12 Ways to Check if you’re Choosing the Right Craft Business

If you’re considering starting a craft business, you’re obviously a creative person.

This means, you probably have LOTS of product ideas.

But for many reasons, choosing the right idea and staying focused is important.

 

Why you need one clear idea for your craft business

You’re starting a small business, and the more products you try to offer, the more watered down your message will be, and the more time and money you must spend to get your business off the ground.

From an organizational, time, budget, and messaging standpoint, it’s better to start with one clear business purpose and 1 – 5 products.

For example, I sew, so I may have dozens of products I can sew and sell at craft shows, such as:

• aprons
• scrunchies
• bags
• cat toys
• etc.

But offering all those items makes my small handmade business unfocused. It becomes a: Kitchen textile/hair accessory/bag/cat business

That’s a lot for a consumer to take in.

It’s also a lot of products for me to buy materials for, design patterns, market, display/photograph, price, etc.

On the other hand, if I choose one clear business purpose, my vision, branding, product line, display setup etc. becomes easier.

For example: A hair accessory business selling scrunchies, headbands, head wraps, and hair ties.

Now that you have an understanding of why it’s important to limit your product ideas when you start your business, let’s look at what you should consider to find the right product/business idea.

 

1 – Check the regulations you must follow

No matter how small a business is, there are laws to follow, which are put in place to protect the consumer.

For example, if I’m thinking about selling baby clothes in the US, there will be safety standards to meet, labelling and testing regulations I must follow, certification requirements, etc. 

If I want to sell those baby clothes to customers outside of the US, I’ll need to ensure I’m following those country’s regulations too.

Research how many regulations you must follow, the type of liability risks you may have, permits you need, etc.

They can add time, money, and risk to a business.

>> Check out Laws for Selling Handmade

 

2 – Ensure you can be profitable

In the beginning, higher startup costs may leave you with very little or no profit. But once those startup costs are covered, you should profit from each sale.

Determine how much it will cost (in materials and wages) to make each product you plan to, or are considering selling.

Then estimate how much it will cost (outside of production costs) to operate your business.

You’ll need to spend time and money on craft show fees, website or Etsy fees, photography, shipping materials, etc.

>> Here are costs to consider: Common Costs of a Craft Business

Ensure you can price your products to cover all those costs.

>> Here’s how to price and cover costs: The Right Way to Price a Handmade Product (Step-by-Step Formula)

If you have no idea how much it will cost to operate your business, your can find the average price of the product you plan to sell, the work backward to determine the budget you’ll have.

If the average price for a scrunchie on Etsy is $10, at that price, can I cover my production costs, a portion of my overhead costs, and be left with a profit?

>> Here’s a detailed article on how to reverse-engineer your prices: How To Keep your Product’s Price Competitive

 

3 – Estimate consumer demand

If consumers aren’t searching for or interested in the products you want to make, you won’t have sales.

Keyword research is the best way to check for demand without making a product and seeing if it will sell.

Learn how to use a tool such as Moz, Ahrefs, Semrush, etc. to see (approximately) how many people are searching for your product online each month, and if they’re searching for various versions of it (e.g. apron, cute apron, waist apron, etc.).

Alternatively, you can get a rough idea of demand by finding Etsy shops that specialize in the product you’re thinking of selling, and see how many sales they have.

If you don’t plan to sell online, you may want to visit craft shows and farmers’ markets and see if the booths selling similar products to yours are busy and making sales.

You can also visit specialty shops in your city to see if they stock the item(s) you’re thinking of selling and if they do, consider asking sales associates if they’re popular.

 

4 – Make sure your market isn’t too competitive

Unless you’re inventing a new product that solves a new problem, consumers are already buying your product from another business.

You want to determine how much competition there is and whether that competition will get in the way of you making sales.

Keyword research tools will give you an idea of how competitive a keyword is but you can also visit Etsy or craft shows and see how many businesses are competing for customers in your space.

If your products fall under one of the more popular Etsy and craft show categories (e.g. jewelry, knitted scarves and hats, stationery, etc.), you’ll want to consider if you can find a way to stand out.

 

5 – Ensure you have a way to stand out

You can’t rely on consumers paying attention to your products simply because they’re “your unique designs”.

