13 Easy Steps to Start a Craft Business Now

 

To start a craft business is like starting any other business despite some differences in startup requirements. You might have the skills but you don’t know where to start now here you are.

No matter how good you’re at making crafts when you don’t have exposure it will be hard for your efforts to get rewarded.

You need to know how to successfully start a profitable crafts business from scratch in the tech world of today. A lot of people are making money from crafts through online platforms like Etsy, Zazzle, storenvy and more.

People will get to know about your creations when you start building an audience for real businesses to earn money. However, a crafts business needs time to grow until it becomes the first call of the mind as a brand.

Anyone interested in starting a craft business, it’s not as hard as you think to get started to get the most out of it. But if you’re not passionate about it, honestly this is not for you.

Pros and Cons of Starting a Craft Business

A craft business also has pros and cons that you must peruse through when you’re just starting up. So, let’s briefly look at the pros and cons below.

Pros

• You can work at your own schedule
• High profit margins since you’re the manufacturer
• Low startup costs

Cons

• There’s stiff competition in the craft business
• Making creations needs a lot of time
• Fluctuations in material costs
• Some people are ignorant about crafted creations

How to Start a Craft Business

There are easy steps to start a craft business you need to follow to succeed to make money today. In relation to other businesses, you have to be passionate about the new start-up to effectively follow the startup process.

Where other businesses require millions of dollars to begin operations, in a craft business you need less than $10,000 as investment capital. And without further ado, let’s jump right into the step-by-step setup process.

1. Market Research

Since the craft business is your new start-up, doing market research is paramount in ascertaining whether it’s right for you before investing any money.  Sure, to streamline the startup process researching the industry should be prioritized if you’re to take advantage of any available opportunities.

Questions like where can I start? How can I start? Who is my competitor? How much do I need to start? And more are briefly answered here.

Without researching the business you want to start and the industry, it’s hard to predict the future. You must know where you’re going to lay a strategic plan that will enable you to achieve your goals.

In summary, carrying out market research will give you a clear picture of the strengths of your competitors, weaknesses in the industry, opportunities available, and threats in the business.

2. Pick a Niche

To effectively start a crafting business requires niching down for brand recognition in the industry. There are many crafting business ideas but you must choose one that is right for you to start as below

• Basketry – This is the art of making baskets out of grass, bamboo, and other synthetic materials.
• Ceramics and Pottery – It’s where pots, vases, and other kitchen accessories are made out of clay.
• Flower Crafts – Here crafts are made out of dried flowers and other synthetic materials.
• Candle Making – This involves making candles for sale out of wax, fragrance oils, vessels, wicks, and other relevant raw materials.
• Craft photography – Here as a photographer you normally major in selling unique craft photos to people in online marketplaces.
• Jewelry Making – This is the art of making jewelry using hands and other simple crafting tools for sale.

People can easily get to know your business according to the type of niche you’re into compared to when you’re doing many things at once. Niching down will enable you to offer the best in the industry with experience and competence.

3. Make a Business Plan

In the implementation process, a business plan is an important tool for any new startup for success. There are different components of a business plan that you must take into consideration.

• The executive summary – It is a thorough overview of the business plan reflecting the business’s future strategic plans.
• Company Description – This is meant to describe business goals, missions, visions, and products or services offered by the startup.
• Market analysis – The craft business needs to have a marketing plan in place in order to reach out to the target audience for awareness to make sales.
• Competitive analysis – This helps you to get clear about competition in your niche and the industry at large. When you get to know about your competitors you can take advantage of their weaknesses to grow your business.
• Financial plan – This is a drafted plan of capital expenditure and projected revenue for a craft business. It can also be used to predict the financials of the craft business now and in the future.
• Organizational structure – The Company’s legal structure and a team of members are all captured here.

All the components listed are worth putting into consideration if you’re to make the most out of the craft business.

4. Get a Business Location

The craft business must be strategically located to ease accessibility to products available. However, you can also start making your crafts from home to avoid rental costs.

Today some businesses don’t have physical locations but rather use online platforms like websites and social media platforms as their locations to connect with clients.

