1. Under-Pricing Work
Too may crafters price their work too low! Remember, you should not only make sure your pricing includes your materials, but also needs to compensate you for your marketing (show fees, traveling expenses, etc) and your labor.
2. Not having a plan
No, you do not need to hire a high-priced firm to make a business plan, but you do need to have a well thought out yearly plan for your business. What shows will you attend and when? How much should you spend on supplies every month? Thinking these things through and writing all this down will help you stay on track and keep you from taking on too many obligations for the year.
3.Starting Too Big
Lots of beginners will go out and borrow thousands of dollars to start their crafting business. Buying the best equipment might seem like a good investment at first, but when lean times come those payments can break the financial back of small business owners in a hurry. Likewise, you should not start out with the top rated shows. Local craft shows (see our CraftLister link) are a great way to get your feet wet in the business without investing thousands in show fees.
4. Attending The Wrong Shows
This is a problem that many people selling fine crafts and artwork discover when they attend their first street festival. If people are paying $ 5.00 for hot dogs, you would think they would not complain about the price of your high-end crafts. Wrong! Fine crafts and artwork belong at shows where customers appreciate the work involved. Not at the “Texas Chili Jamboree!”
5. Not Budgeting
Nobody likes to make a budget; therefore many people simply do not. A budget is not some elaborate financial statement that takes days to write. It’s just a way for you to tell your money what to do instead of your money telling you what to do! Plan your next month’ budget for your business at the end of each month. Start with minimum expenses at the top (things you must have to function like show fees that are due, and the utility bills on your workshop) and work your way down the list to things you would like to do, should you make enough money (like having those brand new custom fliers printed).
6. Not Planning For Lean Times
When planning your budget make sure you allow for savings. That fantastic show in DC may not pay out like it did in years past. If you have funds available for emergencies, you will be able to weather the months when you do not make enough to meet expenses. A good rule-of-thumb is to have 3-6 months of operating expenses in savings. Yes, for some businesses this may be a substantial amount. But trust me, if you break your arm and cannot produce product for a while, this type of savings will literally save your business.
7. Taking Negative Comments Personally
I’ve seen too many first time exhibitors almost in tears because of a rude comment from someone browsing their booth. “I can get a gift like that at Wal-Mart for half the price!” or “I’ll just make it myself.” Are two comments you can count on hearing at almost every event.
Unfortunately there are obnoxious people in the world and a lot of them seem to find craft shows the place to practice their skills at offending people. Don’t listen to them! If they had any creativity, the skill and the dedication, they would be at home making their own crafts instead of bothering you. While you should always listen to constructive criticism like “you should consider making this in blue”, there is no need in beating yourself up because of comments from someone who has nothing else to do than harass crafters who are confined to their booths.
8. Following Trends
Just because that booth next to you in Houston was selling floppy-eared bunnies right and left does not mean you should start making truckloads of bunnies for your next show. Trends come and go. So do craft business owners who follow them. Yes, you should definitely create lines that may be trendy. If snowmen are “in” this holiday season, you may want to create some to compliment your other items. But you should never simply change your product lines altogether to follow the crowd.
9. No Tax Planning
One of the number one reasons for small business failure is poor tax planning. In order to stay in business, you must pay your taxes! Once your profit margin is higher, that takes planning. I recommend an accountant, but you can use QuickBooks or other tax software to do your own taxes. The main thing to remember is that when you make money, there will likely be taxes due. Make sure you have the funds available BEFORE April 15th. It’s also a good idea to keep a separate checking account for your business. Keep any tax savings in this account for easy transfer from you to Uncle Sam.
10. Spending Too Much
Do you actually need that brand-new trailer to haul your display and inventory show-to-show? Or will that old van you’ve been using work just as well? How about a used trailer? Used equipment does the same job and can be half the cost. That also goes for your canopy, cash register, computer and anything else you need to run your business. Remember you are in business to make money, not spend it!