If you have a keen sense of style and an artistic hobby to match, you may consider starting a crafting business. There’s practically no limit to what you can sell in these types of businesses. Some people focus on sewing or embroidery. Some knit or crochet. Others paint or sculpt commissioned work, and still others focus on woodworking or a similarly structural medium.
The exact medium doesn’t matter. What does matter is that you’re creating something, probably from scratch, with your own hands. And if you start a business using Etsy or a similar platform, you can sell those goods for far more than you paid in raw materials to create them.
However, there’s a little more to it than that. Crafting businesses are legitimate businesses, which means they, like all businesses, have a high rate of failure, and you’ll need to plan and run them like a business if you want to be successful.
The Key Challenges to Overcome
Before you start planning the logistics of your operation, be prepared for the most noteworthy challenges facing crafting business owners:
- Lots of people like the idea of selling their art or crafts online, which means you’ll be facing significant competition. Right now, there are more than 2.1 million sellers on Etsy alone, which means you’ll need to find a way to become more relevant, more visible, or more appealing than thousands of other sellers in your niche. There are some clear ways to overcome the competition, such as by differentiating yourself, pursuing an alternative niche, or offering a more compelling price point—which leads to our next point.
- Selling crafts doesn’t tend to be as profitable as other business models, and for several reasons. Many entry-level crafts are learnable and make use of inexpensive raw materials, so consumers aren’t going to value your time the way they would value someone who spent more time honing their craft, like a lawyer or doctor. The high level of competition also pushes sale prices lower, ultimately restricting the profit margins you can reap on a per-item basis. However, this isn’t a universal rule, and there are some strategies you can implement to keep your profits high.
- Marketing (and demographic targeting). To whom are you going to sell? Too many novice crafters end up creating a business with the underlying assumption that most people are going to want to buy their products, without the demographic research to back it up. Even if you do have a target demographic in mind, you’ll still need a strategy to make your business visible to them, which means you’ll need some kind of marketing and advertising campaign.
- Handmade craft businesses have a hard time scaling over time. While it’s not necessary to scale a business to more locations or a wider audience, it is one of the most efficient ways to increase your bottom-line profits. Because you’re creating goods by hand, there’s a limit to how much you can do in a day, so if demand starts to take over your business, you won’t have many outlets for long-term growth.
Don’t think of these challenges as reasons not to start a crafting business. Instead, they just need to be taken into account when you come up with a plan for your business.
Write a Business Plan
Speaking of a plan, you’ll need one—a formal one, in writing—if you want to be successful. Writing an official business plan will force you to research every area of business development, including your profitability model, your target demographics, your current level of competition, and how you plan to market and advertise your craft. Business plans do vary in length and in what sections they include, but any viable business plan should be thorough enough to provide a thorough blueprint for your business’s first few years of development.
Your document should be based on multiple sources. Start by looking online for free sources of information—simply searching for your craft online can help you discover competitors, and there are plenty of think tanks and governmental organizations that can help you better understand your key audience. From there, talk to other entrepreneurs in the craft world to check your expectations and get a more accurate assessment of what comes next.
After you’ve written your business plan, and you’ve used it to account for some of the biggest challenges that new crafting entrepreneurs make, you’ll be able to concretely start your business. This is where the fun begins. You’ll get to set up an online storefront, develop a name and a logo, and start selling your products—all with the strong backbone of a well-researched business plan to back you up.