If you want a physical address for your business it should be strategically located near your target audience, in a state with low startup costs, and in an accessible location.

Your craft business offices should be strategically situated for brand recognition by clients and the entire industry to make money.

5. Register the Business

Another simple step to start a craft business is registering it to operate legally in the industry. During business registration select a business structure that suits the size of the craft business started.

Some types of business structures to consider include sole proprietorship, partnership, Limited Liability Company (LLC), and corporation.

• Sole Proprietorship – It’s a one-man business with full control and liable to any business proceedings as they occur.
• Partnership – Here a group of people comes together to register a business but with equal liability to business proceedings
• Limited Liability Company – Members of a limited liability company have liability and tax protection benefits after registering the business.
• Corporation – This is a separate legal entity, all legal actions and other business proceedings are done in the company’s name. Compared to other business structures, profits are shared among members in the form of dividends as agreed.

After making a decision about an appropriate business structure for the craft business, consider choosing a company name that relates to your niche and reserve it for recognition.

6. Tax Registration

Tax registration is a must and a requirement for any serious business that wants to operate legally in any state. You need to get an Employer Identification Number (EIN) or a Social Security Number (SSN) for a sole proprietorship for tax purposes.

Another important item after receiving the EIN or SSN is choosing a tax year that begins in a given month when returns for the craft business will always be filed

7. Get a Business Bank Account

Company money should be separated from personal funds to ease accountability for business incomes and expenditures. Opening a company account it’s not hard at all despite some small charges on activation.

Any online transactions for the business can be conducted through the bank to keep money safe with limited access unless otherwise.

Some items required by the banking institutions at the time of opening up a company account include EIN or SSN, articles of incorporation, names of directors, business address, and other legal documents as requested.

To get more information about account opening requirements you can contact your service to give details about how you can go about it with convenience.

8. Secure Funds

Like some business startups, a craft business requires funding to keep operating in the industry and deliver the best for success. There are different ways in which to get funding to facilitate day-to-day business operations.

• Personal Savings – If you have some money saved in the bank account, this is good to start with to avoid borrowed money that comes with payback pressure.
• Friends and Family Members – Share the business idea with some immediate family members and friends to request funding. You can talk to them to become business partners to share profits together.
• Government Grants – Another way to get funding for the craft business startup is through grants.gov for government grants.
• Crowdfunding – Platforms like Fundable, Wefunder, and others are great to use while in search of potential funders for the craft business. The business idea should be drafted in writing to reflect the business’s future to investors in detail.

When the craft business is just starting and it’s at a small scale, select a suitable type of funding that won’t take you a lot of time waiting for money to use.

9. Process Licenses and Permits

Get licenses and permits from appropriate authorities to start a business without interference from responsible government authorities. There are different state authorities in charge of licensing and permitting businesses to start operations.

Depending on where the craft business is situated, licensing and permit terms may differ but you would prefer operating in a state where the terms and conditions are fair to the business.

Let’s look at some licensing types needed to operate a craft business depending on where the business is located.

• Sales Privilege License – This allows you to remit taxes to the state collected from sales directly made to clients. It doesn’t apply to those businesses where craft shows directly collect money for craft sales.
• City Licensing and Permits – These are acquired through local licensing and permit authorities like the local chamber of commerce.
• Wholesale License Requirements – For the craft business to make sales at wholesale price it needs a sales tax license.
• State Licensing – No matter the type of business structure you’re operating, getting a state business license is a requirement for a craft business.

If you’re new to business startups inquire with appropriate business authorities about licensing and permit requirements that suit the craft business.

10. Hire Staff

Since the craft business is just starting, you may not need many people to work with, but in the future, you would want to assign as the business grows. Sure, you can’t do everything yourself that’s why you need to hire people at cost.

Craft business specialists you may need to hire include image and video editors, photographers, portrait art specialists, and more. And you don’t need to fill all the vacant positions at once since it’s costly to maintain staff.

Source for specialists through platforms like Fiverr, Upwork, and Jobs.com with competence to get the best service with value for money.

