January 6, 2016

Why So Many Handmade Businesses Fail



January/February is a tough time for most businesses. The rush of the holidays are over, we all take a much needed break and shut our minds off from business mode. This can make coming back hard, not to mention, the response isn’t there like it was a few months ago making motivation hard to find. A lot of people question their small business and whether they want to move forward with it.


Through Made Urban I am constantly discovering handmade businesses. I always hate stumbling across an older article about an amazing artist only to follow the link and find their website down and their business closed up. There are a number of outside factors that determine whether a business will stand the test of time or not but what’s important is that the owner is set up properly and maintains the passion and drive needed to push through the hard times. Here are a few reasons businesses shut down and what you can incorporate into your business practices.


1) They treat it as a hobby

If that’s what it is for you, that’s great, but if you do in fact want it to be a business, you need to treat it as such. Most people fall into their handmade businesses, which is why they don’t take the steps they would if they were opening say a restaurant or brick and mortar store. You make something as a gift, your friends tell you to start selling them, you sign up for your first craft show and go from there.


It’s great to get excited and take action but be sure you take the time to write up a business plan, register your business, get the proper permits, draft a partnership agreement and set budgets. Not only does this get you organized and set up for success, but it also forces you to be committed. When you invest the time and money it takes to get properly set up, you’re less likely to throw in the towel on a whim.



2) They stop setting big goals

If you’re feeling bored in business, think about what would excite you and
ignite some passion. In the beginning, attending your first craft show and bringing home a full cashbox puts you on cloud nine. Once you settle into that phase, what’s the next step that will give you that “I can’t believe it!” feeling? Maybe getting into boutiques, expanding outside the province/state, being featured in your favourite magazine or even getting into a major retailer.


If you’ve reached your capacity and no longer have goals of expanding, what about branching into a different area? Adding some new products to your line, working with new materials or even partnering with another business could be lofty aspirations. Dream big and be realistic about where you want to be in 1 or 2 years. If your goals don’t excite you, think again and set new ones. Once you’ve decided on something that gives you butterflies and keeps you dreaming, move on to #3 and work on the skills you’ll need to get there.



3) They get comfortable

This one goes hand in hand with #2. Continue to challenge yourself in your craft each day. Take new classes, learn new techniques, make new products and meet new people. Making the same products and going to the same craft shows becomes safe, easy and comfortable but that’s when we tend to get bored. It’s the reason people get sick of any job; they feel stagnant. They’re not striving towards a new promotion, achievement or goal and day-to-day tasks become mundane.


Think about the last corporate job you worked at. When you first started, everything was exciting and new. You had to learn about the position, the people, routines and rules. When you wanted to change jobs or positions you had to brush up on your skills, work on your resume, prepare for an interview and ultimately move to a new area or office full of new people. All these things keep us thinking, learning and growing; an important part of life. Consider a shift that will give you a jolt and shake up your business life a little.



4) They’re not offering anything different

Your head needs to be in the game to keep your business going but you also need customers to be backing you and they won’t do that if they can find the same items through another vendor. Ask yourself this: if you found 2 businesses selling identical products, which one would you choose to buy from? Probably the guy with the lower price. You’ll never keep a handmade business going by competing on price so it makes the decision easy: offer something different.


People fall in love with handmade items because they’re unique and reflect the maker’s personality. Be sure your products show off your style; could people recognize one of your pieces if it didn’t have any branding on it? They should be able to. Each of your items should have a specific look; maybe that’s a finishing detail you always add, a set of colors you use or a material you always work with. Work on perfecting your products and offering something shoppers can only buy from you.




5) They’re not willing to adapt

You have to listen to your customers and make changes to your business accordingly. They may not be directly telling you what they like and don’t like but you can get a really good idea with your sales, Facebook posts, website traffic, etc. Where is your audience gravitating towards and how can you give them more of it? If you sell necklaces but people like and share a photo of a ring you made when you were playing around; listen to them. They may be indicating that they love that item and you should make more options, that they’re excited about seeing something different from you or that they really like the stone you used. Pay attention to any common denominators in your more popular products, posts or pictures to narrow down what your fans want to see more of.


You also have to adapt to the market; if you were first on the scene making a product but now it seems like everyone is making them; don’t be stubborn! Be open to moving onto something new. We can never be too attached to our ideas in business or stay stagnant. We really do have to take our egos out of it and be willing to do what’s best for our customers and our company. There will always be someone on your heels, trends will change and new techniques will arise. Keep moving, improving and adapting.



We all want to be happy and when we really think about what makes us happy, they’re the things that excite us. Find ways to stay excited about your business each day to ensure it stands the test of time.


Do you sell at craft shows?

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