Getting Started

Getting your creative business off the ground
by Susan Beal

Say you make knitted pirate cuffs or cool resin jewelry. Your friends love your work, and you get stopped on the street and complimented all the time. After the hundredth time someone wants to know where you found your postmodern charm bracelet or skull wristwarmer, it dawns on you that maybe you could sell your handmade work somewhere. How you get from making things for fun to making things to pay your rent and your car insurance can be quite a process, but I can tell you that I've never taken a business class in my life and if I can pull it off, I bet you can!

I started making jewelry in high school, and learned how to sew four years ago. I made lots of different kinds of bags and clothes, gave them as presents, and wore them to work and out at night. Getting complimented on something I made myself was so gratifying! I started sewing a small collection of skirts and handbags around the time that two friends of mine opened a new shop, Seaplane. They asked if I wanted to try selling any of my skirts there, and I brought four of them by on a Saturday morning. A few hours later, one had sold!

I now have my jewelry and handbags in twenty stores and still do custom clothes out of my studio. It's hard work, but I wouldn't trade it for anything. I've learned a lot of things the hard way, and I can tell you that the two most valuable things I've figured out in the last four years as a businesswoman are:

• Don't take things personally.
• Stay super organized.

Both are much easier said than done, but believe me, they help.

Cards and Tags

Shop owners and customers will take you much more seriously with professional cards and tags for your work. Put your name, your business name, contact info, and website (if you have one) on your cards. Try designing them yourself, or ask a friend—I traded a pendant in exchange for mine. You can print and cut them yourself at Kinko's, or get free ones made at Vistaprint. After you get your cards made, never, ever leave the house without them.

For sew-in clothing tags or custom hangtags, I highly recommend NW Tag & Label (2435 SE 11th Ave in Portland, 503-234-1054). They'll work with your own design or create something new. Once you have tags made, they'll keep your design on file forever-very handy for reordering. They also carry stock size and washing instruction labels at very reasonable prices.

Online Sales

Selling your work online can transform your business. Creating a simple website, finding hosting, and creating a shopping cart are easier than ever. Services like DotEasy or Hexstream Media provide inexpensive hosting; if you sign up with PayPal, they offer a free shopping cart. If you can't make your own site, trade for the design—that's what I did to create mine, susanstars.com.

Get in touch with other handmade businesses you like online to trade links. With more links to your site, you'll have better placement on search engines, and more traffic. List your business on resources like I Buy DIY and BUST's Girl Wide Web for maximum visibility, too.

Make sure your URL is on your tags and cards, and add it to your e-mail signature if you like. Add an opt-in e-mail list on your site if you want to send a periodic newsletter mentioning updates, sales, or new products.

Slow Months

We all have them, don't panic! Use the time your business is, um, less demanding to update your site, work on new samples and products, trade links, approach a few new stores… or just take a week off and get away from the sewing machine or letterpress. You will be busy again, so my recommendation is to enjoy the downtime while it lasts.

A second income can really help take the pressure off. I freelance as a writer and editor, and it helps a lot.

Craft Sales

Hosting your own craft sale, or participating in one locally, is a great way to have your work out for sale and get your name (and cards) out. There is usually a fee of 10%+ of sales, or $10-50 flat fee, for a table, though it varies quite a bit. If you join a craft sale or show, find out the details—if you need to provide your own table, lights, and other accessories, how early to set up, etc.—well in advance. Bring your own tablecloth and displays, and plenty of change—I like to start with at least about $20 in ones and $30 in fives.
Shows vary a LOT, but they really help. When you sell things directly, you get a better percentage of the profit. Getting the exposure helps too, it will bring people to your site when they take your cards and check stuff out later, or call you up for a custom project. Also, if your work is tactile (like mine) it will really sparkle in real life as opposed to on a screen. Experiment with different displays and try using multilevel configurations to draw the eye.

In the weeks before, promote the event through press releases, e-mail, postcards, flyers, craigslist, word-of-mouth, and anything else you can think of!

