The business of arts and crafts

Helping you understand your craft business activities

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.

Regulations

Many products produced by artists and crafts people need to be made to recognised standards. Unfortunately, the details are a little long for this article, so we would recommend that you check whether the items you are making need any certification or approval.

For example, if you were making toys and games you would need to investigate CE marks and if you were making cakes you would need to think about food hygiene standards.

CE Marking Guidance

Food safety and hygiene

It is very important to make sure your products are safe for sale, as none conformity to regulations may result in harm to individuals and fines for you.

Pricing your products

Pricing is one of those subjects that is very hard to pin down. Some people class it more like an art form than a science. To help people come up with a number that works for them, we built the Craftally app, available on the app store.

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.

Pricing flexibility

Your prices do not have to be fixed. Large companies use a more flexible pricing matrix. They can often change the price based on the person buying, considering an increasing number of factors. For example, source market pricing - where people coming from one country pay more for the same thing, as someone from another country. For example, car hire pricing at an airport or hotel prices.

With ever more complex web-based strategies some companies can display a different price based on who you are and your previous buying habits. Not something that we feel is fair.

When you are selling at a craft fair, you may need to adjust your pricing up or down. If you are at a large perhaps costly event you may need to increase your pricing to cover your costs. You may be at an event in a poorer area and not be able to sell at full price because people can’t afford it.

The ability to be flexible is important. However, you need to know your numbers. In the example above of your unit cost being £10, trade price being £20 and retail price being £40, your flexibility may be based on volume to a shop (£18 trade on orders over 50, for example) your retail price at a fair could have £5 off for today only – knowing that you are still making a healthy profit.

Receipts

Despite being a legal requirement as part of a sale, it is very rare to be asked for a receipt at a craft fair. However, this may depend on the cost of the item being sold. You should have a receipt book available, just in case someone does ask for one. It is also an excellent way to get an additional piece of marketing material to a potential repeat customer. The good thing about receipts is that they are often kept for long period of time. If possible, you should also include your details on the item being sold, which may be quicker for you during a busy fair.

What to include on a receipt

As you can see from the list below, if you are not well prepared and you are asked it could be a time-consuming effort.

• Date and time
• Number and price of items
• Name of business and location
• Any VAT charged
• Method of payment
• Returns policy

You could hand write an amount on the back of a business card, with a date and where you are on the day.

Monthly overheads

An overhead is something that is not directly involved in the production or sale of your product. For example, the space you rent. If you use part of your house or flat, or rent a workshop then that cost is an overhead. Let’s call the rent £100 a month. If you sell 100 items per month, you could say that £1 per item covers the rent. If you sell 200, then it is only 50p. If you only sell 20, then it is £5 per item.

It is a good idea to try and make you monthly overheads as low as possible as they do impact your profit. Equally important is to know what they are and not miss any out. Anything that you pay yearly, divide by twelve and put that number into your monthly overheads.

Once you know the number, let’s call it £300. Then it is relatively easy to add the number into your pricing calculator to work out your pricing.

The cheapest or the most expensive

It is important not to think, “I would not pay that”, instead think “what are people happy to pay for this”. You should detach your own opinions and think about the buyers. If you are creating great art then the price is not just the costs, it is about its uniqueness and how it makes people feel.

When an artist is first starting out, their prices will be lower than when they become more established. This is then a very different calculation, based more on supply and demand. The artist can only create so much and if the number of people wanting to purchase their work is high then the price will increase.

In the case of authors pricing is affected by global factors, print on demand, eReaders, publishing houses. Adding a signature to a book during a book signing, should increase its value to the purchasers. Sometimes increasing its value only increases the chance of a sale rather than increasing the sale price. If you are looking to promote an arts or crafts book you have written, check out CraftBook.co.uk

Looking at the competition, what is the lowest and highest price for the items you are making. What is the difference between the two, it could be product quality, but it is more likely to be branding. All that stuff around the product, the name the packaging, the shop, the website, the location etc. If you can’t compete with that then your price may not be at the top end. However, with craft it is very unlikely that you can be anywhere near the mass-produced bottom price, so you need to pitch yourself somewhere in the middle.

