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How to Start a Craft Business – A Step-by-Step Guide

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If you’re looking for step-by-step guidance on how to start a craft business, you’re in the right place.

The COVID-19 pandemic has impacted so much more than health. With the recent pandemic, many people have lost their jobs, many people are working from home, and lots of people have time on their hands.

As a result, there’s been a resurgence of crafting. Sites like Pinterest, Etsy, and Google are seeing more searches than ever for DIY and crafting topics.

More people are looking to do things themselves to cut back on expenses, and others are looking for opportunities to make money in new and creative ways.

You might be able to relate.

If you’re here, it’s likely, you’re passionate about crafting, and you’re trying to decide if you could “craft and make a living” at the same time, and I’m here to tell you, “yes, you can!”. In this article, I’ll be answering common questions about craft business like:

  • Can you make money crafting?
  • How do you make money crafting?
  • Can a craft business be profitable?
  • and, How to get started with a Craft Business?

When you’re done reading this article, it’s my hope that you’re empowered, and ready to pursue a new area of life that you’re passionate about.

What is a Craft Business?

The craft industry includes anything that’s handmade, so it includes a wide range of products. A craft business is any person or organization that takes handmade products and makes money from them.

Crafting Hobbies

There are so many different crafts, but as you can see below, a resurgence of interest in crafting has taken place in 2020.

Crafting hobbies include:

  • Scrap-booking
  • Handicraft
  • Sewing
  • Knitting
  • Crochet
  • Embroidery
  • Cross-stitch
  • Needlework
  • Painting
  • Drawing
  • Calligraphy
  • Wordworking
  • Quilting
  • Weaving
  • Beadwork
  • and so many more

Hobbies vs. Business

A hobby is something that’s done for personal satisfaction, and it’s done at the frequency you want to do it. For example, if you like to sew, you may sew things you like, and do it whenever you like.

When you decide to convert a hobby into a business, it comes with:

  • Additional discipline – You have to create at the pace of the market demand versus as often as you want
  • A customer-centric product development focus – As a business owner, you have to be more interested in what the customer wants to buy versus what you want create
  • And, you have to be more disciplined about things like how much it costs to create the product, legal liability surrounding the products, how much it costs to ship the product, how much are you selling for, how are you selling the product, how will you get people to know about you, and more.

The Traditional Way to Start a Craft Business vs. The Modern Way

Just a decade ago, the process for starting a craft business was much different than the opportunities available today. The traditional way of starting a craft business meant that you’d:

  1. Build an inventory – You’d have to create your crafts in enough volume that you have something to sell
  2. Find venues – You might be looking for trade shows, retail stores, flea markets, and other places to sell your handmade products
  3. Manage the fulfillment of clients – After you’ve built your inventory and found a venue, then in a traditional handmade business, you’d need to manage client satisfaction, billing, shipping, returns, questions, and other client support tasks.
  4. Do administrative tasks – And, you’d have admin tasks like patents, copyright, trademark, incorporation, finding venues, coordinating new events, and more.

The Modern Way of Starting a Craft Business

Now, with the growth of the internet, startup entrepreneurs are entering into craft businesses with less overhead costs and larger potential markets. Now, rather than solely selling your crafts at a local flea market, it’s possible to build an audience, sell them online, and reach people all over the world. The opportunities are much different.

The amount of inventory required by a traditional craft business is no longer required today because you can create products based on the demand you’re receiving, and actual purchases. Online shoppers simply need an image that represents the handmade product you’ll be making and a good description, and they can decide whether or not to purchase–this saves a lot of time and money because craft business owners don’t have to create lots of inventory to see what will sell versus what will not. For this reason alone, the startup costs of a modern day craft business startup can be reduced drastically.

Now, rather than paying fees for venues and inventory, you can focus more of your startup budget on advertising, setting up a website, and getting the word out online.

Can a craft business be profitable?

Like businesses of other types, a craft business can be profitable if:

  • The income
  • Expenses
  • and Sales volume

Work well enough mathematically that you still have money after all is done. For example, let’s say your craft business earns $5000 per month in sales when you sell 50 of your woodworking craft kits. You spend $2500 on website hosting, advertising, materials, equipment, processing fees, and shipping, which leaves you with $2500. After you pay yourself $2000 and pay your taxes $250, then the profit of $250 is what you’d have left.

It’s possible, but you have to be willing to budget regularly, be disciplined, put in the work, and make good finance decisions.

Successful Craft Business Stories

With the growth of the internet, more and more craft businesses are finding ways to connect with people who love what they do. There are countless examples of people who have set up a blog, built an audience, and sold products and services. Here are a few:

  • Laura Burton from Mom Envy has 4000-6000 people coming to her website every day. From that, she has 100-400 people signing up for her email list daily, and makes $2000+ in monthly income. Despite the fact that her blog earns significantly less per visitor than norms, she still makes $2000/mo and considering the amount of visitors to her website daily, she’s working to improve how her website is monetized, so she can get better results.
  • Sarah Titus makes and sells printables to help with home organization, productivity, and entertainment. She started building an audience online, and later began selling the printables. Her business earns more than $200,000/mo with her crafts.

