Every Thursday evening from 8 to 9pm ET, IBN hosts #HandmadeChat, a Twitter talk show to help handmade entrepreneurs sell more products and make more money. While the show is aimed mainly at artisans, crafters and business owners who make and sell handmade consumer products, the topics and discussions can empower and encourage the growth of any small business.
Yesterday's chat was sponsored by The Box Co-op, where you can get custom boxes for your products at affordable prices.
Our topic was How to Run a Handmade Business. Our guest was, well, moi! Here are some of my best tips and answers to your most pressing questions about running a handmade business.
Q1 DOES RUNNING A HANDMADE BUSINESS DIFFER FROM RUNNING OTHER TYPES OF BUSINESSES?
There are more similarities than differences, but one big difference is that traditional consumer products companies buy products already made, mark them up and sell them. Handmade entrepreneurs require two distinct skill sets. They must make what they sell, and they must sell what they make.
Because they tend to be naturally creative, and they are more comfortable in a kind of “creative zone,” they must pay special attention to cultivating a business mindset so they don't focus on creativity, to exclusion of business. Handmade entrepreneurs are often first to lag in online marketing and tech. One of my personal business missions is to eliminate those impediments as reason for business failure.
Q2 WHAT SHOULD YOU DO AFTER DISCOVERING YOU'RE GOOD AT MAKING SOMETHING, AND WANT TO START A BUSINESS?
Before turning your handmade talent into a business, just stop and think. Don't get caught up in the enthusiasm and adrenaline. Assess first what kind of life you want to have. Most handmade entrepreneurs are so excited about what they can make and sell that they don't consider the impact that business ownership will have on their home lives and any traditional jobs they hold.
Look at what kind of life you want 5 and 10 years down the road. Does business fit in? If so, how? Do you have enough money to invest in starting a business? Enough time? Enough support from friends and family? Enough energy? Enough discipline?
If you think you do, read business books and blogs. Watch others do what you want to do. Do they like it? Are they making money and having fun?
The importance of this step cannot be overstated. Decide what's important in your life, and then honestly explore whether a business fits into that. It may. It may not.
Prepare yourself. Running a small business is far more complicated for people who do not prepare themselves
Q3 HOW DO YOU DECIDE WHAT PRODUCTS YOU SHOULD SELL?
Follow the money. The first products you sell should have high profit margins to fund your business faster. Sell the products that you can make easiest and fastest, and sell for biggest margin, without compromising quality. Learn the regulations (state and federal) that apply to the product you want to sell, and choose a product with regulations you can comply with.
Sell products in an industry that has trade and networking groups with people who will help you. Limit your product line. You can't spend all your time making things. You have to market too, and that takes time — and a lot of it. Start with a small, manageable product line. Being all things to all people is fastest route to failure.
You also want to look at how easily you can scale and grow your business in the future. Are the products such that you can charge a whole lot of money for each individual one so you can make them all with your own hands and still make a profit into the future? Or can you teach employees or contractors how to make the products as you grow? Or can you cultivate a high end brand name so you can charge more for the products you absolutely must make with our own hands? Or can you eventually license the brand to others who pay you to make and sell the products? Or can you add additional revenue streams through things like information products so you are not relying only on items made by you to make a living?
Q4 HOW DO I DECIDE ON A BRAND NAME FOR MY BUSINESS?
Choose a name no one else is using. Don't infringe on anyone's trademark rights. If you do so by accident, stop immediately when you find out. Check federal trademark database to see if name you want is registered or applied for.
Choose and lock down a name that is available on major all social media sites: Twitter, Facebook, Youtube, Pinterest, etc.
Don't chose a name with sentimental value if it makes no business sense to use that name
Q5 SHOULD I SELL HANDMADE PRODUCTS ON MY OWN SITE, OR ON ETSY, POPPYSWAP, ARTFIRE, ETC?
You have to know what you want in order to decide that. If you want to grow and brand, you need a branded site — at least eventually. but if you want to start small (which I recommend), use the other marketing sites to get off the ground. You could reserve your brand name and forward it to the other site until you're ready to launch your own site.
Market sites are easy testing locations, they cost little, and are a great way to get started and grow from there. They also have people already coming to the site and this is a big deal since one of the most challenging aspects of small business ownership is attracting people to your website. If you choose to use one of the market sites, be sure to take their training.
They may have a lot of traffic, but you have to share that traffic with thousands of competitors. Make sure you learn how to get the traffic to come to you page.
Q6 HOW DO I PLAN MY HANDMADE BUSINESS?
Plan your handmade business just like any other business. You need a business plan. Your plan should include everything any other business plan includes. The US Small Business Administration's business plan outline is a great resource.
Start small. The more narrowly tailored your product line, the easier business planning is. You may also want to hire someone (like a coach, mentor, etc.) to help you. It's worth the money.
Q7 HOW DO I FIT SOCIAL MEDIA MARKETING INTO MY BUSINESS WITHOUT BECOMING OVERWHELMED?
Reserve your brand name everywhere you *think* you might ever use it. Don't try to do all social media sites at once; pick one to start, add others as you lead your business forward. The most important social media outlets for handmade entrepreneurs are an email newsletter, a blog, a Facebook business page and a Twitter business page. (Reserve your personal name on Twitter too …)
Pick one social media site and get going, then add others as you lead your business forward. Do not get bogged down with trying to do all of them at once. As a basic plan, start with email newsletter, add blog next month, FaceBook month after, Twitter month after. That is not a perfect plan, but it's better than what I see many do — become overwhelmed and never start at all.
This is not an overstatement: if you neglect social media marketing, your handmade business will fail.
If you're looking to strengthen your blog, here is some of my best blogging advice
Q8 IS IT A PROBLEM THAT SO MANY OTHER PEOPLE ARE ALREADY SELLING WHAT I WANT TO SELL?
I receive this question a lot. It's a problem if you make it a problem. Don't do that. Watch what others do, but don't spend more time doing than doing your own thing. There was coffee before there was Starbucks. There were handbags before there was Kate Spade.
If people want what you are selling, they will buy it. Don't copy others. Get ideas from them and then put your own spin on things. Be original and you'll be the only one selling what you sell (at least at first).
Q9 WHAT ARE THE MOST IMPORTANT THINGS I MUST DO TO RUN MY HANDMADE BUSINESS FOR LONG TERM FUTURE SUCCESS?
First, set goals. Know what you want to do and then plan out your strategy with a business plan that you update regularly.
Have good quality, well made products. Don't sell shoddy stuff you throw together just to make money. Have good product photos. I'm not just saying that because IBN offers product photography services. I'm saying it because it's critical to your sales to have good pictures of the products you want people to buy.
Decide on a business model. Will you wholesale? Retail? Farmers market? All of them? Don't stretch yourself too thin.
Involve your family. For the ladies: If mama has a business, the whole family has a business! Make it easy and fun for people to buy from you. Whether a market site or your own, have an easy to use shopping cart and good product descriptions.
Schedule manufacturing days, sales call days, marketing days and then rotate them so you always know what to do next.
Finally, have a good time, don't be afraid to put yourself out there. When you brand yourself, you brand your business.
Q10 ANY LAST MINUTE TIPS TO HELP PEOPLE RUN A HANDMADE BUSINESS?
Have a strong support network. Play well with others. Be kind. Don't make enemies. The handmade world is very small.
When Is The Next #HandmadeChat?
The next #HandmadeChat will be Thursday, December 27, 2012, at 8pm ET, with Rachael Pontillo of Holistically Haute. Our topic will be How To Boost Your Health To Boost Your Business in 2013.
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