4 Fantastic Financing and Forecasting Methods for Your Craft Business

Getting crafty will always be one of your hobbies and dream business ventures. When you actually managed to turn this into a reality you couldn’t believe your luck. Although it took a lot of hard work and perseverance you have managed to turn your passion for arts and crafts into a full-fledged company.

Whether you run it full-time or on the side along your day job, your craft business needs a lot of tender loving care. You have mastered the creative side of your job; that element is second nature to you. However, you need to get on top of the number crunching and planning. Here are a few pointers to help you along the way.

  1. Get on Top of Tax

Every business no matter how big or small needs to stay on top of their taxes. If you have never been great with numbers this can come as quite a shock, so you might want to consider hiring an accountant. Alternatively you should definitely look into MTD for VAT, which entails the government’s new Making Tax Digital scheme. Using approved accounting software you might soon have to store your financial records digitally. Check out the details and see if your business might need to get on board with this initiative. This will not only help you to keep track of your monthly earnings within your craft business, but it will also help you to forecast your future income.

  1. Scaling Up

In order to grow your craft business it is important to identify a clear value proposition. Do you believe there is room in your market and will your audience want more of what you’re selling? As soon as you are able to answer this question, you will be able to scale up your business. Whether you’re selling your creative wares to local retailers or investing in your own headquarters, your growth needs to be fueled by the fact that there is value for everyone involved.

  1. Reducing Your Costs

If you want to make more money on a monthly basis from your craft products, then you might want to consider reducing your overall costs. You could substitute lower cost materials where possible, but you should be careful not to compromise the quality. When considering a change in your materials, be sure to take note of all factors involved. You might need to change your method of manufacturing and in some cases the composition of the product due to a simplified production process. For example, switching to a less expensive card for your greeting card creations might reduce their appeal to your target audience.

  1. Pricing Strategies

When you’re pricing your products you need to consider a few key factors. You need to understand what your target customer would be willing to spend, track and compare how much competitors are charging and understand the relationship between the quality and price of your craft products. When you spend days creating delicate and intricate items, the labor costs are going to be higher, however the simpler items will naturally be slightly less. As the business owner you have a great deal of flexibility in how you set your prices so think carefully about what you’re offering before you finalize the price tag.

No matter what your individual craft business entails, you will always need to be on top of your finances and forecasting. Making money from an art-based business is difficult, but not impossible, especially when there is a niche audience for your products. Whether you’re carefully constructing paper flowers for wedding centerpieces or you are hand designing novelty greetings cards, there will always be room for you to expand your horizons, make more money and continue to pursue your creative passions.

This post has been contributed by Ryan Gatt, it may contain affiliate links.

 

 

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