Description

Tips on Starting a Handycraft Business

Whether part-time or full-time, starting a craft business offerstwopossibilities: (1) the production of handicrafts, (2) theselling ofhandicrafts. This factsheet focuses on producinghandicrafts.However, before starting either type of operation:

Know with some certainty that people will want and will buyyourhandicrafts.

Understand all the requirements and have reserve capital tomeetexpenses before you are able to produce sales and earnaprofit.

Understand the basics of managing, bookkeeping, purchasingandadvertising.

Studio Design and Location

Your studio must fit your needs in terms of size,services,security and safety. Aim for efficiency, while creating apleasingspace to work in and visit. Consider a home studio.Register abusiness name and mailing address and get a separatebusiness phoneline. This allows you to:
1.Operate with lower overhead and start with a smaller amountofcapital.

2.Work flexible hours and begin on a part-time basis.

3.Claim a portion of home expenses as tax deductions.

4.Eliminate travel time and hassle.

5.If operating at home is not an option, consider leasingaseparate location. Consult with a lawyer before signing anyleaseagreement. Locate in an area with lots of traffic andconvenientparking. Make sure that any noises, fumes and traffic yougeneratein your work do not affect your neighbors. Also ensure thatthebuilding:

Offers room to expand, shelving and storage space, an officeandvisitors area, wide doors to accommodate materials andsuitablepick-up/delivery areas.

Has an efficient electrical service and ventilationsystem,especially if you use kilns or toxic solvents, plastics orchemicaldyes.

Selling Your Crafts

You can sell your crafts directly from your studio,orthrough:
Retail stores
Specialty craft, gift, or department stores are the mostpopularways of selling crafts, especially if you produce inlimitedquantities. Stores usually sell your work at double yourprice.Craft stores have traditionally sold mostly on consignmentthey payyou only after they sell your work, keeping 30-40%. Thisischanging though as artisans gain more business experience.Becareful with terms and conditions of consignment sales.
Galleries

Choose respected, well-known galleries. Put all agreementsinwriting before delivering your work. Ask for an individualshowing.These are usually done on a consignment basis, with thegallerykeeping up to 50%. You may be asked to pay for invitationsorrefreshments.

Agents

Agents are not commonly used for handicrafts but incertaincases, they can help to promote and expose your work.Commissionsusually range between 20 and 50%.

Prices

When pricing your handicrafts:
Cost approach: add up all your expenses, including rawmaterials,labor and overhead costs such as rent, heating,advertising, aswell as a factor for profit.

Comparative approach: talk to other artisans andretailers;compare the prices of similar items in stores andgalleries.

Select a price from within the price range formed bytheapproaches in steps 1 and 2.
Purchasing Materials
Find suppliers of materials by checking the Yellow Pages,trademagazines and local craft associations and organizations.

Compare prices, shipping costs and volume purchasediscounts.

Plan in advance, combine orders and ‘group-purchase’ withotherartisans.

Take advantage of possible sales tax exemptions if buyinginlarge quantities.
Advertising

A reputation for fine work is the best form of advertising.Whengetting started however, consider these methods:
Rent display space at a shopping mall for a weekend.

Hold open houses which can also be helpful for developingmailinglists.

Design business cards and pamphlets which describe andillustrateyour work.

Send press releases to the feature editors of newspapersandmagazines.