Going full-time with your handmade business

There is a massive difference between a hobbyist that sometimes makes their own items and maybe sells them online, and an entrepreneur that makes their own items and sells them online as a business. That business could be a small one in its infancy providing money for a vacation fund (with plans to grow), or an 80 hour a week job that pays the bills and puts food on a hand-painted plate. For a handmade artisan that prefers to focus on their craft and creations, moving toward a full-time business can be scary and sometimes even terrifying. Perhaps you are at that point, though, where you think you can make it work. But where to start?

Is this the right decision for you at this time?

First make sure that this is what you want and that you are ready for it. Running your own business takes skills and knowledge that perhaps aren’t your area of expertise. There are ways to compensate for this and to get the most out of your skill set (whatever that may be), but you need to be sure you are okay with stepping outside of your comfort zone. If you really hate most of the parts of business that don’t have to do with creating your product, then perhaps you are better off leaving it as a hobby while you work a more traditional job. Or you can look for opportunities in the professional world where you can create for others and let them sell your items as part of their business. There is nothing wrong with keeping your craft as a hobby if that is right for you. A hobby can be very rewarding on its own. Or it might be right for you to leverage  the passion you have for your craft to energize you on your way to a full-time business.

Running your own full-time business can be rewarding, but it will take a huge amount of work. You will need to research, and research constantly. Once you think you have everything figured out you’ll need to adjust. A service you use might change for the worse, sales might suddenly dry up on a site that you depend on, demand for your product might disappear with little warning and no obvious reason, and countless other surprises can occur. You’ll need to either be an expert on everything, or you’ll need to find people who are experts in different areas to help you.

Demands on your time will grow and a handmade business has a way of invading your home life in ways you might not expect. Do you have the patience, time, and energy to put into your business? Do you have a backup plan should you fail? Discuss these issues and others with your family (and yourself) to make sure you are ready. Be as certain as possible that running your handmade business full-time is what you want to do.

What do you do first?

So you have decided that this is right for you. I have some really good news for you. The most difficult first step of running a full-time online business is usually finding your products to sell, and as a hobbyist you already have your products and presumably you are already good at making them. You can skip right to the research phase. There is so much to learn, and much of it you’ll figure out as you go along. But there are some things you can do right away that will help set you up for success.

• Join online groups. Find groups online (such as Facebook - but don’t limit yourself) that consist of sellers like yourself. This will often be people who make and sell similar products, but it could also be groups of sellers that sell in the same place as you. Engage with them and ask questions. You might be surprised at how many sellers are happy to help out the newbie. And remember to give back. If there is a question or help that someone needs and you know the answer, then help them out if you can.

• Have a plan for taxes. You might be the type of handmade artisan who enjoys numbers and spreadsheets. The chances are you aren’t, though. So have a plan for what you will do when you need to figure out how much you owe the government and how to pay. If you don’t know how much sales tax to charge your customers then you should consult with someone now. Otherwise just get your plan together, which could be as simple as a nation-wide tax company or your uncle who is an accountant. Get an idea of how much it will cost you and when you will need to file so that you don’t get any last minute surprises.

• Know your audience and where they buy. You probably already know your audience - these are the people you are creating for. Take a minute to think about it a bit further, though. You’re moving to a full-time business and will need all the sales you can get. Perhaps there is an audience you wouldn’t normally consider, or an additional product that you can add to your repertoire. Do a bit of brainstorming (write it down for later reference) of who might want your products and where you think they are likely to shop. This could even include physical stores. Don’t limit yourself to online sales only - some physical stores are happy to take the right items on consignment.

• Do the math to make sure you are making a profit. Get a friend who is good at it to help if you need to, but you can probably do some basic estimating on your own. How much does it cost you in supplies to make one of your products? If you are offering free shipping, what is the average shipping cost for your products (shipping isn’t free for you)? Is there anything else that you need to pay for in order to create a product and get it in the hands of your customer? What about fees for where you are selling? All websites that support multiple sellers charge fees of some sort, as do payment providers like PayPal or merchant credit card companies. Take all of those costs and then deduct them from how much you are planning on charging for the product. This will give you a very rough idea of how much profit you can expect to make per sale. Then take a look at how much time it takes you to create the product. You’ll be spending time on other things as well, but this can give you a general idea of how much per hour you can expect to take in if sales go well. Are these numbers acceptable to you? Be sure you will be making enough money for it to be worth your time.

• Research. Research. Research. Read everything you can about starting a full-time business.

What’s next?