Many shop owners or buyers stop by craft sales to scout for new vendors, so doing events like these can really increase your visibility. Plus you can usually trade for other cool handmade stuff by the end of the day…

Trading

This is the most fun thing about selling your handmade stuff—swapping it with other artists! People you meet through shows or sales usually don't want to schlep everything home at the end of the day either, so propose a trade if you have your eye on something good. Don't take it personally if you get turned down—we all need the money sometimes.

Outside of the crafty business universe, try approaching your hairdresser, web designer, massage therapist, or favorite coffeehouse or restaurant about trading your cool stuff for their cool services.

Good luck, and keep checking out PDX Super Crafty for monthly updates on running your own business without losing your mind, marketing, an advice column, and other handy resources, as well as crafty project ideas and a universe of links to other cool sites.

Business Plans
by Torie Nguyen

Writing a business plan is an important part of starting a new business. Why write one? I'll give you two good reasons.

1. Creating a business plan forces you to think through all of the important aspects of running a business and decide how you are going to approach them. It lays out your vision for the business and helps you set goals on how to achieve that vision. Later, you can use the plan to help evaluate your progress.
   
2. You will have a well-thought-out document to show potential investors.

So what goes into a business plan? Basically, it's:

• Description of the business
• Marketing
• Finances
• Management

Visit the US Small Business Administration's website at http://www.sba.gov/starting_business/planning/basic.html for a detailed list on each section of a business plan and helpful instructions on how to write one.

Marketing

Marketing is the aspect of business that really allows you to be creative. There are so many ways to promote your business and it's really up to you how you choose to go about it. Here are some of the basics…

Press Releases: Press releases are written to notify the media of your business and any new products, changes, and promotions that you want them to know about and hopefully publicize. If you can find out the name of the person you want your press release to go to, you will have a better chance of it getting there. The important thing to remember while writing a press release is to be clear and concise. You want the reader to find it newsworthy, and if they want more information, they will ask you for it. For tips on writing a press release, visit www.poewar.com/articles/releases.htm, or search "writing press releases" on a search engine for more results.

Press Kits: Another method of getting your company and products in front of the media is putting together some press kits. Press kits are generally folders that contain press releases (one for each new product or event), images (slides, transparencies, photographs, or digital images on CD), catalogs, and fact sheets or company information. Just remember that less is more and that you want your press kits to look professional.

Internet Marketing:
-Search engine submission -- Some web hosts provide free search engine submission (like www.ipowerweb.com), you can do it all yourself, or pay a company to do it for you. Whichever way you choose to do it, being listed in the search engines is invaluable for every website because it allows people all over the world to find your business.
-Link Exchanges – Email other online businesses that have the same audience as your site and ask them if they would like to swap links with you. Exchanging links is a nice, reciprocal way to promote each other’s businesses and expose your website to new people. Also, the more sites that link to yours, the higher your search engine rankings will be.

Word of Mouth: Word of mouth is an amazingly powerful form of advertising. Keep your customers happy and they will likely share their good experience with their friends. Pass out stickers, buttons, business cards, etc. as often as you can. Try to network with people you know and meet new people as much as possible. Put yourself out there and ask others to help spread the word!

Stores and Sales

Stores and Sales
by Susan Beal

Once you have perfected a few of your designs, try approaching small, independent stores you like around town. Call during slow hours (weekday afternoons are usually a good bet) and make an appointment with the manager or buyer. Bring a selection of your best-made pieces and your cards. I know this can be nerve-wracking, but be confident in your work! You're doing the buyer a favor bringing cool stuff in; otherwise he or she would have to go out searching for inventory. Try to be open to constructive criticism/feedback, too; if the buyer is a jerk, write off the store, but suggestions from people who look at cool stuff all day can strengthen your designs, too.

If you offer different designs or fabric choices, a simple catalog or flip book of photos is very helpful for showing the range of your work. Name or number each piece for maximum simplicity (like Resin Ring in design #4, or Butterfly Bag in #7 denim lined with #2 red cotton). If you do one-of-a-kinds only, number or name them clearly too.

