Can Your Craft Business Support a Family? Part 1

beginning-business-january-2009-2Today, as people face job losses, salary cuts, or other economic woes, it’s worth examining whether or not you can do something extraordinary: make a living and support your family solely by the efforts of your home craft business.

It sounds like a fantasy—but can it become a reality? Yes and no.

There is something like 115,000 craftspeople in the United States (numbers vary from 106,000 to 126,000), and 22 percent of them are entirely supported by their craft business. Yes, that fantasy can become a reality.

The benefits of supporting your family from a home craft business are enormous. No commute. Flexible hours. Creative freedom. No bosses. No office politics. More time with family. The list goes on and on.

“Successful” for the purposes of this article means that a business is capable of generating the primary income for a family. I am going to set an arbitrary income of $2,000 per month (after business expenses) as the definition of “successful,” knowing full well that most folks need a higher income than that to get by.

However, not all crafts are suitable for turning into a successful business, especially in a less-than-stellar economy. This dream of supporting a family through a craft hobby is frequently laced with a heavy dose of unrealistic expectations about the craft’s moneymaking potential. So, how can you tell if your particular craft will support a family?

We make hardwood drinking tankards—a business that has supported our family of four for the past 15 years. How do we do this? By practicing the tips outlined below. 

Find a niche
Remember that old expression, “find a niche and fill it”? Never is this more true than in the craft industry. This will probably be the single most enormous hurdle to overcome. Can you find that empty niche and create a product to fill it?

This is so hard to do because people often focus on making crafts that they themselves like, without considering either (a) what the competition is for that particular genre, or (b) how many others share that interest. Sometimes a person becomes so enamored with his or her own particular craft product that they either won’t do the necessary market research to determine if their product is saleable, or they ignore what their market research tells them.

Remember this: In order to make a living from your crafts, you must provide what your customers want, not merely what you like making. I’m not saying you shouldn’t make what you love, just that an honest appraisal of your marketability is important.

For example, if you make jewelry or wooden-cutout country crafts, the competition is enormous. Thousands and thousands of other crafters make these types of items. Your particular version must be unique enough to stand out from the competition, or your pricing must be competitively attractive.

Alternately, let’s say that you make beautiful lavender frammerjammits because you simply adore these lavender frammerjammits. You decide to go into business. Then you are bitterly disappointed when only four or five others purchase them because, let’s face it, lavender frammerjammits have a limited appeal. Your niche is too small to support a family.

The price you set for your crafts can also be a “niche.” You can fill the empty hole of frammerjammits that are either cheaper or more expensive by supplying mid-price frammerjammits.

The reason we started making tankards was because we loved going to Renaissance Faires, where people dress up and create a village as it might have been 500 years ago (without the plague or vermin, of course). Whatever faire we attended, we noticed that most people walked around with two items: a knife and something to drink out of.

We aren’t metalworkers, so making knives was out of the question (plus there were already lots and lots of knife-sellers). The only options for drinking vessels seemed to be extremely cheap, metal imported cups or high-end handcrafted pewter goblets, neither of which were suitable for hot beverages. However, my husband, a talented woodworker, started tinkering with designs for a wooden cup at a mid-price range. Friends started clamoring for them. We decided to take the plunge and go into business.

We had found our niche. 

beginning-business-january-2009-1How fast are you?
No matter how unique or how large your niche is, it won’t do you any good unless you can make your craft fast enough to meet demand.

If you can only make one lavender frammerjammit per week, you won’t be able to support your family with your craft. The lavender frammerjammit would have to sell for at least $500 before you could consider going into business making them. Is the item worth that price?

I knew a crafter who made stunning hand-woven shawls of exquisite, shimmering beauty. She longed to turn her craft into a business. The trouble was, each one took at least a week or more to make.

No matter how lovely her craft was, it would be hard to find customers willing to pay upwards of $500 apiece for her items. I suggested that she look into the very high-end specialty boutiques in large cities to market her shawls. It is possible that the boutiques would purchase her shawls for a “wholesale” price of $500 apiece, and then turn around and sell them to well-heeled customers for $1,000.