If you want your craft business to hit the ground running, you must find an element to highlight that consumers care about.

You might:

• target a different market of people (e.g. creating hair accessories for redheads)
• create a niche product (e.g. scented scrunchies)
• focus on a product feature your competition isn’t (e.g. scrunchies made from biodegradable material or rhinestone embellished scrunchies)

What’s most important is that you base on decision on what a group of consumers care about.

 

6 – Find a sales channel that’s a fit for you

Consider how you’ll sell your products and if the sales channels you have access to are conducive to that style of selling.

For example, if I was thinking about selling big heavy items online, shipping costs and options may make that hard. If instead, I was planning to sell those items at craft shows, I’d consider if I have a vehicle to transport those items back and forth, and someone to help me set them up. The logistics of getting those big heavy items to customers may make me rethink the business idea.

Selling wholesale to retailers may be another option for a craft business. In this case, you need to consider if wholesale prices (50% of your retail price) will allow you to cover costs and profit.

Think about whether you want to sell your product online, at craft shows, or wholesale, and if your product idea is a good fit for your preferred method. 

 

7 – Determine if you can properly present your products

How you present your products online, at a craft show, or in a retail store can make or break sales.

How will you photograph your products if you plan to sell them online? Will you need someone to model your products? If so, are you able to hire a model? Do you have the space and proper lighting to set up a “photography studio” in your home?

If you plan to sell at craft shows, how will you display your products? Do you have the budget to buy the proper display fixtures and will you be able to haul them back and forth to events and store them in between?

 

8 – Make sure you have an appropriate selling window

Consider your sales goals and the ideal months to sell your products in.

A product like scrunchies will sell year-round. On the other hand, a product such as children’s backpacks will sell mainly during the back-to-school season, which may make it hard to reach my sales goals for the year.

 

9 – Ensure your idea has room to grow

You may want to add more products to your business down the line, and those products should be related to the product you’ve built a brand, following, and customers around.

Are there opportunities for you to branch out?

For example, if I start my craft business with aprons, I can expand into oven mitts, pot holders, tea towels, placemats, table runners, fabric napkins, etc.

On the other hand, if I start a business sewing pet Christmas stockings, I may be limited by how many other related products I make and sell to the same audience.

 

10 – Look for content & collaboration opportunities

The fastest way to make a potential customer lose interest in your marketing is to push sales on them every chance you get.

You need non-promotional content to help feed your social media/newsletter/website content and keep followers/readers engaged.

>> Here are non-promotional marketing ideas: 13 Non-Promotional Emails to Send to your Newsletter List

What’s the interest that drives your target market’s purchasing and can you come up with content related to it?

For example:

>> Someone who buys a kitchen apron is interested in cooking/baking. This provides content opportunities for my marketing (e.g. sharing a pumpkin spice cookie recipe in the fall) that will keep my target market engaged and not bored by another sales-focused post.

>> If I were selling hair accessories, the related interest might be hair trends and hairstyles.

>> If I were selling cat toys, my target market’s interest would be cats, and more specifically, keeping them entertained. I could share content about caring for a cat, fun activities, etc.

I would consider which type of content would be easier for me to produce regularly.

This also creates opportunities to collaborate with businesses that share your target market.

For example, if I go with the apron idea, I could work with popular food bloggers to have them promote my aprons to their audience.

 

11 – Ensure you can build a connection with your customers

Choose a target market you understand and can connect with.

If you’ve never owned a cat, it’ll make it hard to know what cat owners want, the problems they face, the language they speak, etc. Although you may be able to sew a cat toy, it will be hard to build an authentic business cat owners connect with.

Without that connection, consumers are less likely to feel compelled to buy, remember your business, talk about your business, etc.

 

12 – Make sure you’re passionate about your idea

Last but not least, consider if you’re truly passionate about the product you’ll be selling. It’s always fun to make an item the first few times; when you get to be creative from start to finish.

The shininess wears off when you make that item hundreds of times and your free time revolves around marketing it, talking about it, shipping it, etc.

Starting a handmade business is not the way to make a quick buck. It will take a lot of effort and time to build something successful. So make sure your heart is in it.

 

I hope these tips help you narrow down your craft business idea and land on the perfect one. Please share any other tips in the comment section!