A $3.00 sales order invoice book is invaluable here for keeping simple records of how many pieces or samples you are dropping off and how much you are selling them for. Leave one carbon copy with the shop owner and keep one for yourself. That way you'll know for sure how many, how much, and how long they've been there.

Check in about once a month to see how things are selling.

Pricing

This is a truly difficult part of the job. There are a few good ways to get started pricing your work.

One is the standard formula of tripling your materials and paying yourself a decent hourly wage. Another is to ask several friends or crafty businesspeople what they would pay for a piece. Ask shop owners their opinion, too; you can start something out at the upper end of your price range and lower it after a few weeks if it hasn't sold yet.

Consignment vs. Wholesale

There are two ways to get paid for your work:

• Wholesale means the store will pay you outright for your pieces, either when they receive them or at net 30 terms (within 30 days of getting your merchandise and invoice). The store typically doubles your wholesale price, so you will be paid 50% of the retail price.
  
• Consignment means that the store will pay you for a piece after it sells, and the percentage you'll receive will be set between 50 and 70%. There is no guarantee things will sell, of course-you may be getting things handed back to you after a few months; be prepared to trade old pieces out for new ones.

Either way, you should get paid in a timely fashion. Many shops pay on either the first or fifteenth of the month for the previous month's sales. Consigning is a little trickier than wholesaling-ask for a list of which pieces sold, so you can check it against your own records and make sure everything is in order. This is especially crucial if you are dealing with a shop in another city! Good communication is essential.

Trade Shows
by Rachel O'Rourke

Being in a conference center at a trade show is sort of being on an airplane for four to five days straight with unusually perky people. Trade shows take place throughout the year, but generally everything is backwards as far as seasons go. Stores do their Christmas buying in the summer and their summer buying in the winter. So in the dead heat of summer you can find yourself surrounded by animatronic life-size Christmas figures!

Trade shows are a must for manufacturers already working with reps. Rep companies charge manufacturers for show space; these charges can range from $100 to upwards of $800 per show. Each manufacturer receives a space on the tradeshow floor or in the showroom during the show. It is a great idea to go to as many trade shows as possible when you are first starting off with a rep. You can show them how you describe your goods and build relationships with the reps so that they are excited about selling your goods after the show. Buyers love to meet the people who actually design the products. Often your presence will increase sales. Remember to drink a lot of water, get enough sleep, and load up on coffee.

Sometimes manufacturers represent themselves at trade shows. Small local trade shows are a great place to get started, and sometimes you can share a booth with fellow crafters to cut down the costs. If you decide to buy your own trade show booth, you must enter into the experience with the idea that your company will survive if you do not make any of your money back. In other words, don’t spend tons of money on a booth, hotel and transportation if you do not have a company slush fund.

The great thing about having your own space is that you have complete creative control over how you present and sell your product. You can create your very own world within a 10’ x 10’ space and sometimes make good money in the process.

Welcome to the World of Reps!
by Rachel O'Rourke

What is a Rep?

A rep (AKA manufacturer rep) is a salesperson working for a larger company who markets and sells products such as gifts, jewelry, or clothing (basically anything manufactured) to stores. Reps work on commission, typically 15% of each sale, in specific regions around the U.S. and the world. Most reps charge you 15% of each sale, which you pay on a monthly basis. Reps also work to sell your goods at trade shows that occur throughout the year in major cities, like New York, San Francisco, Atlanta, Dallas, and Los Angeles. You, the manufacturer pay your rep the same 15% commission on all sales, along with a show fee, to participate in trade shows.

Finding a Rep

Finding a rep can be time-consuming, but the more time you put into the process, the better your chances are of finding a rep that will be a great fit for you and your business. The Internet can be a good place to begin your search. Try putting "gift manufacturer rep" or "apparel manufacturer rep" into a search engine; it can yield lists of reps all over the country. Another way to search for a rep is at online sites for gift marts around the country. The California Gift Mart hosts a great site chock full of information on reps and lines that they represent in their showrooms.

