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How do I start a craft and design business?

Design & Craft Enterprise Business Essentials by Marian McDonald, Thinking Outside the Box.

Five things a craftperson or designer must do: get to know your market, check out your competitors, get your pricing and costing right, get your paperwork in order, and plan out where you want your business to go.

The starting point for any new business must be market research. Unless you produce something that people want to buy, you will not make any sales – and your business will fail. Successful businesses anticipate customers’ needs and wants and provide products and services to meet them (look at the level of pre-launch sales that Apple generates for each new iPhone or iPad, or that Bloomsbury Publishing achieved for each of the Harry Potter books). So, before you decide what you are going to make, spend some time talking to potential customers to find out what they want to buy. Later, you’ll need to expand on this research, but it’s your starting point.

When planning your business you need to consider:

In doing your market research, you need to know the total size of the market – locally, regionally, nationally or internationally, depending on your ambitions. Then, you need to focus in on the part of the market that you are targeting and within that smaller market,  you need to identify the numbers of people that you can realistically reach – your ‘addressable market’ – perhaps you are only targetting those who buy ceramic pieces at crafts fairs, which will be an even smaller part of the total market. Then you start the other way around – bottom-up:

The true market size lies somewhere between these top-down and bottom-up calculations.

You also need to understand your potential customers, talk to them.
Find out:

  1.     What they like / dislike
  2.     What they are prepared to pay
  3.     What colours / fabrics / materials / shapes they prefer

It will take you some time – and, frustratingly, as you gather new information, you’ll find that it contradicts earlier ‘facts’, so you have to revise your plan – maybe several times. But that’s simply the nature of a start-up.

A useful way of making sure that you cover all the areas you need to consider – including some you might not have thought about – is to take part in a Start Your Own Business course. The Local Enterprise Offices run these courses at frequent intervals countrywide. And, at the end of each course, you will be encouraged to develop a formal business plan and will be directed to appropriate further supports and sources of assistance.

Add to the training you receive on the Start Your Own Business course by reading start-up books – you’ll find a selection in your local library and many more online. And flesh out your learning by talking to other craftspeople and designers. Look for those whose businesses are 18 months to two years’ old – their start-up experiences will be fresh in their minds and will be more relevant to you than someone who already has ‘hit the big time’. Add these people to your network; seek and take their advice when you need to make important decisions.

And then you simply need to go and do it!

Resources

Next Steps

When you are ready – when your research convinces you that there is a market for your product or service – then consider the formalities of setting up a business.

You need to plan how to produce your product and service – and how to deliver it to your customers. In tandem, you must plan your marketing – to let potential customers know your product or service is now available and where and how they can buy it – which must be directed towards generating sales.

Pricing and costing your product or service are critical, which will lead you into the financial aspects of your business. Most entrepreneurs don’t want to go here – they prefer to leave this to their accountant (or worse, ignore it altogether). But finance is a critical part of your business – as critical as your skill as a craftsperson and designer. Ignore it at your peril. All you need is a basic understanding of the impact of transactions (sales, purchases, payments in and out, loans, credit terms, VAT), on your business – leave the complicated parts to your accountant.  

And last, you will need to document your plans for your business in a formal business plan. Even if you are lucky enough not to need to raise funding for your start-up, your business plan will guide you through the early stages of being in business. If, like most entrepreneurs, you do need to raise funding or are looking for grant-aid, you definitely will need a business plan to explain your business idea and to underpin your application for funding.


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