s so beautiful and inspiring not to soak in and experience each nutrient brimming ingredient being poured and whipped into the pink, creamy magic. Thank you @purebeauty_yeg for making such a gorgeous, fresh batch yesterday as Linda, Landon and I stared at each step in AWE. The lab was bursting with layers upon layers of natural aroma and goodness. So dreamy. Get on my skin! Love how watermelon extract helps to repair sun damage, being so potent in lycopene and cell regenerating amino acids to maintain elasticity and stimulate collagen production. 🕊🍉⚡️ Oh, and how radiant is @withjustine in her @kindalinigown jumpsuit in this summer shoot?! 😍 With @emilyschutzphoto Visit us today from 10-6pm. 🦢#purabotanicals #celestialbeauty #sustainablebeauty #greenbeautyblogger #madeinalberta #madeincanada #crueltyfreebeauty #watermelon #handwhipped #botanical #plants #ethicalingredients #pinkmagic #vanilla #aromatherapy #dessertforyourskin #beautyjunkie #hkbeauty #hongkonggirl
I honestly had no plans to buy anything. I was unfamiliar with the store, what they carried, and was there for moral support as my friend spent $72 on a jar of cream she had never tried.
Why was she ready to drop that kind of cash on a product and business she was unfamiliar with?
Which means, the way Pura Botanicals wants their customers to feel is infused into:
- The exotic name: Overnight Watermelon Mask (another business may have named it “Watermelon Cream”)
- The beautiful packaging: simple jars with clean labels…even the way the cream is poured into the jar looks decadent, like a whipped dessert.
- The description: the way the product is described and talked about in their Instagram posts, product listings, and even by customers, sounds so dreamy and luxurious.
- The imagery: the way the product is photographed and the videos they share of the ingredients being whipped into a thick, luxurious cream.
Their entire Instagram feed, website design, product photos, store design, etc. are all layers that create an amazing brand and made my friend feel she had to try their products, and that they would be worth the price (they are by the way).
Their branding also hooked me. After I left the store, I couldn’t stop thinking about the amazing experience I had.
I wanted that feeling to be a part of my skincare routine.
>>I wanted to smell amazing after I applied their products
>>I wanted their beautiful jars and containers to sit on my bathroom counter
>>I wanted to create a skincare routine using all their products
I’m pretty lazy at bedtime so getting me to want to have a 3, 4, or 5-step routine to follow each night is a pretty big feat.
A week after I visited their store, with no intention to buy, I ordered a bunch of samples and plan to buy full-sized products of the ones I love (the Overnight Watermelon Mask is on that list…it’s amazing).
Even my shipped package felt luxurious with crisp, clean gold tissue paper I had to unwrap to reveal my beautifully packaged samples.
That’s all branding and what got me to:
- remember their business
- talk about it to other people
- take action and visit their website
- place an order for multiple products
- have plans to place another multi-item order before I even had a chance to try the first products
There’s a lot to branding, which I’ll help you uncover in HOW TO SELL HANDMADE BEYOND FRIENDS & FAMILY, but as a basic starting point, think about how you want your shoppers and customers to FEEL.
Once you figure that out it can be applied in so many ways.
And it has to be applied in so many ways for it to actually have an impact on sales.
I’ll show you all the places and ways to apply your brand in HOW TO SELL HANDMADE BEYOND FRIENDS & FAMILY but you can look at the example of Pura Botanicals and see some of the ways they’ve applied it.
Developing your brand does not have to cost you a lot of money, but not having a brand will definitely cost you.
It’s about the small details, such as:
- Thoughtfully chosen colors that consistently show up in your products, logo, packaging, website design, social media posts, etc.
- Choosing the right font for packaging/tags, craft show signage, website text, etc.
- Choosing the right words to describe your products and to use in social media posts.
- And so much more
Branding is responsible for:
- Why people feel like they “need” to buy from you
- Why they’ll remember you long after visiting your craft show table or online store
- Why they buy more than one product and become repeat customers
Having a brand is essential to your business, no matter how small or part-time it is. It’s worth spending your time developing it and putting a bit of money into because it will help you make sales.
STEP 4 – WORK YOUR NUMBERS
You must be conscious of how much time and money you’re putting into your business and how much money it’s bringing back in.
In THE SUCCESS PLANNER, I cover all the ducks you must have in a row to run a profitable and organized business and how to track time and money, as well as calculate the ROI (return on investment) of each task you spend time and money on.
The most important numbers you must pay attention to in the beginning are your profit margins.
If you want to build a business (i.e. you make money from it), you cannot make products that have little or no profit margins.
Imagine buying a product for $10 and then reselling it to someone for $10.
Sounds ridiculous right?
Why not keep the $10 in your pocket and skip running around town to buy and sell the product?
Most craft business owners think they’re making money with the sale of a product but they’re essentially doing a lot of work to break even, or worse yet, be at a loss and not even know it.
Let’s say I make a bag and the materials cost me $20 so I price it at $50. Sounds like I should be making a decent profit with that sale.
But let’s think about the time and money it took me to:
- drive to the fabric store
- look at different options
- get my fabric cut
- gather my notions
- stand in line to pay for my materials
- drive back home
Maybe that’s an hour of my time and a bit of gas money.
- unpack my fabrics
- get out my pattern
- make a bag
- photograph it
- tag it
- upload photos
- create a listing
- share it on social media
- answer shoppers’ emails about the bag
- package it once it sells
- drive to the post office
- stand in line to pay for shipping
- drive back home
Let’s say that’s 2 hours of my time.
