The 8 Craft Business Models You Need To Know About

The 8 Craft Business Models You Need To Know About

I’m really excited to bring you this guide today… I have had so many questions about what sort of craft businesses you should start that I thought I’d give you my top tips to finding something you will love doing!

Working in the Arts and Crafts industry can be everything you imagine, as a creative type… starting and ending each day doing something you love is an amazing feeling. The best news is that you don’t need a huge investment behind you to start out either; so we aren’t talking bank loans, or fancy premises, in fact most craft businesses can be started at home. I started mine in my spare room!

At this point, if you are like me you are chomping at the bit with ideas and questions, after all today could be the very first step into something you have wanted to do for the longest time!

Bear with me though, because I want to start right from square one so that you don’t miss a thing…

Sara Millis -  My Indie Life Blog

Start With Your ‘What’, ‘Where’, ‘When’ and ‘How’

Most of us will go through this initial process almost subconsciously, making decisions really quickly on what we think we’d like to do, so we can race to the creation bit, because that’s what our dream is all about right? Making stuff! But I want to take a moment to just walk you through this slowly, because starting a business is not something to be rushed, particularly if you want to be earning from this new career choice in 10 years’ time.

Let’s start with your ‘what’. Ask yourself what you want from the business – make sure you know what you need to earn as a wage, and what you expect the business to do for you in terms of lifestyle.

Understand ‘Where’ your business idea needs to be based. Can you start this business at home, or will you need premises?

‘When’ will you be working on your business? I know from the many craft business owners that I work with, that our personal situation can affect when we work enormously. So define your hours early on and be realistic about your unique situation. I have clients who work in the evenings, because they have a full time job, or small children at home. I have other clients who work first thing in the morning for a few hours before their disability leads them to becoming tired later on. Working for yourself means that you can work around your lifestyle in a way that working for others simply doesn’t allow. Being mindful of this up front will allow you to start the business in a way that works for you.

‘How’ will you get your business started? This is always a big question and usually money related. Most of us will have to pay bills throughout the first few months of our new business, even though we have absolutely no sales coming in. So understanding how you will address this issue will remove the barrier all together. For me it meant picking up a small side-line job. As I started My Indie Life Blog I picked up VA work (Virtual Assistant assignments). This allowed me to earn some money and pay my bills taking the pressure off of my fledging business and helping me take the time I needed to create the right products for my market.

My top tip here is to find a part time job in the industry you wish to work in. So going back to my example I was a VA to small business owners. This allowed me to see first-hand what sort of things they struggled with, so I could use that alongside my existing knowledge in the craft industry to deliver more content that helps you (my reader) with your business struggles. Likewise if I wanted to start my own soap making business I would look to work in a beauty related business. Two things happen from this strategy; firstly my monthly bills get paid, relieving all financial pressure off of my fledging craft business and secondly I get experience in what is happening in the beauty industry. That could be incredibly informative in terms of trends, market awareness and even customer struggles that my new products might be able to fulfil!

Remember no answer is right or wrong here; YOU are the centre of your new business and so you need to make sure that your needs are met. This will keep you skipping to work every morning, wanting to show up and be there!

Sara Millis - My Indie Life Blog

Finally Pick Your ‘Why’

Ask yourself why you want to own your own business – you need to make sure you have equal measures of passion, determination and commitment to see this through.

Also ask yourself what you want to create and sell. This deeply personal choice can only be answered by you, but what I will say is that you will need to have an ever-lasting passion for your specialisation and indeed some insight. This is because this is your WHY… Why you get out of bed every day and why you work for yourself. With this in mind pick something you know about and pick something that you will want to work on in 5, 10, or even 15 years’ time.

For some of you this is the main sticking point… ‘What DO I want to do for a living?’

I get it.

Here’s the thing… I can’t answer that for you.

What I can do is to help you understand the types of businesses you could start.

 

8 Craft Business Models

Starting a craft business is not simply about making the odd thing to sell here and there… a craft business can be so many different things. Let me show you the 8 business models that I think are realistic starting points;

 

artist palette

Craft Business Model #1: Stock – Own Label Retail (and possibly some wholesale)

Concept – You create and sell your own arts and craft products.

Production – Everything is done in house by you and/or your team.

Product Delivery Methods – Online website, sales forum (Etsy, Amazon, eBay, Folksy, etc.), or at events.

Sales & Marketing – You are responsible for all levels of sales and marketing.

Shipping – You are responsible for shipping.

Location – You can certainly start most of these businesses at home, unless you need a specialised and dedicated space.

Start-up Costs – Costs will be based on website services you require and specific production equipment and materials.

Difficulty – Without good profitability practises you will struggle to pay for new team members, thus affecting your ability to be able to produce more when demand is higher. This means your potential to grow could be capped. This model can also be very labour intensive in growth, without staff.

Benefit – You can choose to keep the business to a size that reflects your needs as the business owner; working both the hours you want and earning the wage you want. You remain in total control of the design and marketing ethos.

 

Craft Business Model #2: Stock – Own Label Exclusively Wholesale

Concept – You create and sell your own arts and craft products.

Production – Everything is done in house by you and/or your team.

Product Delivery Methods – Wholesale website, or at wholesale events.

Sales & Marketing – You are responsible for all levels of sales and marketing, including customer service to your wholesale clients’ clients.

Shipping – You are responsible for shipping to the wholesale client only.

Location – You can certainly start most of these businesses at home, unless you need a specialised and dedicated space.

Start-up Costs – Costs will be based on website services you require and specific production equipment and materials.

Difficulty – Most wholesale clients will want good margins on the product they buy from you, including occasional bulk offers. This is especially true if they trade from physical shops (bricks and mortar premises). They may also be unreliable in purchasing regularly and in high quantities. This is because they have a wide range in which you are a small part of. So watch your profitability, your range of wholesale clients and remember you have little control over sales. Some wholesale contracts may also tie you into certain stipulations in trade elsewhere, so make sure you understand what you are signing up for.

