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Deciding to take your craft hobby to a business is no small feat. There is a lot to consider when making the leap not the least of which is always money!
Turns out the phrase you have heard over and over again “You have to spend money to make money” is more true than any of us would like and start up costs can get out of hand very quickly when starting a new business. And on top of all of the things you are already planning on spending money on there will be unexpected expenses and if you are not careful these could sink your new business before it even really begins. I say this from personal experience!
So if you are looking at turning your craft into a business here are 5 of the biggest expenses I didn’t factor into my start up costs but really should have!
An accountant and accounting software – I was so scared of messing up my finances and taxes when I started my small business that one of the first things I did was find a great accountant to work with. I knew there was going to be a cost involved but I didn’t realize how much it would be! It was totally worth the cost but be prepared to spend a few hundred at least to get your business set up right and avoid a bunch of headaches later.
Wholesale first order minimums – One of the best ays to lower the cost of making your items (and therefore increase your profits!) is to seek out and open whole sale accounts with the places you purchase a lot of materials from. I knew I would have to purchase a lot of product at once when buying supplies whole sale but I quickly found that most of the companies I wanted to set up whole sale accounts with have minimum opening purchases that range from $1000- $3000. That is SO MUCH MONEY when you are starting a business but spending the money up front usually ends up saving you in the long run
Photography– When your craft is your hobby your phone may be a great camera for documenting and sharing your makes. When you make the move to business however it is time to upgrade to a higher quality camera or even invest in working with a photographer to help put your products best foot forward. Take the time to weigh out the total cost of DIYing photography vs hiring a photographer. Once you add in the studio lighting, backgrounds, photo props, editing software, and everything else you need to have the best possible photos it may end up being cheaper (and quicker!) to work with a pro.
Inventory storage – Spoiler alert, you need somewhere to store the products you plan on selling! Especially as a person who has pets, finding storage solutions that keep products clean and safe before they venture to their forever home was super important. For me this meant investing in shelving and plastic bins that seal. For you it might mean renting a storage space, moving items around your home, or so many other things but investing in a great inventory storage and management option will keep your products in tip-top shape and make shipping easier.
Marketing and branding – If you really want your business to flourish having a strong and focused brand is so important! Things like business cards, banners, mailing cards, product tags, team apparel, and branded packaging all help establish you as a real business and help cement your brand in the mind of your customers. And then when you have a cohesive brand, it then often takes time, strategy, and money (aka marketing) to help get your brand in front of the right people. This is a cost that can vary greatly but is so important to helping you sustain a profitable business going forward.
There will be costs to starting your business but if you are prepared a head of time and plan accordingly they will help you create a successful and thriving business that fulfills your maker heart!
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