Publications | Starting and running a craft business

Starting and running a craft business

Many people enjoy making hand crafted products as a hobby and some would like to generate an income by selling what they make.

If you would like to develop a craft hobby into a craft business, it is important to consider whether there is sufficient demand for what you make, if you can sell what you make for a profit and how you are going to find your customers.

This site has been designed to help you find fairs to attend, venues to book, suppliers etc. It is a good idea to sign up as a member and then to list your crafting details.


Product choice

Your product choice will depend upon what your craft skills enable you to make and what people want to buy. Good places to look for inspiration include craft shops, gift shops, relevant magazines and at craft fairs. Also you could ask friends and relatives what things they would consider buying. If you attend craft fairs, in addition to seeing the craft work of others, you might make useful contacts in the craft community and find new craft materials suppliers and additional outlets for your work. You might decide to improve a product that already exists or develop something new, to meet an opening in the market. You could enhance your existing set of skills and expand your product range to meet market demand. Craft courses are very popular and learning something new is always a bonus.


Pricing your products

Pricing requires you to include costs such as craft materials, insurance, tools, packaging, distribution, stationery, utility bills and the amount you pay yourself for the time you spend working on the business. You should also take account of any tax that you will have to pay. You can find many of the things you need in the craft supplier section.

Once you have calculated your unit cost and compared it to the going rate for similar craft products, you can decide how much you are going to sell your work for.

For example it may cost you £10 to make a finished product. You could set your wholesale price at £20 (the price you would sell it to a shop). The retail price may be double your wholesale price, in this example £40. If you were renting a stall at a craft fair and doing the selling yourself, you would sell at the retail price not the wholesale. This would then cover your selling costs.

Too high a price could make you less competitive and reduce sales, whilst too low a price could increase sales but reduce profits and even cause your business to run at a loss. Your aim should be to find the right balance, which provides you with a good cash flow and a healthy profit. By reducing your costs or improving your productivity, you could increase the profits needed to invest in the growth of your business and help with finances during any periods of low sales.


Market research

Often people start a craft business because it is what they enjoy or it is based on knowledge they already have. This is good because you will have a passion for what you are producing and be able to demonstrate and discuss your work.

Market research is the process of looking at what people want to buy and in what quantities, to see if you will be able to meet your requirements.

The Internet is probably the best source of information on just about everything. This site has many thousands of members and is all about craft, you could also look in:

You can do your market research yourself, popping along to a local craft fair is a very good start as you can talk to people already in the business of selling what they made.


Money

It is often the case that people want or believe that they must raise finance to start a business. However, this may not be the case and you will need to pay back, any money lent. This can put a real strain on any profits you may be making and you may find yourself over stretched and working hard for the lender.

If at all possible, "Neither a borrower nor a lender be;". Work within your means and think your way past the need to lend money. Build your business with hard work, honesty, friendship and loyalty, rather than debt.

If you borrowed money from a friend or family member then you may find that the money goes and you are unable to pay it back and so the friendship goes to, "For loan oft loses both itself and friend, "


Business types

You will need to decide the structure of your business, there are three to choose from:

  • Sole trader
    • Quick and easy, just start and let the Inland Revenue know
  • Partnership
    • If there is more than one of you working together, this is an option
  • Limited company
    • A much more formal company structure with many advantages but more paperwork

Accounts

You will need to keep good records of all transactions, money in and money out. If you are not great with organising money, make sure you get help and advice from an accountant or book keeper. They should save you more money than you pay them and will leave you free to focus on your work.

Marketing your craft work

Effective marketing will make potential customers aware of your work and therefore increases your chance of making sales.

Many craft people choose to use this site to promote themselves. Below are examples of exhibitors who have chosen a promoted membership level for their craft:

alterKNITive - Knitting - West MidlandsBabsbeth Crafts - Textiles - Perth and KinrossCake Days - Confectionery - CambridgeshireFunctional Art - Recycled - EssexWelsh Blankets and Baby Giftware by Lou - Knitting - Rhondda Cynon TaffDKR Photographic - Photography - SurreyFestival Bling Bling - Art - BerkshireAlexandra CRystal Cards - Paper Goods - EssexKims Dinky World - Confectionery - LondonPaula Moyes - Dolls - BedfordshireLucy Blossom Crafts - Cardmaking - LondonThe Finishing Touch - Home and Garden - Greater ManchesterBEAD TREE - Jewellery - HertfordshirePottery by Max Balme - Ceramics - West SussexHelen Jenkins Designs - Textiles - Buckinghamshire

  • Other ideas for marketing yourself include:
    • Printing and distributing your leaflets, you can print an A4 leaflet from your listing on this site, that includes your confirmed events list.
    • Putting a postcard in shop windows
    • Selling through local retailers
    • Advertising in newspapers and magazine
    • Selling to large organisations like factories, office etc
    • Advertise in directories

If you provide work of good quality at a competitive price this could lead to repeat business. Marketing your craft work will be made easier if you have a clearly defined range of products to offer potential customers and a strong brand identity for your business. If you sell your work through retail outlets they will want to position your product line in a particular section or department and will increase the cost of your products to cover their profits.


Where to sell

A good place to market and sell what you make is at craft fairs. Fairs have the advantage of enabling you to meet and talk to existing or potential customers and get feedback on your range of products. Take a look at our guide to selling at craft fairs or search for craft fairs in your area.


Insurance

As with all businesses you will need to take out insurance, public liability as a minimum.


Working from home

One of the advantages of starting a craft business is that you can often work from home.

If you dedicate a room in your home to your craft work you will be able to claim back part of the running costs of your home against your business.

  • Some reasons why people choose to work from home, include:
    • Avoiding the time, stress and cost of commuting
    • It is much cheaper than renting or buying premises
    • The freedom to set your own hours and work at your own pace
    • You can make your work environment comfortable
    • You can see more of your family
  • You may want to think about these thing before you start:
    • Check if there are any restrictions from your landlord, mortgage lender or local authority
    • Business insurance
    • Home security

If you can't work from home then many craft people set up a studio, gallery, workshop or shop.


Conclusion

"Working for yourself is a rewarding, challenging and exciting pursuit. If you are able to achieve success by doing what you love, then you may be rewarded with two of the most important things in life; time and the ability to say no. " Michael Riley, founder UKCraftFairs

This is just a guide and you need to make sure you think about what you are doing and research, so that you make the right decisions for you.


Craft Suppliers

Boxes and Busts - Jewellery - CardiffMarketing in One Day - General Crafts - SurreyBarefoot Books - Toys and Games - SurreyUnique Gift Fairs - Fashion Accessories - West YorkshireSay Aloe to Forever - Health and Beauty - CheshireThe Magpie Haberdashery - Sewing - LondonSilver Nutmeg - Jewellery - East Sussexglitterexpress - General Crafts - CheshireBox Frames and Display Cases - Wood - CeredigionZenda Ribbon Limited - Cardmaking - StaffordshireCutterPillar Pro UK Distributor - Cardmaking - East SussexuDesign - General Crafts - West LothianDisplay Stands Ltd - General Crafts - HampshireFiloro Crafts - Cardmaking - Hertfordshire