There are many different types of craft materials
What is craft?
Craft is about making things. It is an thoughtful and physical activity where the maker explores the infinite possibilities of materials and processes to produce unique objects.
Having a craft as a hobby is to enter a world of wonderful things which can be challenging, beautiful, sometimes useful, extraordinary, and helps you to understand and enjoy the care which has gone into their making.
Setting up a craft business
So now you have a new hobby making craft and gift items, and you really enjoy doing it.
Then one day someone says that you ought to sell them! But could you? Would you like to branch out and turn your hobby into a business?
Do you think that you would still enjoy your hobby if you had to make things to order or to build up a stock? If the answer is yes, then you have a chance of turning your favourite hobby into a business.
Check out other craft businesses
There are many people who have set up their own business based on crafts that they started as hobby, just have a look on Facebook and type in the search ‘handmade’ and there will be a long list of pages that are advertising their wares.
Search for ‘Handmade’ on Facebook
Is it really as easy as that? It can be, but you need to find a niche in the market. Unless you are really lucky, you are not likely to hit it big in the first month.
I ‘fell’ into my business, after I had made myself a handbag and purse, something I had wanted to do for a long time – it was more of a challenge to myself.
As I also work full time, I used my handbag for work and people remarked on how nice it was. Then one person said: “Please can you make two for me?”
That was the start! But once you have started, there are then many other things that you need to think about, because once you have sold something and made even the smallest amount of profit – you will need to share it with the tax man!
Next page pricing
What will you charge for your goods?
So by chance or design you have decided to start your craft business, but where do you go from here?
You have been asked to make an item, but how do you work out how much you need to sell it for?
How to get a price
One way of trying to find a price is by looking at other craft businesses and have a look at what they are charging, have a look at the craftsmanship and the quality of their materials. See what people are willing to pay for their goods, particularly if they are not particularly well sewn or made.
Working out a price
You can try to work out how much it costs to produce each item, including the time it takes to make and any other expenses. This will give you an amount to start at, do you think what you have worked out is reasonable?
Probably not, it is easy to think that people won’t be willing to pay that amount for something that you have made.
Ask friends and family what they would be willing to pay for your goods, what price would they suggest?
It is very difficult, as many people think that handmade and homemade mean cheap!
What to include
Quite often when starting up a business like this, to get the sales, you will need to cover your material costs, but you will never be able to fully cover the costs of your labour.
But you can always start off at a lower price to get the interest, and then increase the price slowly as the business gets off the ground.
Next page It’s a taxing business
Don’t forget to register with Inland Revenue
So now that you are selling, you have started your business.
You must now decide what type of business you will be, and you must register to pay your taxes!
There is more information on the Inland Revenue website.
There are three different types of businesses to choose from:
You also need to think up a name. Most times you can think of any name that suits you and your business, particularly if you are registering as a small business.
If you are registering as a Limited company, you will need to check with Companies House to see if the name you want is available.
Next page Insurance is important
Buying insurance is vital for your business
Now that you are in business and selling products you need to get yourself insured, particularly in this culture of suing.
Cover yourself
We live in an increasingly litigious society which means that, perhaps more than ever before, creative business owners need to consider purchasing business insurance.
This is really important if you are considering selling at craft fairs, shows, public events, open studios, workshops etc.
There are two main insurance types you should look at:
Legally products must be “fit for purpose” so if you make or supply a faulty product which causes damage or injury to someone (this includes products which are given away and not just sold) you may be subject to a claim against you for compensation. This type of insurance, however, won’t necessarily cover you against financial losses to a business or person caused by a faulty product you made, supplied or repaired so check with your insurer.
How much do I need to insure for?
This is one of the most frequently asked questions and ultimately will come down to a personal judgment as to what is appropriate for your particular business but, generally speaking most insurance companies offer insurance between £2 million to £5 million as relatively standard.
If you shop around you will find an insurance company/broker that will give you a good package not just for your premises and goods but also to cover you if someone should hurt themselves, either at your craft stall or by your product.
Here are some places that you can start:
Next page Marketing your wares