How to Start a Craft Business – Step-by-Step

If you’re interested in starting a craft business, these are the modern-day steps you should take…

1. Choose a Niche

It’s important to decide who you’ll be helping with your craft. Are you going to be selling woodworking crafts? Who would need the woodworking crafts you create? Who might be attracted to them?

It’s important to choose an audience you’ll serve, and focus on solving their problems with your handmade products, then expand from there.

Related:

2. Build a Website

Once you’ve chosen a niche, it’s important to build a website that can help you grow an audience. A craft business can’t make money if people don’t know about your handmade products, right? By starting a blog, you can introduce your business and the products you create to people all over the world.

You can test out how easy it can be to create a WordPress website with the website builder below. Choose a name, it will tell you whether it’s available, and you click the “build it now” button, then…Voila…you’ll have a WordPress website that can be transferred to any custom domain name you want.

3. Monetize the Website

As a craft business owner, you have to think like a small business owner. Small businesses have products and services they sell: whether their own or someone else’s. Once you’re website is built, you have to make it clear what you sell, so your website visitors can make purchases.

How do Craft Businesses Make Money?

Successful craft businesses make money in a variety of ways including selling physical products, selling affiliate products, finding sponsors, selling digital products, selling services, and offering advertising on their website or elsewhere.

The Importance of Diversification

Regardless of what business you’re in, it’s important to diversify your income. There may be times where one of your products is selling very well, and it’s times like that where entrepreneurs become complacent, but what happens when it’s no longer selling as well?

When you diversify and have other things that are bringing in income, then it helps to stabilize your cashflow, and prevents you and your team from having income roller coasters.

Physical Products

As a craft business owner, it’s likely, you have physical products that you sell because this is a common way for craft businesses to make money.

Affiliate Products (#1 Recommendation for Getting Started)

In addition to your own physical products, you can also sell affiliate products–these are products and services that could help your audience, but you don’t create them. You can sell products from other craft businesses. You can sell affiliate products you use to make your crafts. There are so many options of what affiliate products you can sell, and the top benefits with affiliate products are:

  • You don’t have to do customer support
  • You don’t have to manage the fulfillment of the products and services
  • You can use affiliate products to validate business ideas
  • You can join affiliate programs for free
  • and, You get a percentage or dollar amount from each sale (and sometimes, you make money simply by sending a lead without selling anything)

Sponsorships

There are companies who are looking for the same customers you are. They likely have products and services they want to reach an audience like yours, so they’d be willing to sponsor a post, event, or other content you make, in exchange for a mention of their brand or a promotion they’re doing. Sponsorships can be an alternative way of generating income in a craft business.

Digital Products

Maybe, you want to teach others how to do crafting like you do? Maybe, the crafts you do connect to habits that need to be changed, and you can make a course to show people how to make the full transformation? For example, maybe you sell home management printables that show people how to keep their homes clean, but you know it takes more than a checklist to keep a home clean, so you create a course.

Digital products include:

  • eBooks
  • Online courses
  • PDFs
  • Audio downloads
  • Video content
  • Flyers
  • Graphics
  • and more

Digital products are nice because you can create them once, and they don’t require new materials and equipment to distribute them. Instead, the same download can be sold time and time again, which can make it very profitable.

Services

As a craft business, you could also offer services like:

  • Consulting
  • Custom crafts
  • Custom blueprints or patterns
  • Or even custom projects

Advertising

Once you have an audience, the opportunities for making money with advertising increase. Similar to sponsorships, advertisers who want to reach the same audience as you will likely pay to display banners and ads that your audience could see.

4. Create Content

Once you’ve built your website and decided on your monetization strategy, then it’s important to create content on your website: beginning with your About me page, your privacy policy, and your first few blog posts. Once your initial content is out, then it’s important to create blog posts that would be helpful to your potential customers. These posts can help explain solutions to problems that might bring them to you, help overcome objections before making a purchase, and more.

5. Build an Audience

As you’re creating content and sharing it with people who need it, you’ll be able to build more and more trust and interest. When you have things on your website for sale, the attention, trust, and interest that develops can be translated into sales and income.

6. Incorporate

As your business grows, there’s also more potential for lawsuits and higher taxes. For this reason, it’s important to incorporate to help mitigate some of the legal and tax liability that comes along with running a growing business. You can get help with incorporating from a legal service like Incfile.

7. Add E-Commerce

When you have an audience and you have products you want to sell from your website, then you have to add e-commerce functionality–this means people will be able to shop and checkout from your website. E-commerce solutions typically add onto your overhead costs, which is why I haven’t recommended it until after you’ve built an audience, and ideally, after you’re getting affiliate sales that prove you’ve attracted people who are ready to buy from you.

Recommended Resources:

8. Make Money

When you have a website, you have people visiting your website, and you have products and services to sell–that’s when your craft business should be making money. You can build a very profitable craft business with this formula.

Conclusion

You came here looking for advice on how to start a craft business, and now, you’ve seen how it’s done broken down into 8 simple steps. If you really want to start a craft business, and make money doing something you’re passionate about, don’t hesitate. Join me here for coaching, networking, and to learn the skills you need to build a thriving craft business online.

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