Tuesday, November 9, 2010

Hobby or Home-based Business? A Profitable Decision.

Many professional crafters started their businesses after being urged by friends and family. It took me many years of entering and exiting the craft market to realize that I needed to wholeheartedly become a craft professional. I, in fact, never knew that Etsy existed until the creative force behind Mamanyah Creates and Natty Rootz Wear  (both on Etsy) introduced us. Affirmations and encouragement is important to all of us no matter what task we decide to take on. I treasure important people in my life who sincerely praise and appreciate my skill. Yet, to proceed at becoming a professional crafter interested in making a serious profit, I had to understand the difference between "hobby" and "business". A lot of this stuff, the necessaries, I've learned along the way. Which means I'm still figuring out quite a bit, myself. If you're not naturally a risk-taker like myself, you might cringe at some of my horror stories. Tales of how I jumped head first into my idea of starting a company. Lots of lessons learned, but lots of money and time wasted along the way. I should get a tattoo that says "Just do it" because that's how I take on many new tasks.

Anyone who believes that just because they have a passion for their craft or collectible that that will substitute for real business skills is in for a rude awakening; a very quick one at that!  A knitter who opens a shop stocked with only their favorite brand of yarn and needles is taking on a risky, or perhaps, bad idea. While enthusiasm for your interest is important and perhaps the biggest aspect of all, it really takes business skills to turn a hobby into a profitable endeavor. I challenge you to ask yourself whether you could turn your hobby into a profitable opportunity.

Can you set aside your personal preferences in order to observe trends and money-makers objectively? I actually started out that way. My love for African/Ethnic prints quickly put me in a box. Truth is, a lot of people who say they love the fabric and the culture are rarely buying items constructed from the material. Instead, I turned that interest in the textiles into a supply store: ladyfingahs.etsy.com. And if someone sees something on kamelishae.etsy.com that they want constructed of afro-prints, they just need to choose a fabric from the other site without being charged an extra fee. Before making any crucial moves, you have to honestly ask yourself whether you're willing to take time to learn business essentials. What are they? The list could vary depending on your industry, but for starters: basic book-keeping, permits/licenses, customer service, product info and the biggy... the IRS/tax filing.

Why continue giving away your creations when you can sell them? Go into business! Unlock that potential and turn your skills into cash. In closing, answer the following questions to help further define your status as a craft hobbyist or craft professional:
  • Have you researched your potential market?
  • Can your business make a profit?
  • Can you formulate an efficient book-keeping system? Paypal has some really good apps to help with this.
  • How will you keep track of your shop's inventory?
  • Can you afford the necessary licenses and/or permits?
  • Can you afford to advertise or promote your company and/or product?
  • Will you file the proper tax forms to show deductions?
  • Can you form a relationship with vendors and wholesalers? Do you know who they are? If not, do you know how to find them?
  • Can you afford studio space or an office in or outside your home?
  • How much time can you devote to your business every week, day, month?
  • How will you brand your company? Do you have a logo, mission statement, letterhead, business cards, etc.?
  • Can you attend (whether vending or just attending) craft fairs, bazaars, trade shows, etc.?
  • What is your backup plan... for any of the above questions that were answered negatively ?
 This could be you!

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