Another woman I knew made beautiful, hand-assembled beaded necklaces. She faced the same problem as the weaver: She couldn’t make them quickly enough to fill a niche. Her best turnout was approximately two necklaces a day, meaning she would have to sell them for at least $130 apiece to make her $2,000 per month minimum.

Unlike the weaver, however, the beader was unlikely to make her business a success. Few people would pay that much for a beaded necklace unless the item was truly unique (which, I’ll be honest, they weren’t).

The Henry Ford technique
Can you make your craft assembly line style? This is probably the most efficient method for making enough lavender frammerjammits to fill your niche.

People often ask us, “How long does it take to make one tankard?” My standard reply is, “One tankard takes about a week to make.” This usually brings gasps of surprise. I then add, “But it also takes a week to make a hundred tankards.”

This is true. Given the drying time for the necessary components of our craft (glue, varnish, epoxy-resin coating, etc.), it takes about a week to make either a single tankard, or a hundred. Guess which is more efficient?

The secret is to make your craft rapidly enough that you can sell them for a moderate price. If we made one tankard a week, we would have to sell them for $500 apiece to make our minimum of $2,000 per month. But, since we can make about 100 per week, in theory we can sell them for as low as $5 apiece (which, of course, we can’t, because this doesn’t factor in materials, shipping, or what we pay ourselves).

However, as you can imagine, having the ability to produce something in an as­sembly-line fashion greatly increases the chances that your craft business will succeed.

Wholesale versus retail
Where do you sell your products? Do you go to shows and sell them yourself? Do you place them in stores? Do you sell them online? The issue of how to market your product will come down to determining if your craft business will be wholesale or retail.

A retail business means that you, yourself, are selling the item. You go to the craft shows. You open the storefront. You start the Web page. You, you, you.

The trouble with this, of course, is that while you are selling your item, you are not making any new items. The time it takes to sell your product is time away from the production of new product.

There are some exceptions to this. Some crafters are lucky enough to have portable production techniques (hand knitting sweaters comes to mind—you can knit while you are sitting in your storefront or craft booth). However, for those of us who need machinery or a large workshop to produce our craft, any time spent selling the product is time spent away from making new product.

When we first got into the tankard business, we ran ourselves ragged. We lived far away from any of the major craft shows that we needed to do in order to sell our tankards. This often meant that we were away from home four days a week—driving on Friday, selling on Saturday and Sunday, and driving home on Monday. We had food, gas, motel, and booth fees to pay. We only had three days a week to make new product. We were stressed, exhausted, overworked, frustrated and frankly, scared.

Then some business friends gave us the best business advice we ever got: Go wholesale.
These friends had built a successful oil-and-incense business, starting from a card table in their garage and mushrooming into a wildly successful business. They explained that by selling wholesale, we don’t have the expenses associated with being on the road peddling our product. We get only half the money per item, but we sell more items at a time.
So instead of sitting at a craft show and selling one tankard at a time for $50 each, we sell 20 tankards at a time for $25 each to a vendor who then sits at a craft show and sells them for $50 each.

The vendor doesn’t have to worry about the time and expense associated with making the tankards. We don’t have to worry about the time and expense of being away from home. It’s a win-win situation.

Statistics have demonstrated that, while most crafters still prefer retail shows, more revenue is generated from wholesale markets. Wholesaling accounts for 27 percent of annual sales for crafters.

So if your craft product lends itself to assembly line production, it behooves you to consider developing the wholesale side of your business. You stand a much higher chance of succeeding in a home-based business if you can stay home.

A new hat
It hardly bears repeating that we’re facing some tougher economic times. It’s a smart idea to diversify your income sources by wearing several different hats. With smart marketing, your craft product can become quite a big “hat.”

Next month I will cover some techniques to increase the chances that your home craft hobby can contribute significant income to support your family. TCR

Patrice Lewis is cofounder of Don Lewis Designs. She and her husband have been in business for 15 years. The Lewis family lives on 40 acres in north Idaho with their two homeschooled children, assorted livestock, and a shop which overflows into the house with depressing regularity.

Patrice Lewis

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