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. The UKCraftFairs site has many thousands of members and concentrates solely on craft, you could also look in:

• Libraries
• Directories
• Professional bodies guilds and associations
• The Internet

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 borrowed. This can put a strain on any profits you may be making, and you may find yourself over stretched and working hard for the lender.

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

If you borrow 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 yourself

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

Many craft people choose to use this site to promote themselves.

• 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 section or department and will increase the cost of your products to cover their profits.

Print marketing

If you're at an event or want potential customers to learn about your list of events (you will be attending as an exhibitor), you need to be able to list those events and be able to send visitors to the list. Print marketing is often the only way to get memorable information across to them. As part of your membership of this site, you can print out materials based on your listing details. These materials currently include Business cards (54mmx85mm), DL compliment slips, A4 and A5 posters. All you need is a printer, ideally that can print in colour and on thicker paper or card. You would also benefit from having a guillotine to crop your prints.

Website design

One of the first places people look to see if a business or person is genuine is the Internet. It is a quick and easy way for people to find out more about you. Therefore, your listing on the UKCraftFairs site is a great place to get your message across.

However, if in addition to your listing on the UKCraftFairs site you also need to set up a profession website with your own domain name, then we would recommend Sarah Evans . You will need a couple of thousand pounds for this work but if you are serious about growing your business it is the investment worth making.

You can go and make you own website for a relatively low cost using a collection of well know providers that use templates, but you may not be happy with the end result unless you are willing to invest a lot of your time.

Video marketing

To create high quality, engaging video marketing content to help you stand out from the crowd. Event and venue promotion, brand and product marketing, corporate and broadcast. You could create content yourself, hire a friend or relative or go down the professional route. We can recommend Kingsley Creative who are based in our South London office but can work around the UK. You would need a budget of a few thousand for this type of work.

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. Look at the Selling at craft fairs section of this page 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
  • Parents can have the freedom to work hours that suit the family, whilst bringing in an income and avoiding paying out childcare costs.
• You may want to think about these things 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.

Protecting your business

You promote your business to attract genuine customers or organisations offering you legitimate products or services. These are the people who you want to find you, whether your contact details appear on a website such as this one, or in a printed publication. However, you might also be contacted by people or organisations who intend to mislead or deceive you and they might even wrongly claim to be endorsed by or to be working on behalf of legitimate companies when they are not.

We would advise that you carry out due diligence when considering using products or services offered to you, particularly from organisations you are not familiar with. You could begin by visiting their website or other online presence, looking for comments from some of their existing customers and searching online for information about them.

If you are contacted by cold callers claiming to be from an organisation, take care if they request sensitive financial information. You would be better obtaining the organisations contact details from a trusted source and then you can contact them directly to discuss the matter further.

If you believe that your business has fallen foul of a serious deception, then you could report it to Action Fraud on 0300 123 2040 or go to www.actionfraud.police.uk or contact the Citizens Advice consumer service on 08454 040506. By doing so you are helping to protect yourself and others.

Conclusion

"Working for yourself is a rewarding, challenging and exciting pursuit. If you can 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."

This is just a guide and you need to make sure you think about what you are doing and research thoroughly in order that you make the right decisions for you. You should take professional advice before spending your hard-earned money on things that may or may not have a positive return.

Art and Design

Producing art to sell at craft and other events is popular with exhibitors and customers.

Mediums

Artists use a varied palette to produce their work:

• oils
• pastels
• watercolours
• ink
• acrylics

Originals or prints

Artists may choose to create prints of their works. This is a good way to create additional revenues from original work. The prints can be created in limited runs and the original kept or sold by the artist.

Prints should ideally be mounted, backed and bagged, so that the purchaser needs to simply purchase a frame. Picking A size (A4, A3, A2 and A1) mounts will help people to keep the cost of framing down. Artists should sign and number their prints.

