How to Start a Small Craft Business

A craft is a pastime or a profession that requires some particular kind of skilled work. In a historical sense, particularly as pertinent to the Middle Ages and earlier, the term is usually applied to people occupied in small-scale production of goods, or their maintenance, for example by tinkers. The traditional terms craftsman and craftswoman are nowadays often replaced by artisan and rarely by craftsperson(craftspeople).

Historically, craftsmen tended to concentrate in urban centers and formed guilds. The skill required by their professions and the need to be permanently involved in the exchange of goods also demanded a generally higher level of education, and craftsmen were usually in a more privileged position than the peasantry in societal hierarchy. The households of craftsmen were not as self-sufficient as those of people engaged in agricultural work and therefore had to rely on the exchange of goods.

You never know where a small craft business will lead. A sought-after product is the result of a unique craft idea produced by a skilled craftsperson. But, a successful small craft business requires both creative skill and business savvy supported by a plan.

Starting your own craft business can be a great way to earn extra income while pursuing your passion. In fact, you may find that your home-based business soon turns into a full-time endeavor!

Things Needed

• Craft to sell
• Licenses and permits
• Bank account
• Cash

Instruction:

Step 1

You are going to need a business license. Visit your city’s web site or go to your city office and obtain the criteria package and application for a business license. A basic business license is generally very inexpensive. Each year, at the anniversary of your business license renewal time, your city may require a report from you that will determine the renewal fee.

Step 2

Depending on the types of products you make, your city may require a fire permit. This may lead to an inspection of your home and the area of your home in which you work.

Step 3

Resale license or Use permit. If you live in a state that collects sales tax, and you intend to sell your products to the general public, you will need a Seller’s Permit or Resale License. Visit your state’s web site or call your State Board of Equalization for an application. There is usually no fee for a resale license; however, (depending on your state’s guidelines) you will be required to submit quarterly and annual reports that will determine the payment you will make to the state.

Step 4

Identify a craft that will be the base for a profitable business. Your analysis should show a market for the craft, the ability to make the product profitably and the availability of components.

Step 5

Name the business. Find a name that is catchy and describes what you are selling. Check with your secretary of state's office to see if the name is available. Most small craft businesses are operated as a sole proprietorship with the legal name of the owner. If another name will be used to market the product, then register a fictitious name with the state.

Step 6

Obtain permits and licenses. Some jurisdictions restrict the types of businesses that can operate from home. Check with local authorities for requirements.

Step 7

Register to collect sales tax with the department of revenue for your state. Most states require a percentage of each sale to be remitted quarterly. Some cities and counties have an additional tax. A tax-exempt number is issued during the registration process so materials to make the craft can be purchased tax-free.

Step 8

Obtain a business bank account. Keep personal finances separate from the funds of the small craft business.

Step 9

Set up an area to make the product and run the business. Allow adequate space to store materials, make the craft and display finished pieces. Also designate a space to handle administrative functions, such as paying bills and accessing the computer. A home-based craft business will significantly reduce start-up costs.

Step 10

Purchase materials. Research manufacturers that provide components at a cost that will be lower than the local retail store to improve the profit margin.

Step 11

Build your inventory. Whether you plan to sell your crafted creations out of your home, online, at craft fairs, community farmer’s markets or at a yard sale, you need enough inventory stock to attract customers. Do you plan to consign your items? Meet with a retailer that accepts consignment items. Present samples of your craft item(s). The retailer might accept one piece or a dozen. Be prepared to fill the order.

Step 12

Market the craft items. Look at a number of outlets including craft fairs or craft malls, through consignment with local stores, on your own website, or through a community websites such as eBay.com or Etsy.com

Step 13

Network, network, network. Join an existing crafter’s group or club, or start your own. There are literally thousands and thousands of people just like us who would love to exchange ideas, share a customer base, band together in your own community to have a craft fair of your own. Does your local craft retailer have a bulletin board? Look for crafting groups you might join, or post your own note inviting crafters to form a club with your similar interests. Attend a few Chamber of Commerce breakfasts or luncheons or mixers. Watch for artists' and crafters' forums in your city. Become visible.

Tips

• Keep in mind too that there are a lot of free resources to help you get going, as well as the paid resources. You can search under craft show display to find more help.
  
  
• Something else to keep in mind is where you will be selling your crafts. Carefully planning this can make all the difference. Make sure that your products match the show, and aren't out of place for the type of customers that will be there.
  
  
• Determine if you have storage space for your inventory, materials and completed items. If not, consider renting extra space.
  
  
• Make stuff that only takes a little while to make and is easy.
  
  
• Continue to improve your craft. Join professional organizations and read magazines in the area of interest to stay up-to-date on trends.

Reference

• How to Start a Small Craft Business