Running a handmade artisan market I meet so many talented individuals who have decided to take the courageous leap and turn their passion and talent into a business. However, whilst they have lots of talent, energy and drive, often these individuals have jumped in the deep end with both feet due to encouragement from friends and family without taking the steps to see if their new business venture is actually viable.
So, before you start taking your creations to market, setting up an Etsy store and getting stocked in shops, make sure you take the time to see if your products are profitable, and set up a business plan.
Here are 5 simple steps you can take before taking your hobby to market that will help ensure you have a successful time:
Take the time to price your products properly.
When setting prices for products we often see makers/artists/creators taking into account only the cost of their materials when setting their prices. There is so much more that goes into making your product that you need to take into account when setting your price; your time, overhead costs, studio hire, tax, marketing etc. You firstly need to figure out how much you would like to be paid for your time. You need to know how long it takes you to make each product as well. Once you have this information the general formula you can use to set your product prices is as follows:
- Cost of supplies + $x (total time spent making product at the hourly rate you choose) = cost price
- Cost price x 2.5 = wholesale price
- Wholesale price x 2 = retail price
Now the above is not the perfect formula for setting your prices, particularly when you are creating and selling a handmade product, but it is a good starting point. From here you can do market research to see what other people are selling similar items for and then adjust your prices.
Set goals and create a business plan.
When starting out on a business journey, if you don’t know where to go it is really hard to get there. You don’t need to set goals that are unrealistic, but having an idea of what you would like to get out of your business is important. Do you just want to be able to fund your hobby? Do you want to be able to turn your hobby into your full time income? Do you wish to only sell locally, or do you wish to sell globally? Knowing the answers to these questions will help inform your business and set goals that you can work towards.
It can also help you work towards your goals if you write yourself a business plan to follow. The Small Business Development Corporation has a great template that you can follow to start working on this. You can find it here.
Learn to do some basic book-keeping.
We creative types tend to want to focus on our making and leave all the nitty-gritty to someone else, which is fine. But if you aren’t keeping track of your income and expenditure you can’t know whether or not your business is covering expenses, turning a profit or is in the red. Remind yourself when purchasing supplies that purchasing items that you ‘might use one day’ is actually costing you, rather than saving you money, particularly if ‘one day’ never actually comes. Only purchase materials and supplies as you need them, and keep track of your expenses and income and regularly review this information to keep up to date on your businesses finances. Doing this doesn’t need to be complicated and you can utilise software that can link to your bank account to assist you with this (software such as WAVE, XERO or MYOB just to name a few).
You need to know a little bit about marketing to ensure your products get found.
Unfortunately the way that the handmade world works these days it is no longer enough to simply make your products and turn up at a market to sell them and have a profitable business. Due to the increase in technology we are expected to be available to our customers in multiple formats. Yes, markets definitely still have their place (and you should consider them as part of your marketing plan!) but you do need to be able to get the word out about your business and your products in other ways. These don’t have to cost you the world as there are lots of great resources available for free or at low cost:
- Be on social media. I recommend being on both Facebook and Instagram, but there are lots of other platforms available to use as well. You don’t need to be on all of them – just concentrate on a couple and do them well. Often people will look on social media for your business before looking for a website, so this is a good way to be found.
- If you have a product that is wearable – always wear it! Often people will ask you where you got something and then you’re a walking advertisement for your business.
- Invest in some business cards so that you can hand your information out to customers when you are at markets or if someone you bump into asks you about your products and business.
- Join Facebook groups – this is a great way to talk to people about your business and your products, as well as finding learning opportunities.
Do your research and don’t over commit!
Not all markets are created equal! Do your research before booking into an event to ensure it is the right market for you. So often I see people starting their handmade business getting very excited and booking into every market they can – sometimes committing to 5 events in one weekend. If you do this it is so easy to get burnt out, fall ill, not be able to make it to an event, or sell out of product and not have any stock. You can also end up spending money on stall fees that you don’t make back because the event you have booked into is not the right fit for your product.
Before booking into a market do your research to see if it is the right fit for your product and that your target customer will be in attendance. You can do this by attending the market in person, researching online, talking to other stallholders or calling and talking to the market organiser directly.
The handmade industry is a great one to be involved in and full of helpful and friendly people. We are seeing more and more customers committing to supporting our local makers and are excited to see you starting the journey as well. If you’d like to learn more about running a handmade business please visit www.erinmadeley.com
