Some people believe that craft business owners should spend all their time surrounded by their favorite hobbies. But there are many things that go into legally starting a craft business and running the business. The following article tells you how to start a craft business and turn your passion into a source of income.
The artisanal craft industry in 2022
The craft trade industry is booming in 2022, with consumers seeking unique products and online marketplaces making them easily accessible. However, not all craft businesses operate exclusively online. There are also craft fairs, flea markets and local retail stores that may sell handmade items.
Why You Should Consider Starting a Craft Business
If you are considering becoming a new craft business owner, here are some benefits to consider:
- Turn your passion into a career: If you want to start a craft business, it’s probably because you already have craft skills that you value. It can be a perfect way to create work that you actually enjoy.
- Enjoy flexible hours: Whether you sell online or in local consignment stores, you likely produce most of your products from home on your own schedule. This can leave room for work/life balance or working full-time while getting your new business off the ground.
- Get started for little money: Starting a crafting business usually only requires a few supplies and maybe an estate or market fee. It can be one of the cheapest industries to break into.
- Create multiple streams of income: It is possible to create several product lines or offer your products in different ways to diversify your income. For example, you can gift finished goods as well as overflow crafting supplies that you haven’t used.
- Create a community: There are many ways to involve others in your craft business. You can ask your children to help you prepare your orders or work with local friends and events. Many craft entrepreneurs also benefit from active online communities.
Start a craft business in 12 simple steps
Every craft business can look a little different, depending on your niche and skill level. However, here are some basic steps to help you grow from just a hobby to a full-fledged business.
1. Research your niche
Most craft businesses have a niche, whether it’s knitted items or hand-carved wooden figurines. Get to know other businesses that sell similar items, so you know where there may be openings to differentiate your own offerings.
2. Choose a name
A name tells customers what to expect from your business and can help your brand stand out. Search your state database and online to make sure your choice isn’t already taken.
3. Create a formal business plan
Your craft business plan should detail everything from what you will sell to how you will reach customers. There are plenty of templates online to get you started.
4. Select a business structure
Your business entity determines how your business is taxed and its legal structure. For example, sole proprietorships are generally treated as individuals. But a limited liability company separates your business assets from personal assets in case something goes wrong.
5. Obtain a business license
Depending on what you sell and where you operate, you may need to register your business with your local government. Check with your state and city clerk for the relevant forms.
6. Choose how to sell products
Do you plan to sell crafts online or use other means like craft fairs? You can even use a combination of strategies to reach customers.
7. Open a business bank account
Separate your business finances for easy tracking. Open a bank account and start tracking income and expenses.
8. Sources of supply
Think about the items you need to build your inventory, then stock up on supplies. Consider wholesale suppliers to save money on products you need in bulk. Also, don’t forget shipping supplies like boxes and labels!
9. Build Inventory
Then it’s time to perfect your craft and create enough items to build your product line. Find places to store your products before they sell out.
10. Photographic Products
If you’re selling online or creating marketing materials, you’ll need photos of your products. Handmade products usually appear on a simple white background with natural lighting. Practice photography or work with a professional to take eye-catching photos.
11. Prize Items
To determine prices, calculate the cost of each in terms of supplies and labor. Then compare similar items and do research to determine market demand.
12. Create a marketing strategy
With the basics in place, it’s time to market your business. Consider doing social media marketing, buying ads on marketplace sites, or getting press attention in your local community.
How much does it cost to start your own craft business?
The costs of starting a craft business vary greatly depending on the type of products sold and whether or not you need a physical location. Those with an online store can often start a craft business for less than $100. Those that require expensive inventory or physical location can require up to $50,000.
Are craft businesses profitable?
Crafting can lead to a profitable business, especially since these businesses are usually inexpensive to start. To keep trades profitable, you need to set prices high enough to cover all expenses. Don’t just consider your hardware, but consider your website and marketing costs, your time, and support costs such as shipping and storage.
How can you start an online craft business with no money?
Selling online using free marketplace sites can allow you to start a craft business with no money. Just use recycled materials or things you already have around your house. Then sell to friends or list items on free sites or social media. Then use your earnings to create your own website or list products on paid sites like Etsy and Amazon.
Image: Envato Elements
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