You never know where a small craft business will lead. In 2005, Sheri
Schmelzer started selling Jibbitz, a crafted charm that decorates Croc
shoes, in her basement. One year later more than 8 million pieces were
sold worldwide, according to Croc Shoes News. 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.
Step 1
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 2
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 3
Obtain permits and licenses. Some jurisdictions restrict the types of businesses that can operate from home. Check with local authorities for requirements.Step 4
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 5
Obtain a business bank account. Keep personal finances separate from the funds of the small craft business.Step 6
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 7
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 8
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 or Etsy.
Tip
- Continue to improve your craft. Join professional organizations and read magazines in the area of interest to stay up-to-date on trends.
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