I wish it was that easy! There is no way that any business can be built in 3 steps, but I did get your attention didn't I?
We realize that we have been conspicuously absent from the blog for the last several months, and we like to think that maybe some of you were curious as to why? Lots of growth, changes, re-organizing and more made both Judi and I rethink how we want to move our little business forward. We have a new online store launching soon and will be looking for a new design team as well. It's time for a fresh start. I thought I would share some of what brought Judi and I to this point (now 4 years into our business) and some of our mistakes (just a few...) and some good lessons too.
Have you ever wanted to start a craft business? Maybe a kit club? You love this hobby, so maybe it would be fun to have a business in the craft industry? You've probably heard people tell you to follow your passion? It is certainly important that you do something that you are passionate about, but manufacturing and retail are not for everyone.
Finding your passion.
Judi's passion is creating. And she is really good at it. I know because I grew up with her (yes, she is my sister). This is the girl who would create a restaurant in the family room for my friends and I to have lunch, complete with a menu! I was maybe only 7 or 8 years old, but knew then that I had the best sister in the world. OK, she did yell at me when I left the Barbies strewn on the floor in our bedroom, but I think she has forgiven me. Fast forward a few years and Judi is sewing, knitting, remodeling homes, and doing just about anything creative that she can get her hands on. I so wish that I had that gene. I am really good at "copying" what someone else has designed, but don't come up with the ideas too well on my own. Judi's passion right now is designing stamps.... and she is really good at it. We have had a few others create stamps for us too, but she has this amazing ability to put a set together, always thinking about how YOU (the customer) will use the stamp set. Judi is right where she should be.
My passion is project management. I love to take on a project and see it through to the end. If I don't know how to do it, then I will figure it out. I will take classes, I will read books, whatever gets me to the knowledge. Judi wants to design stamps and I wanted to start a business. Perfect combination. If you are just the creative one, then find someone else to help you with the business side. I promise that you will thank me later. If you have to do it all, then make sure you like business just as much as you like the creating. Because the business side will probably take up more time than the creating side. Let's assume you have your dream team in place, now where do we start?
What the heck is a business plan?
Did you know that you should actually PLAN your business? You are not supposed to just open the doors and hope that someone will come. I've watched lots of brick & mortar businesses in our local town 0pen and close within a year or two. I've also heard lots of people say that if they had known ahead of time how much work it would be to open a business, they never would have started.
My local Small Business Administration had a class called "NxLevel" where you would learn all of the ins & outs of building a business and by the end of the class have a business plan. If you need to get a loan to start your business, then this step is crucial. A bank won't even look at you if don't have a business plan. We were going to "boot strap" (more about that in the next post) so I didn't need to do a business plan, but I wanted to make sure that we did this right. You can find out more about the NxLevel classes here: http://www.nxlevel.org/ Contact your local SBA and see if they offer similar classes. The time you spend here will be super valuable and may keep you from making some big mistakes down the road.
CHA, cha, cha?
No, not the dance, but CHA, the Craft & Hobby Association. The industry group that hosts our major buyer conferences twice a year. We joined as a retailer at the beginning (because it was less expensive) and we were not yet making any stamps. We went to Memory Trends, Winter CHA Expo and any other industry event we could easily get to on the West coast. Wow! Those events are amazing. You've seen the bloggers showcase the events and share the new products. They just had the latest summer CHA in Las Vegas this year. Will Pink Persimmon exhibit at CHA in the near future? More on that to come. We'll share the ins & outs of making that decision soon.
Joining an industry group is really important to your new business. You can get access to lots of industry reports. That is a big part of what your membership fees goes towards. CHA will hire researchers and conduct industry surveys and then share this data with their members. Super important info for that business plan we talked about too...
So find your industry group. If you want to open a quilt store, then CHA is not your group, you probably want to join the Quilt Trade Association. Or if you want to open a custom cabinetry shop, then you need to find the organization that represents all the cabinet makers in the world. A quick little google search should set you up. Find your peeps and start to hang out with them (both online and in person if you can). They will give you a ton of good info. My husband hangs out with the California Landscape Contractors Association (he sells sprinklers and controllers to landscapers), so he has definitely found his peeps. And the events are fun (if you like sprinklers). (CHA is definitely more fun.)
Can we make any money?
Well, yes, that was the whole point of the business plan, right? Do you know how many stamp stores are located in the United States? Lots! Do you know how many scrapbook stores are in the US? Lots.... well, there was a lot. We have all seen our local scrapbook stores close over the last few years. I only have one left within 30 minutes of my home (not including the big box stores). But that doesn't mean that they are all gone. There are still plenty of them out there. If you do your research, you can figure out how many of those stores you would need to sell to. The calculate how many of them would re-order from you, and see if the numbers start to make sense. Would it take you one year to make back your investment? Two years? How fast do you need the ROI (return on investment) to come through. What happens if you never get your investment back? Will the kids be able to go to college? All good questions you should ask yourself before you open the door. Actually, WAY before you open the door.
That's probably enough info for today. More to come in my next post. We'll talk about setting up an online business, how to establish a merchant account, how to reach your customers, tips on managing a design team, how to find your manufacturer, how to sell wholesale, and a slew of other business-y stuff that I have learned along the way. I might even share the names of some friends that have helped us tremendously with advice, info and some downright brilliant ideas.