11. Business Insurance

Getting insurance for the craft business to protect it against any unpredictable event is an important step for any new startup. You don’t have to wait for property damage and accidents to plan for business insurance.

Let’s at look some relevant forms of business insurance for a craft business for protection against any unpredictable incidents.

• Worker’s Compensation – This insurance policy is meant to cover employees of the craft business when they are injured while at work.
• Business Owner’s Insurance – The insurance policy is an all-in-one for general liability and commercial property coverage.
• Commercial Auto-Insurance – The insurance policy covers business-owned vehicles against accidents.
• General Liability Insurance – It covers the craft business against third-party risks that result from handmade creations.
• Cyber Insurance – This covers the craft business from data breaches. If the business is so into using credit cards and other sensitive technology items, a cyber insurance plan is an option.

Insurance is an expenditure to the craft business but worth it, shop around for the best insurance service providers for cheaper costs in insurance premiums.

12. Establish an Online Presence

Today any business should have an online presence to be able to reach out to the target audience effectively. Whether you have a physical location or not, online presence is paramount to the craft business.

Most people in need of crafts won’t have time to come to your shop but online platforms like a business website and social media make communication easier in business.

Besides a business website, you need to choose an appropriate social media platform for your niche to drive potential traffic to the business for example Facebook, Instagram, TikTok, Twitter, LinkedIn, and more.

You need professional online platforms for the business, and here you will have to hire a social media professional and web designer to develop a professional website platform. But if you’re tech-savvy you could avoid the costs by making the developments yourself.

Before getting into paid advertisements for your products, a business website and social media platforms are a great way to start marketing the business organically at no cost.

Setting up an online presence for a craft business gives you more exposure in business and the entire craft industry.

13. Market the Business

The craft business has to market its products to the audience for recognition to make sales. You need to supply the right products using appropriate channels to the target market.

In the process of marketing the craft business the 7Ps of a marketing mix must be put into consideration for success, and in detail let’s break down the marketing mix and 7Ps.

Marketing mix

This is a list of tools that a business uses to come up with a comprehensive marketing plan for its products.

The 7Ps

• Product or Service – The product available should be able to meet the needs of clients in the best way possible in terms of Packaging, Quality, Choices, Features, Design, and more.
• Price – You need to research the pricing of similar products or services in the industry to compete effectively. This will help you offer the best prices accordingly to make sales.
• Promotion – Let people get to know about your products or services in the market. Business promotion can be done in two ways which include digital marketing and traditional marketing channels.
• Place – The craft business should identify places where products or services can easily be accessed by clients for business.
• People – You need to hire people with the right skills to deliver service to clients in the best way possible for example customer support staff, marketers, sales executives, social media managers, and other relevant employees.
• Packaging – Some clients are concerned about the way you do the packaging for products purchased. The package design should look unique, informative, and quality.
• Process – There must be a procedure to follow that matches customer expectations to deliver with best practices for success in the business.

With the 7Ps in the craft business started, despite some challenges you can’t easily go wrong during implementation.

FAQs

What Are The Best Craft Types To Sell to Make Money Fast?

There are different types of crafts you can sell to make money fast like Candles, Toys, woven baskets, handmade soap, key chains,s and more. Crafts have high profit margins since you don’t need a lot of money to invest in raw materials.

What Are The Most Common Craft Business Ideas In The Industry?

Candle making, embroidery, basketry, T-shirt crafting, jewelry making, hand lettering, and calligraphy are among the most common craft business ideas in the industry.

The craft industry has plenty of common business ideas you can start to make money from the comfort of your living room.

How Can I Be A Successful Entrepreneur In A Craft Making Business?

To be successful in the business you have to follow the easy steps listed above and don’t forget to incorporate the 7Ps of the marketing mix.

What Is The Best Online Platform To Sale Hand-made Products?

Today, Etsy is the best and most commonly used online platform for selling craft products. You can tap into the platform of millions of sellers and buyers for business.

Conclusion

Are you planning to start a craft business to make money or already running a craft shop? After reading through hope you’ve found value, you’re not far away from growing a successful craft shop or business.