What to Know Before Starting a Creative Business

Posted September 1, 2016 by Thirty-Something Angie in Business & Productivity / 2 Comments

In today's world of e-commerce, anyone can turn their hobby into a profit. Read on to find out what I wish I knew when starting a creative business.

Hey, you!  You’re a crafty girl, right?  You like painting mugs or making wreaths, right?  I bet at some point, the thought has crossed your mind that you could turn those hobbies into a creative business.  Why not?!

In today’s world of e-commerce, it seems like anyone can turn their hobby into a profit.  In fact, that’s true.  I’ve done it, and know you can, too.  For the past 7 years, I have helped support my family with my income from my knitting.  There have been good days and bad days, but overall, it has been a very rewarding experience, and I’d do it all over again if I could.

Still, if I’d spent more time learning before I decided to start a business, I think things could have gone much more smoothly.  I’m hoping that by writing this, it helps you have an easier time starting up than I did.

Read on to find out what I wish I’d known before starting my creative business.

A Creative Business is Still a Business

One of the biggest hurdles to cross when turning your crafts into profit is to start thinking of your venture as the business it is.  So many people discount it, because it’s crafts.  Still, if you’re trying to make a profit, it’s a business first, and a hobby second.  Some things you should consider doing before you really dive in include:

  • Market research.  Figure out who will be interested in your product, and where they hang out the most.
  • Business plan.  Don’t worry about a detailed report with a 10 year plan, but you should have a basic idea of where you want to go and what you want to accomplish.
  • Perfect your brand.  Make sure you have rock-solid branding across your website, all social media, packaging, and business cards.  Use the same language, the same graphics, and the same style everywhere so you are easily recognizable.
  • Research pricing.  Make sure you choose a price that allows you to value your worth.

This is just a small list of topics you should figure out before starting your business, if you want it to be a long-term venture. Below, I’ll go into further detail about each of these topics.

Do Your Market Research

Market research is one of the first things to do when figuring out your business.  This is how you figure out what type of person would be interested in your product, and where they hang out.  You can use this information to make sure your product is seen by the right people.  After all, if you sell kids’ clothing, you want to make sure it is seen by parents, right?  What use is it to you if a teenager shopping at the mall sees your clothes?  It doesn’t matter how adorable it is, it’s not very likely that it’ll convert to a sale.  Instead, you’d want to find out where your target market hangs out, and put your product right under their noses.  Some ideas of what you can include in your market research are:

  • Age
  • Gender
  • Income
  • Interests
  • Lifestyle

This is certainly not an all-inclusive list, but it’s a great place to start when doing your initial market research.

Related: 5 Social Media Mistakes You’re Probably Making

Create a Business Plan

The term “business plan” can sound so daunting to someone just starting out.  Visions of 10 page reports detailing income goals, marketing analysis, and product outlines used to come swimming through my mind when I’d think of writing out a business plan.  However, it really doesn’t need to be that difficult.

As a creative business, unless you are asking for start-up loans, you really just need something to keep yourself on track for the goals you have in mind. Some things you can include in your business plan are your goals for growth, your marketing plan (a great place to include your market research!), your mission statement, and your pricing structure, which we’ll get into more in a minute.

Creative Business

Perfect Your Brand

This is where a lot of people usually get lost and start wandering (metaphorically speaking, of course).  Your brand is about so much more than a logo and a few colors.  It encompasses everything about your business and product.  The way you interact with visitors on your page and the way you write out your posts online are both part of your brand.  The quality and style of your product is part of your brand.  Your packaging is part of your brand.  All of these things combined help you give off a cohesive look and feel to customers coming in for the first time.  This makes you memorable and recognizable.  Customers that recognize you and remember your product are more likely to come back, and tell their friends.

Related: My Top Tips for Starting a New Business

Research Your Pricing

Finally, it is time to research your pricing.  And I mean really research it.  This is a really tricky part, because so many crafters feel price guilt.  I hear all the time that “I craft to keep myself busy, so I don’t feel right charging for my time.”  Here’s the bottom line, though: If you don’t value your own time, no one else will, either.  Handmade goods take a lot of time.  You should be including all of that time in your pay.  You might love what you’re doing, but it’s still work.  One day, if you’re working your business correctly, you’ll be busy enough that you’ll be missing out on time with your family.  Make sure it’s worth it by asking a price that values your time. That was the whole point of working from home, right?

There are a lot of formulas you can find to help you figure out your pricing, but my personal favorite is (material x 3) + hourly rate.  Yes, I said hourly rate.  Obviously, since you’re not clocking in and out every day, this won’t be exact, but you should be taking into account all of the time that it takes to make your product.  Things to consider when adding this up are the time you spend:

  • shopping
  • creating
  • taking pictures
  • marketing
  • packaging each piece

Figure out an Hourly Rate

So, what should you be charging per hour?  That’s a tough one.  Personally, I thought about how much I’d expect to make if I worked outside the home.  The amount will change as you grow and advance in your skill, just like it does for any other job.  Whatever you do, just please make sure you are making more than minimum wage.

This formula doesn’t work for everyone, but it’s what I use.  Maybe your material costs are extremely low, but your product takes days to complete.  In that case, you’d use a different formula to create your pricing structure.

Put it All Together

I’m so thankful every day that I decided to start my creative business.  It wasn’t always easy.  In fact, it wasn’t even always fun!  I’ve learned a lot along the way, and I hope I’m able to pass some of that on to new creatives hoping to build their own little crafting empire from home. If you do your research, make a plan, build a solid brand, and have professional and consistent pricing on your items, you’ll have a head start from where I began!

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Getting ready to start a creative business and turn your hobby into an income? Here are 3 things I wish I'd known when I got started! #wahm #creativeentrepreneur

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2 responses to “What to Know Before Starting a Creative Business

  1. Shawonda Irons

    This is exactly what I needed to read!! I have such a hard time moving forward into ‘Business territory’. It’s very overwhelming at times! Breaking it down to like this, is much less intimidating.

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