To make my product and complete a sale from beginning to end, it requires 3 hours of time.
If I subtract my material costs ($20) from the retail price ($50), I’m left with $30.
If I divide that $30 by 3 hours of work, that means I’m earning $10/hour.
We haven’t even gotten into other business costs that aren’t directly associated with a sale but must be covered (e.g. website hosting fees, printing business cards, sewing machine maintenance, etc.), which would reduce my wage per hour even more.
$10 an hour is not enough for your time.
It also leaves 0 profits.
I may want to get paid $20/hour AND I definitely want money left after paying my costs and wage. $100 would cover the $20 for materials, $60 for my time, and leave me with $20 of profit.
Make sure you work your numbers when designing a product to get your costs down and your retail price high enough to cover your costs, pay you a decent wage, and leave you with a profit.
Just because you have a profitable product does not mean you’ll have a profitable business.
You must think about your profits for every part of your business.
When you spend time or money on a task, does that task result in sales? And if so, how much?
(There are some tasks that won’t return money (e.g. paying bills or taxes), in which case, you should be as efficient as possible.)
Let’s say you have $20 left from a sale after you cover all your material costs, hours to make the product, Etsy listing fees, and packaging costs. If you spend 5 hours on Facebook per week (at $20/hour for your wage), that’s another $100 you must cover.
Your time on Facebook must result in 5 sales to break even, and more than 5 sales for your time on Facebook to be profitable.
There is a startup period when you’ll have to put more time in than you’ll be paid for.
For example, the first time you post to Facebook you’re not going to make a sale. You must first spend time setting up your Facebook page, growing a following, and finding what types of posts your followers pay attention to.
When there isn’t an immediate return on time or money investment, you should be considering the potential for return on investment down the road and how to be as efficient as possible until then.
Consider your return on investment potential before you:
- Make a new product – does it align with your “IT” factor and your brand? Does it have a purpose in your offering? When I made pajamas, bags and aprons, nothing worked off each other. No one thinks: “oh right, I need a new apron” when they’re buying a new bag and no one uses pajamas, a bag, and an apron together.
- Have 1000 business cards printed – do you have a plan for how the design is going to ensure people hang onto it (HOW TO KEEP YOUR BUSINESS CARDS OUT OF THE TRASH) and a plan for how you’ll distribute them?
- Sign up for a craft show – is it a good fit for your products? Does the event’s marketing target your ideal customer? How are they marketing and what type of traffic are they expecting? How many hours is the event and do you have the potential to make enough sales within those hours to cover the cost of the event, including your wage for the hours you spend driving to, setting up, selling, tearing down, etc.? More on estimating the potential of a craft show in MAKE MORE MONEY AT CRAFT FAIRS.
When you’re short on time and money, you must be strategic with how you spend it. THE SUCCESS PLANNER will help you will all aspects of that and help you organize your business.
STEP 5 – SHOW UP
Starting a business is a lot of work, no matter how much time or money you have. But when you’re working on your craft business after you’ve already worked 8 or more hours or a 40-hour week, you need a bit more motivation to show up.
The key is to show up and do the work when you can, even when you don’t particularly feel like it.
You’re going to require a lot of motivation, but you won’t need it all at once.
Don’t wait for huge rushes of motivation; it will come in small waves. And the best way to not impede those small waves is to make sure you’re not overwhelmed.
If you follow the steps in THE SUCCESS PLANNER, you’ll define a goal, create a plan to reach that goal, and then make a list of small projects with even smaller tasks that ensure you reach it.
Those tasks should take an hour or two. That ensures you can complete them in one session and that they don’t make you feel overwhelmed when you think about starting them.
How much motivation do you need to clean your entire house, top to bottom, including wiping down baseboards, walls, and windowsills?
A lot right?
But how much motivation do you need to wipe down your kitchen counters?
Not as much.
You probably wouldn’t think twice about it. And once you’ve started a task, it becomes much easier to keep going.
>>Don’t make your to-do lists, goals, or expectations too big.
>>Don’t be too hard on yourself.
>>Don’t look for big waves of motivation, take action on the little sparks of excitement.
>>Don’t look too far ahead.
Your business will achieve success one tiny step at a time.
That was a lot of information to take in, but I hope it was helpful!
Those steps again are:
- CHOOSE ONE FOCUS for each area of your business (products, marketing, selling)
- FIND YOUR “IT” FACTOR – why do people need to buy from you? What do you have to offer that no one else does?
- BUILD A STRONG BRAND – how do you want people to feel when shopping with you, looking at your social media feed, buying from you, using your products?
- WORK YOUR NUMBERS – of the things you spend your time and money on, what’s bringing money back to you and what’s not?
- SHOW UP – you don’t need to put full-time hours into your business but you do need to consistently put time into it if you want to make progress.
And the point I want to stress is:
You cannot do it all, so what you spend your time and money on must be thoughtfully chosen.
There also isn’t a one-size-fits-all guideline for what a business must spend their time and money on.
This article outlines the areas I’ve found most important through years of running my businesses. Use them as a guideline but put your spin on them. Think about your goals and vision for your business, your strengths and weaknesses, your potential for return on investment and make decisions based on them.
If you’d like to keep the learning going and enjoyed this article, I think these two ebooks will be helpful to you: