Identify the sort of business you want – whether it’s having your hobby pay for itself, using it to supplement your salary or having it as your sole source of income. This will determine your approach.
Apply sound business principles
Research your market
Who is your customer? Build a profile of potential customers. Make a large poster-size collage of what you think they look like, the products they buy, the cars they drive, where they shop, where they would holiday. The more real you make them, the better you’ll be at giving them what they want. What is your market? Estimate consumer demand and your position in the market. Get to know your competitors and what prices the market is allowing. Is there room for growth or is it going to reach saturation point soon?
Write a business plan
This is the map for your journey. It will help you focus, keep you on track and give you a way of measuring your progress. Keep your business plan to the point and make sure that it includes:
Descriptions of your products or services.
An analysis of your market.
A profile of your customers.
How you intend making yourself known.
Finances – what you have, what you need and what you anticipate making.
A SWOT analysis: strengths, weaknesses, opportunities and threats. Find the opportunities in what you want to do and match them to your strengths. Don’t avoid or deny weaknesses and threats – it’s dangerous and could spell disaster. Rather face them and find a constructive way around them.
Build your brand
Presentation is crucial. This includes business cards, products, how you display your products, the outlets you choose, your own attitude, how you present yourself and the relationships you build with customers. Make sure that your product is of the highest quality. It should be professionally and creatively packaged. Use the best raw materials you can afford.
Choosing an outlet
Your product must match the outlet. The ‘feet through the door’ must be those of your type of customer. Some of the most popular outlets for hobbies and crafts are craft markets.
- You do the selling, and no-one sells your product better than you. You have access to immediate feedback and have the opportunity to interact with your customers and create a loyal customer base.
- It eats into manufacturing time. Indoor craft markets where you rent a shelf and pay a percentage of your takings are also becoming popular. The advantage is that they are open every day and you don’t need to be there; however, there is no-one on site to promote your products. Other outlet options are hosting a craft market at your home, selling to retail outlets, selling by mail order, and having a website so you can sell over the Internet. Don’t forget the arts festival opportunities such as the National Arts Festival in Grahamstown, the KKNK in Oudtshoorn, Aardklop in Potchefstroom and the many other smaller festivals countrywide.
Making a profit
- One of the most common mistakes crafters make is undercharging. There are basically three types of costs: raw materials, manufacturing costs, and hidden costs such as electricity, telephone, petrol, car maintenance and the percentage the craft market deducts.
- Analyse your product and list everything that goes into it, including indirect costs such as paintbrushes, needles, thread and so on, and work out proportional costs. Then add a 75% to 100% mark-up.
- Don’t forget to include a salary for yourself, even if you don’t draw one for the fi rst couple of months.
- Shop around for the best prices for raw materials. Develop relationships with suppliers and ask for a discount if you buy from them regularly.
Start small, keep your overheads low and plough everything back into the business to ensure a healthy cash flow. Grow your business slowly and steadily. If possible, don’t incur a lot of debt when you start out, as repaying it can be a heavy burden.