Artists can also produce gifts and greeting cards from their work. These can be very popular at craft fairs.

Workspace

Most artists will work from home in a dedicated space, but a significant number will rent an artists studio. The choice is often determined by the size and volume of work produced and the potential benefits of having a studio near to your salary or exhibition space.

Framing

Many artists will supply the work framed, others will organise a frame of your choice or sell you the work unframed.

Artists work

The boundaries between craft, art and design are rather blurred. Artists can produce a wide range of saleable items, that could be placed into multiple categories.

Additional incomes from art

Artists need to be pro-actively diverse. For example, if they are working as a studio artist they could run courses during the summer months, or they could teach in colleges or other venues. Alternatively, they could work as illustrators.

Art and Design Principles

Balance

Areas of light tone can be balanced by areas of darker tone and small shapes near the edge by larger central ones.

Colour (hue)

The colour wheel has twelve parts and can be used as a guide to contrasting and complementary hues. The wheel uses the primary colours (red, blue and yellow), secondary (green, violet and orange), compounds which are a mixture of the primaries and tertiaries which are between the primary and secondary. Saturated colours contain no white, black or complementaries.

Contrast

The opposing elements of a design are contrasting. Examples include the hues appearing on opposite sides of the colour wheel and light and dark tones. Contrast disrupts unity in a piece of work and should be used with consideration to the amount of discord required.

Dominance

The elements in a work of art or design that you chose to emphasize are called dominant.

Gradation

The illusion of perspective can be created using gradations of tone from light to dark and colour from cool to warm.

Harmony

The use of similar elements, such as shape and hue, can be used to produce harmony.

Unity

The use of related elements which reinforce the theme of a piece of work can help to create a sense of unity.

Purchasing decisions

Keeping business costs down is one of the most important aspects of your daily thought process for running your business. One thing we like to say to ourselves is “for ever pound we spend; we have to earn two”. Keeping your costs down will help with profitability, cash flow and save time. That said you will need to spend some money for your business to grow, the key here is not to go cheap but to buy well. Value for Money (VfM) is name of the game. Never base a purchase decision only on price. This is equally true both for your business and your personal spending (which has a direct impact on what you need to pay yourself).

So you need to make good choices but finding the best value options can be time-consuming and another true quote is “time is money”, so what can you do to help make the best choice and quickly?

Asking friends and associates for advice based on their personal experience, is a good way to go. They may not always be 100% correct but it should point you in the right direction and give you food for thought. You could sign up to an advice service like Which? that do testing and comparisons on products. This sort of service has a relatively high monthly cost, so you need to way up the cost against your savings and increased efficiency.

You could also think about using comparison sites. Please remember that they will not be exhaustive and therefore any company not on the site will not be compared against. So, think of the comparison as a guide, as one of your three competitive quotes. Actively seek alternatives.

Craft Business Banking

When you first start your craft business, you may not have thought in any real detail about how you are going to organise your finances. This is often because it is a hobby or an interest, that you are testing the water with. Perhaps creating enough stock for one craft fair to see how things work out. If things go well, you will want to do more.

Accepting Card Payments Online?

One way to accept card payments online, is to sign up for a PayPal business account. You can start accepting credit and debit card payments instantly. You will also have a range of merchant banking tools to use. As there are no setup fees, it can be a good way to get started.

Accepting cheques

If you are accepting a cheque at a fair, make sure that it is secured. Here is one of the good reasons for having a business account. People can write a cheque in your business name rather than a cheque directly to you.

Where to start?

The basic thing to remember with any business is to spend less than you make. So, keep track of what you are spending and what you have earned. If you don't the numbers will start to blur. Else, where you thought there was profit, may be a loss. This is one place where the business account can really help. If you only use the one business account for all your earning and expenditure, you will automatically have an easy to analyse list.

Having a simple list will help you look back a review your spending. This could really help you increase your profits in the future.