A more guerilla tactic is to think about cool jewelry, clothing, or gift items that you have seen in stores that you would like to sell into as a manufacturer. You can look up the websites of many of these companies, and sometimes you luck out by finding a list of their reps around the country. If you already sell into local stores, there is a good chance that store owners will also have recommendations for reps that they like to work with who may want to represent your line.

Another great way to find a rep is to attend a trade show, which gives you the chance to shop for a rep. You can check out what lines they represent and get a feel for who they are in person. Most of the time I advise just taking one of their cards and then once the craziness of the show is over, you can contact them to discuss your line.

What do I do when I find the name or website of a rep I may want to work with?

Do not hesitate to call reps and talk to them about your line of clothing, jewelry, etc. You must be super proactive and sometimes abnormally excited about your line to get their attention. Feel out the rep company by asking them about the lines that they represent and how many lines they represent. If you are a small company, chances are you do not want to work with a large rep group. Large rep groups tend to work with companies that mass-produce their lines, while smaller rep companies can be open to and appreciate handmade goods. If a rep initially complains about your price point (which is the wholesale price of your products) and goes on to tell you that she can find the same kind of thing made overseas for half the price, say thank you very much and hang up as fast as you can. You will have these conversations, but it is important to keep in mind that there are reps out there who only work with people who manufacture in the U.S. and who love handmade goods.

Once you establish that the rep may be interested in your line, you will be asked to send a catalog and samples. Depending on what you make, 1-5 items is a good amount of product to send along with a catalog that can be anywhere from 1 to 12 pages. The most important thing about your catalog is to keep it simple and visually appealing. Keep in mind that people who know nothing about your product may need to eventually use your catalog to sell your work.

Follow up with reps no more than two weeks after you send your products. Ask them for feedback. Do not get discouraged if they say it may not be a good fit. Ask them immediately who they can recommend to you. All reps know other reps, and they often refer manufacturers to one another. If the rep wants to move forward, they will send you a written agreement… good luck!!!

Here's some helpful websites about Annual Gift and Trade Shows:

California Gift Show
Americas Art
GLM Shows
NYI Gift Show

Apparel Reps verses Gift Reps

Think about who you want to buy your goods, or who is already buying your goods. Are you selling into clothing stores, gift stores, etc? Basically gift reps work with small gift stores around the country, while apparel reps work with clothing stores and boutiques. Thinking about who your target audience is may help you decide to work with a specific kind of rep.

Nightmare Reps

Every manufacturer I have met has experiences at least one often more than one nightmare rep situation. Just know that you are not alone.
Sometimes a rep will pick up your line as an experiment and then not sell anything. It is important to not take this personally, to immediately start looking for another rep, and to ask for your samples back. If a rep has worked with your line at a show and over a four-month period without any sales, this is a good sign to break up with your rep.

Bookkeeping and Taxes

Taxes
by Torie Ngyuen
The thought of business taxes can be very intimidating. Luckily, there are a lot of resources out there to help a small business owner. And if you can't find the answer you are looking for, or don't want to have to deal with it, look for a good accountant. (It will save you a lot of headaches!!)

Here is some very basic tax information to help get you started. For more detailed information, please visit the tax links.

The type of business you own will determine the way in which you should file your taxes. Many small crafty businesses are Sole Proprietorships or Partnerships, which means the business owner(s) declares all profits and losses on his/her own tax return. For information on how to file for LLC, LLP, Corporations, and S Corporations, please visit the Business Structures section on the IRS website.

It may also be necessary to pay estimated taxes for your business. Paying quarterly estimated taxes helps avoid owing penalty fees and fines on your regular tax return as a result of owing too much money in taxes.

Be sure to hang on to all of the receipts for anything you plan to deduct or write off on your tax return. An accordion file that separates receipts by month can be handy, or you may find another method that works better for you… just don't throw anything away! I recommend consulting an accountant to find out all of the possible write-offs for business expenses. They know all the rules and can help you avoid doing anything sketchy that might get you in trouble later.

Visit our links page for helpful business and tax links.