Benefit – You can produce your products without the hassle of selling them. You can also get seen by the right type of client almost immediately if you choose your wholesale partners wisely. You remain in total control of the design ethos.

 

shop-icon.jpg

Craft Business Model #3: Stock – Purveyor of Fine Crafts

Concept – You buy in arts and crafts from artists to curate a collection that others buy from.

Production – None. Your biggest area of concentration is sales and marketing.

Product Delivery Methods – Online website and possibly a physical space to show the collection.

Sales & Marketing – You are responsible for all levels of sales and marketing, but individual wholesale account artists may assist you on details.

Shipping – You are responsible for shipping.

Location – It is more likely that your clients will expect a space they can visit; either a boutique shop, or a gallery.

Start-up Costs – Costs will be based on website services you require and/or the lease of a space you can sell from.

Difficulty – The cost of leasing a space can be very prohibiting, so you need to pick your artists wisely and have a very good understanding of what sells.

Benefit – With no real production time, you can spend time on curating a collection and a customer base that build a community your sales will thrive in. You also get to do the bit you love… selling to your client!

 

Craft Business Model #4: Stock – Craft Supplies, or Books

Concept – You buy in craft supply materials, or books to sell on.

Production – None. Your biggest area of concentration is sales and marketing.

Product Delivery Methods - Online website, sales forum, events, or in a Bricks and Mortar shop.

Sales & Marketing – You are responsible for all levels of sales and marketing, but individual wholesale suppliers may assist you on details.

Shipping – You are responsible for shipping.

Location – You can certainly start most of these businesses at home, unless you need a specialised and dedicated space.

Start-up Costs – Costs will be based on website services, or location space you require.

Difficulty – Picking a range of products that will sell at prices that include a decent profit is difficult. Sales or special offers may be predetermined or restricted by the supplier you work with and their leading wholesale client terms.

Benefit – As you are hands off with production, it means that you can quickly implement new stock ideas and adapt your range to whimsical market trends.

 

blue-computer-icon.png

Craft Business Model #5: Digital Stock

Concept – These are eBooks, printables, or patterns that you create and sell.

Production – Everything is done in house by you and/or your team.

Product Delivery Methods – Online website, or sales forum.

Sales & Marketing – You are responsible for all levels of sales and marketing.

Shipping – Once you have created and uploaded the digital product, the delivery is automated.

Location – You can certainly do this from home.

Start-up Costs – Website, Camera and Computer with relevant software, printer, (maybe) scanner.

Difficulty – These are low cost items that you will need to sell a lot of to make enough profit to pay your wage and bills.

Benefit – There’s no stock and there is no cap on how many you can sell at one time! In other words you could sell 1 million copies of your eBook overnight without any production effort, or storage problems.

 

Craft Business Model #6: Digital Services

Concept – These are live or pre-recorded video courses, or workshops.

Production – You need to produce and teach each workshop curriculum.

Product Delivery Methods – Online website or a course platform provider.

Sales & Marketing – You are responsible for all levels of sales and marketing.

Shipping – Once you have created and uploaded the digital product, the delivery is automated… unless you are LIVE and then you need to physically be there to deliver the course.

Location – You can certainly do this from home.

Start-up Costs – Website, Video Camera and Computer with relevant software.

Difficulty – Identifying exactly what your customers need the most and pricing it to the market is always difficult. Remote tutoring can be complicated for in class Q&A needs. Live sessions can reduce your bookings, because the question part of the Q&A session maybe difficult to cope with on your own.

Benefit – There’s no stock and there is no cap on how many courses you can sell at one time! In other words you could sell 1 million pre-recorded classes overnight without any production effort, or storage problems. Live video sessions can enhance your teaching reputation.

 

accept-female-user-icon.jpg

Craft Business Model #7: Physical Services - Teaching

Concept – These are usually teaching crafts on a one to one or small group basis.

Production – You need to produce and teach each workshop curriculum.

Product Delivery Methods – Everything is delivered in class.

Sales & Marketing – You are responsible for all levels of sales and marketing.

Shipping – None.

Location – You can teach at home or hire a hall.

Start-up Costs – Equipment, materials and any space requirements.

Difficulty – Teaching in small groups can be cost prohibitive for some of your clients, depending on the course content. Successful teaching requires you to build up a very high reputation for your work and this often comes with hosting your own exhibitions outside of your teachings.

Benefit – Offering a range of classes allows for clients of all experience levels to join in easily and can help you define the areas of better profitability. Teaching reputations can lead to other exciting offers like published books, speaking events and so on.

 

Craft Business Model #8: Physical Services – Teaching for an Institution as a freelancer

Concept – These are usually teaching crafts for an academic, or a retail client.

Production – You need to produce and teach each workshop curriculum.

Product Delivery Methods – Everything is delivered in class.

Sales & Marketing – The Institution you are hired by is responsible for all levels of sales and marketing.

Shipping – None.

Location – Provided by the Institution.

Start-up Costs – A portfolio of work, with class ideas.

Difficulty – You generally teach curriculum provided by the Institution and their client’s needs.

Benefit – Having a good Institution’s name behind you allows you to grow into teaching in other forms, as well as speaking and book offers. This avenue of teaching can also be more regular as you start out.


Decided On Your Business Model?

Now learn how to set up your business in 30 simple steps.

Starting your own craft business is an extremely exciting time, if not a little scary. There is so much to think about, that sometimes we just don’t know where to start!


I’ve written this book to help get you started in the right way, so that you can enjoy everything a thriving craft business has to offer; creativity, joy and of course profit.