Investing in yourself

If you want to get started how much money do you need? Money for your business can only come from two sources either you or someone else. If you are financing yourself, you can be a little over generous, make sure you are going to be able to give yourself the money back. If you a borrowing from some else, hopefully they will ask you enough questions to make you think about how you are going to pay them back with interest.

There is an art to borrowing money. You need to keep your borrowing at the correct level. Too much and all your profits will be eaten up by interest payments. Too little and you may not be able to function effectively.

Do you need a credit card?

You can use a Visa debit card for example and therefore not need to have a separate credit card. You could have an overdraft or take out the credit card if you need a form of credit. Always remember that every time you use credit you lose some of your profit. However, some credit can be good and make sure that you can honour your commitments.

You should always check your bank statements for errors and to keep yourself aware of all the transactions.

List of Bank Statement Abbreviations

Abbreviation	Transactions description
BAC	Automated Credit
BGC	Bank Giro Credit
BSP	Branch Single Payment
C/L	Cashline/Cash machine
CHG	Charge
CHP	Payment by CHAPS transfer
CHQ	Cheque
CUI	Centralised Unpaid In (Unpaid Cheque)
CWP	Cold Weather Payment
D/D	Direct Debit
DIV	Dividend
DPC	Direct Banking by PC
DR	Account Overdrawn or Debit Item
DWP	Department for Work and Pensions
ERTF	Exchange Rate Transaction Fee
IBP	Inter-Branch Payment
INT	Interest
ITL	International
NDC	Non-Dividend Counterfoil
POS	Point of Sale/Debit Card Transaction
S/O	Standing Order
SBT	Screen Based Transaction
TFR	Transfer
TLR	Teller Transaction
TSU	Telephone Banking

Tax account

If you are running a very small business and do not have another income you may not need to pay any tax. However, you will need to show that you are not earning enough. Alternatively, you may want to start something bigger or are running a local fair or a craft club or even setting up as a craft supplier. If you expect you will need to be paying a sizeable tax or other bill it can be a good idea to have an reserve account set up, that pays you a little interest. It also keeps the money you need to cover potentially large payouts, on one side. This will help you to avoid a cash flow crisis.

Many people just start, taking a hobby and using it to earn a few pounds at a local fair. Others may have a business plan and a full-time business in mind. Whichever end of the spectrum you are, it is vital to be organised and to know your goals.

Your goal could be to make a profit, earning enough to go on holiday or to earn a full time wage to support your family.

Business Bank Account

We believe that having a business bank account is part of the getting organised process. You may be using a trading as name and having the business bank account will mean you can receive payment both in your name or in the name of the business. Both your incomings and your outgoings will be from the same bank account. You do not have to have a business bank account, but it really does help. You may choose to use your personal account but quite quickly the accounts will be difficult to manage.

Where you are going to store all that money you make from selling your products or service. Also, how you are going to pay for material, table fees, craft insurance and travel etc.

Business bank accounts are more expensive to run than a personal account. You should be able to get free banking for the first couple of years. However, when that runs out you will have to pay. It is worth thing about your product and where the back fees.

With craft businesses being easy to start and easy to move between hobby and business, you could be fooled into the

You may want to bank online to save yourself time and effort but may also need a branch to go into.

Where to bank

Choosing the right bank for you is important and it is a personal choice. We had a choice of two major banks that had branches near to where we lived and had online banking facilities. We chose to have a business account with the same bank we had our personal account. It made transfers very quick and easy and meant we only needed to deal with one bank.

You can shop around for good deals, i.e. longer free period, more interest etc. However, remember that these offers change all the time and what is a good deal today may not be a good deal tomorrow.

Craft your Path to Success

The Business of Making Money Making Arts and Crafts

"Absolutely love this book, helps me to go forward with my craft work"— Stevens, 2019

The book explores the business side of starting and growing your own arts and crafts business:

• Planning and building an arts and crafts business
• Pricing, marketing and selling your creative work
• Finding customers and growing your business
• Attending or running craft fairs and workshops

Buy on Amazon