You’ve done your research and it looks like you can make enough money for it to be worth your time. Next up is getting your products in front of people who want to buy them. There are a ton of sites out there that will give you either your own storefront (where you are expected to do all of the marketing yourself), or will give you access to their marketplace (where the site owner will be doing at least some of the marketing for you). Typically marketplaces have higher fees than custom storefronts. One of my favorites (shameless plug) is Storenvy, which offers both a custom storefront and a marketplace, with the choice of turning one or the other off. If you are really good at marketing then a custom storefront might be for you. Most handmade sellers will opt to sell on one or more marketplaces, such as eBay, Etsy, Amazon Handmade, or Storenvy.

Generally it is best to be on as many marketplaces that you have the time to manage, but you’ll want to start with just one. If you are already familiar with a marketplace (either as a buyer or a part-time seller), then that’s probably the best one to start with. Keep in mind that some marketplaces (like Amazon Handmade) require that you apply and be approved, while others (like Etsy) will let you get started right away. Once you have opened the account it is time to get your products listed following best practices. There is tons of information out there about this, but generally you’ll want good images, detailed and grammatically correct descriptions, and prices that your customers will be willing to pay.

Once you are up and running you’ll need to do some of your own marketing, even if you are selling on a marketplace that does some marketing for you. Let your friends and family know (don’t spam them), open social media accounts and encourage your customers to follow you, and generally get your products in front of as many people that might want to buy them as possible. If you are on a marketplace that allows coupons then reward repeat customers with a discount. Marketing is one of the areas where you’ll want to do more research. Keep in mind that the type of marketing that will work best for you might depend on the type of products that you are selling.

Expand to other marketplaces

Once you have gotten yourself setup on one marketplace, you should consider expanding to others. Marketplaces have a tendency to change their rules and fees regularly, and you never know when one of these changes might hit your business hard. Etsy just started putting an emphasis in search results on free shipping, for example. If you sell custom painted bowling balls and your business model can’t handle free shipping, then this could give your business the wrong kind of strike. The more places you are selling your products the easier it will be to recover from unexpected changes that hurt your business on a marketplace.

Remember that selling in multiple places at once will mean more work, but it doesn’t have to mean twice the work for each place that you add. There are a variety of inventory management services out there that will assist you with sending your products to multiple marketplaces at once, and often they will help you with your order management as well. My favorite for handmade sellers (another shameless plug - the last one, I promise) is Vendio.

If you get yourself up on a marketplace and it doesn’t seem to be bringing in sales, I would encourage you to stay active there anyway. As long as it isn’t costing you much money to be active, and you aren’t spending too much time on it, it is good to have a backup. Also, sometimes a marketplace makes an unexpected change that can be beneficial to your business, and you never know when that might happen and a flood of sales will come in.

Plan for success and also for failure

A business failing can be devastating under any circumstances, but if it was always assumed the business would succeed and no thought to other possibilities was given it can be even worse. Something bad then becomes horrible. On the other hand, businesses have collapsed because they grew too fast and there were no plans for how to handle the expansion. Something good then becomes bad. You will want to be prepared for both failure and success.

If you can start your full-time handmade business and keep working a part-time job at the same time, then do it. You’ll have a backup income should things not work out as planned. Or maybe you have some savings tucked away that you can fall back on if you need to. Or perhaps your spouse is more traditionally employed and those paychecks can meet the needs of your house should it be necessary. Whatever the case, be sure you have a backup plan for the worst case scenario. There will always be risks, but please take steps to minimize them before you begin.

Know your limits and what you are going to do about it if you get too many orders. You know how much you can create in a given period of time. If you get more orders than you can make then you’ll be in trouble. Have a friend or relative trained to help if you need them. This might be someone who can help you create your products, or it might be someone that can help in other areas such as getting your products shipped out to your customers. Temporarily turn off your products if you fall too far behind. Your customers that have already paid you should get priority over those that have not yet ordered. Most importantly, be sure to honestly communicate any necessary delays to your customers. Give them the opportunity to cancel if the delay is longer than you told them when they ordered. The worst thing you can do when overwhelmed with orders is stop communicating with your customers or give them false information.

Remember why you are doing this

Having a full-time handmade business is about making money, but for most handmade sellers it is about so much more. It is about the joy of making something and making it well. It is personal - it is the reason you started creating multiplied by every hour of the day. Remember this and don’t lose sight of it. No matter what products you are making, if you lose your passion I promise you it will show when you create. Remember to take time for yourself and enjoy the flexibility that comes with being your own boss. Don’t skip vacations because you run your own business - take vacations because you run your own business. Most marketplaces have a vacation mode that you can toggle on and off (be sure to keep your customers informed). If you forget to take time for yourself, the chances are your creativity and enthusiasm will slowly leak away. Remember to feed your passion every hour of every day. Happy making and happy selling!

About the author

Nathan Wood is the manager of customer support for VendioHandmade, Vendio and Storenvy. He has over 13 years of experience helping small and medium sized businesses, and is passionate about helping sellers succeed.