Budgeting and Small Business Advice for a New Crafter
 

Congratulations you have decided it is time to tread those murky waters of
the crafting field and open your own online storefront. Opening your own store
whether it is a brick and mortar storefront or an online storefront can be one
of the scariest times in your life. Inside this article we will be discussing
the importance of setting a strict budget and a simple business plan to your get
crafting business off on the right foot.

As you begin thinking of your expenses, crafting supplies, advertising
expenses it can all seem too overwhelming, and at this point we lose a lot of
potential crafters. By being honest, and upfront with your budget and business
plan your business has a much better chance in succeeding. Keep your budget
grounded and allow for unexpected costs, or circumstances you had not thought
of. Part of keeping your budget grounded, is also realizing that with an online
store you may not see a large profit margin for the first year or so. The reason
being is you are competing with literally thousands of other talented crafters
out there, and you need to establish yourself in the online market before you
will start see a steady stream of traffic and repeat business.

Most crafters who start out have a low start up
budget or no start up budget at all. Keep this in mind as you start to advertise
your site, so be conservative as you first start out so you are not starting
your business off being in debt. The goal is that your crafts or crafting
service will eventually pay for all your expense including advertising, supplies
and marketing and still leave your something left over.

Make sure when first starting out that instead of making thousands of crafts
to sell to your clients only start off with a few, and see if your products are
selling. A lot of times crafters will blow their budget trying to stock up on
their crafts only to find out that some of the items are not big sellers. This
is where your research comes in to play. As a new crafter I always advice that
you research your market, meaning try to see if there is a market for the
particular craft you are wanting to sell, and is there a demand. Is your new
product something that is going to catch the eye of potential customers, or is
your product something that might be sitting on your shelves one year from now.
While doing your research you can email other crafters and ask them for their
opinion on your products. Are your products something the crafters think will be
a hot seller, or something that will spark the interest of potential customers?

As with any business there are going to be times
where you come up with a great craft or crafting service that you think will be
HUGE seller, only to find out it wasn’t. But the key is to not go over the limb
buying inventory so that your loss is a minor one. As with any business this
will always happen to us at least once, hopefully the materials you purchase can
be put to use on other crafting projects so you are not out of pocket a ton of
money in supplies. Start your business off on the right note by using a simple
spreadsheet or purchasing accounting software so you are keeping a very detailed
record of how much you have spent. This is crucial to keep you on your budget,
to help you price your items by knowing the exact cost of each item and it also
helps you to manage your marketing expense so you do not go over budget.

One of the things that I have noticed a lot lately with new crafters starting
out is that their budget is so tight they do not allow for any advertising
expenses. This could your undoing of your business. In a sea of literally
thousands of crafters, how is someone going to find your site unless you market
your site through advertising? Not only should you utilize all the free
advertising venues I have discussed in the past, but you should also advertise
your site on craft marketplaces to help draw targeted traffic to your site. As
rule of thumb it is always good to allow twenty percent of your budget for
advertising costs. This will help to improve your search engine ranking by
bringing targeted traffic to your site, and also help to get your site seen by
potential customers.

As your business starts to develop you can start to adjust your budget to
allow more money for advertising costs by cutting down on your inventory costs
as your products will already be made and ready to sell. The important rule is
do not go over budget or dig yourself a hole your business cannot pull out of.
By being conscious of your spending, you can keep your budget in tow and allow
yourself to start running a profitable business in no time.