August 27, 2016

Is a Handmade Business Right For You?


start a handmade business

Are your friends and family members loving something you make so much that they are encouraging you to think about starting a handmade business to sell it? If so, a handmade business could be for you. Or it could not be. It depends on a lot of things. Selling what you make can be a great way to get your entrepreneurial feet wet.

You’d be in really good company, and there is no shortage of places to sell your handmade goods online.

You can even secure your own branded website for as little as $20 to get started. On top of that, even the smallest cities and towns are home to local fairs and shows that are perfect for your handmade wares. On the other hand, many handmade entrepreneurs are gob smacked when they discover what it really takes to serve as maker and seller at the same time. Before diving in and starting a handmade business, you might want to ask yourself these questions to see if becoming a handmade entrepreneur may be right for you.

Starting a Handmade Business? Ask Yourself …

1. Do I Want to Make the Same Things Over and Over Again?

When starting a handmade business, everything is fresh and new. Your stress level is fairly low because there are no customer service issues and no broken website links to fix. You can make what you love to your heart’s content. But after the orders start rolling in, and you have to continue making the exact same thing, the exact same way, over and over again, boredom and monotony can creep in.

While customers generally like to see new things introduced from time to time, most fall in love with a few things that they want to purchase over and over again — which means you have to make them over and over again. This is especially the case if you decide to wholesale your products. Consider this your warning, and if you are easily bored by nature, consider hiring someone to make products for or with you so you are not stuck with the monotony by yourself.

2. Do I Have Enough Money?

It is less expensive than ever to start a business today because the Internet and new technologies have lowered the barriers to entry. It is also more expensive to start a business today because you now have to stand out in a crowded market place full of people who can start a business because of that decreased cost.

A decade ago, handmade products were not available everywhere. That is no longer the case. While the pie of buyers is huge and there is plenty to go around, you still have to invest financially in your brand in order to make it stand out.

Before starting a handmade business, do some research on prices for things like product photography, logo and graphic design, label printing services, booth design (if you will be doing shows), website design services and ingredients and product components.

How much money you’ll need to start will vary depending on the business, but I would caution against starting any business without a minimum of $5,000 (that’s a low ball) to invest on these and other expenses. If you don’t have that much, consider saving it up before you start, or launch with an itty-bitty product line that won’t eat through your cash early on.

3. Am I Willing to be Patient?

Once you launch your business, you will no doubt continue to hear the voices of your friends and family members singing your praises and telling you that your products are the best they have ever tried. After a few weeks, you’ll realize that you cannot live on their praises or their purchases, but will need to influence complete strangers to come to your booth or website and part with their hard earned cash.

It is a slow and steady climb. You’ll need to do the same right things over and over again when no one is paying attention, and you’ll need to recover from some pretty big mistakes. You can do it, but it does not happen quickly. Expecting it to will make you depressed and demoralized. Be prepared for no one to care for several months before you start to see sales begin to come in on a fairly regular basis.

4. Do I Know (or Am I Willing to Learn) the Applicable Rules and Regulations?

All industries, consumer products in particular, have rules and regulations participants of that industry are expected to follow. While there may be some exemptions for handmade or small producers grossing under a certain amount in sales each year, many regulations apply equally to all industry participants. You do not get a pass just because you are small.

If you are exempt from any regulations, you can bet that the exceptions are specific and narrowly defined. Consumer protection agencies at the state and federal level have a keen interest in protecting consumers from unsafe products, so if boning up on the laws that apply to your industry is not on your to do list, keep your day job.

5. Am I Willing to Embrace Technology?

One of the things I hear handmade entrepreneurs say about themselves time and time again is that they are not technologically savvy. This kind of attitude will kill your business before it even starts.

While you don’t need to be the Steve Jobs of the handmade world, you do need to embrace technology in ways that will help your business grow. At a minimum, you need to learn how to blog, how to manage an email newsletter, how to maintain shopping carts, how to adjust the size and Web-friendliness of images and photographs, and how to use at least three social media outlets.

If you cannot do all of those things, or are not willing to learn quickly, you will need to hire someone to do them for you or your business will fail.

For the record — that is not an understatement.

6. Will I Put Myself Out There Personally?

No matter what you make and sell, you are not the only one making and selling it. That’s why you will need to leverage your self in order to sell your products. Anyone can copy your products, but no one can copy you. If your plan is to stand on the greatness of your products alone, your plan is not a good one. Include yourself in the marketing mix by using services like Periscope and YouTube to tell the story of your brand.

Put pictures of yourself on your About Page and in your newsletter and blog, and smile regularly for the camera via Instagram, Facebook, and Twitter. People love to see a bit of the behind the scenes of your business. Invite them into your world and they will be more likely to stay a while and see what you have to offer.

7. Do I Have Thick Skin?

If a customer does not like your product, they will tell you so … and not always in the nicest way.

If you ask some of your business peers to provide feedback on your new logo or website, get ready for some serious honesty. If you cannot take this kind of heat now, get ready to be roasted when you start your business. When you are dealing with the public, you never know what is coming.

People can be rude and disagreeable. They will tell you that your products are too expensive and that they can make them themselves. They will buy your products and tell you that they stink and they want their money back. You will ultimately have to deal with all of this with a smile. Be prepared to put your hurt feelings aside and just push through. If you don’t, the weight of your feelings will eventually crush you … and your business.

Asking (and honestly answering) these questions in advance will save you tons of heartache, time and money, and you will be better prepared to lead your business over the long term.

What did I miss? What other questions do handmade entrepreneurs need to ask themselves before starting a handmade business?

Soap Image via Shutterstock

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Donna Maria Coles Johnson


Donna Maria Coles Johnson Donna Maria is the founder and CEO of the Indie Business Network, a trade organization providing mentoring and coaching services, and affordable product liability insurance, to makers and creative entrepreneurs across North America. An award-winning small business advocate, Donna Maria has hosted the Indie Business Podcast since 2005. She blogs at Indie Business Blog.

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  1. All great considerations. I would add that many hand-made businesses need to very clearly understand their expectations. Do they want this to be a nice supplemental income that they spend a few hours/week on or are they looking to quit their day job and make this a full-fledged business. This is important because the requirements of the business will be vastly different depending on the goal.

  2. All good points! My addition to your advice would be that the new entrepreneur think about pricing – both retail and wholesale – before they set up shop. One needs to know how much supplies will cost, as well as determining their hourly or by the job rate before putting a price tag on their goods.

    • This is excellent information, Donna Maria. It’s so important to consider these things before hand AND plan. The costs involved, the potential boredom, having thick skin – oh my, I can relate to all these things. As Donna Berlanda mentioned, pricing is one thing most makers do not get right in the beginning. It’s the most important thing to truly KNOW what that profit margin is, from the beginning, because sure enough wholesale selling opportunities come along whether we plan to wholesale or not and that’s when we suddenly realize we’ve been flying by the seat of our pants. Most of us start out just as you described, selling to family and friends, and we typically price it accordingly — by what we *think* people will pay. It turns out it’s always worth so much more. That is, as soon as we figure out who our target market is. But that’s another story.

      • Donna Maria Coles Johnson

        Thanks for sharing that, Deb! I agree with everything you mentioned. You can do so many things right, and still lose money if things are not priced to make a profit, and to move. It can be a tricky balance, to have the price high enough to make your profit, yet not so high that it’s priced outside of your target market. Once it’s done though, it’s really great to see how a business can soar! Thanks for sharing your feedback on that important issue.

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