Creating a Successful Craft Business

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<ul><li><p>CREATING A SUCCESSFUL</p><p>CraftBUSINESS</p><p>Rogene A. Robbins</p><p>Robert O. Robbins</p><p>ALLWORTH PRESSN E W Y O R K</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page i</p></li><li><p> 2003 Rogene A. Robbins, Robert O. Robbins</p><p>All rights reserved. Copyright under Berne Copyright Convention, UniversalCopyright Convention, and Pan-American Copyright Convention. No part of thisbook may be reproduced, stored in a retrieval system, or transmitted in any form,or by any means, electronic, mechanical, photocopying, recording, or otherwise,without prior permission of the publisher.</p><p>07 06 05 04 03 5 4 3 2 1</p><p>Published by Allworth PressAn imprint of Allworth Communications, Inc.10 East 23rd Street, New York, NY 10010</p><p>Cover and interior design by Joan OConnor</p><p>Page composition/typography by Rosanne Pignone, Pro Production</p><p>Library of Congress Cataloging-in-Publication Data</p><p>Robbins, Rogene A.Creating a successful craft business / Rogene A. Robbins and </p><p>Robert O. Robbins.p. cm.</p><p>Includes bibliographical references and index.ISBN 1-58115-277-91. Handicraft industriesManagement. 2. HandicraftMarketing. </p><p>3. SellingHandicraft. 4. Small businessUnited StatesManagement.I. Robbins, Robert O. II. Title.</p><p>HD9999.H363U67 2003680'.68dc21 2003008987</p><p>Printed in Canada</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page ii</p></li><li><p>Contents</p><p>List of Worksheets viii</p><p>Introduction ixHow to Use This Book About the Authors </p><p>Lesson 1DO YOU KNOW WHAT YOURE DOING? 1</p><p>My Story Dont Let the American Dream Become Your Worst Nightmare Things I Wish Someone Had Told Me aboutStarting a Business Dealing with Salespeople HomeworkAssignment Limited Time Worksheet Need More Help Getting Started? </p><p>Lesson 2PRESENTING YOURSELF AS A PROFESSIONAL 10</p><p>Develop Your Professional Identity Your Business Name The Artists Statement Professional Organizations Create aProfessional Image Artists Statement of Rogene A. Robbins, Fabric Artist Do Your Homework Need More Help?</p><p>Lesson 3LAWS, RULES, AND REGULATIONS 22</p><p>Get to Know Your Uncle Sam Attitude Is Everything How Do You Find Local and State Laws, Rules, and Regulations? Your Team of Advisors Other Sources of Information Do YourHomework Laws, Rules, and Regulations Worksheets NeedMore Help? </p><p>iii</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page iii</p></li><li><p>Lesson 4WORKING FROM HOME 34</p><p>Tips for Successfully Working at Home Keeping City Hall Happy DoYour Homework Working from Home Checklist Need More Help?</p><p>Lesson 5GETTING THE MOST OUT OF THE WEB AND YOUR COMPUTER 41</p><p>Finding Your Way around the Internet Networking Online Using Search Engines A Computer Has More to Offer Than Just the Internet Do Your Homework Need More Help?</p><p>Lesson 6REASONS YOU MIGHT NEED A BUSINESS ATTORNEY 50</p><p>Why Do You Need an Attorney? How Do You Find a BusinessAttorney? Do Your Homework Need More Help? </p><p>Lesson 7DO YOU HAVE INSURANCE? 55</p><p>Get to Know Your Agent What Type of Insurance Do You Need? Do Your Homework Insurance Worksheet Need More Help?</p><p>Lesson 8MONEY, MONEY, MONEY, MONEY 61</p><p>So, Where Does the Money Come From? Approaching Your Banker There Is Always Another Way to Go Do Your Homework Need More Help? </p><p>Lesson 9HANDLING CASH AND OTHER FINANCIAL MATTERS 67</p><p>Opening a Business Account Handling Cash Accepting Checks Credit Cards Do Your Homework Need More Help? </p><p>Lesson 10USING YOUR TAX RETURN AS YOUR ANNUAL REPORT 73</p><p>Getting to Know the IRS Schedule C Do You Need to Hire anAccountant? Be Prepared to Pay Quarterly One Last Tip Do Your Homework Need More Help? </p><p>iv CONTENTS</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page iv</p></li><li><p>Lesson 11GETTING THE BEST PRICE FOR SUPPLIES 84</p><p>How Do You Find the Best Price? Alternatives to Retail Buying Supplies Online My Story Do Your Homework Need More Help? </p><p>Lesson 12PRICING YOUR PRODUCTS 90</p><p>The Details of Pricing Artistic Value and Quality Business versus Hobby My Pricing Story So, How Do You Come up with That Perfect Price? Expenses You Need to Cover in Your Pricing Formula Examples of Pricing Formulas Wholesale Pricing Do Your Homework Need More Help? </p><p>Lesson 13MARKETING DECISIONS 102</p><p>Direct Sales Indirect Sales My Marketing Strategy ProtectYour Heart Do Your Homework Marketing Approaches Worksheet Need More Help? </p><p>Lesson 14CHOOSING A RETAIL LOCATION 110</p><p>Choosing Your Location Commercial Leases My Story Do Your Homework</p><p>Lesson 15SELLING WHOLESALE 116</p><p>The Rules for Selling to Retailers Payment and Sales Tax Issues Trade Shows My Story Hiring a Sales Representative Do Your Homework Tracking Sheet for Wholesale Customers Need More Help? </p><p>Lesson 16THE CRAFT SHOW EXPERIENCE 125</p><p>Where Are the Craft Shows? Choosing a Show MakingApplication Getting Ready Designing and Setting Up a Craft Booth Lighting for Your Booth Still Committed to Tables? Common Problems with Booth Design My Booth Design Process Taking It on the Road The Art of Sales </p><p>CONTENTS v</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page v</p></li><li><p>Evaluating the Experience Lessons Learned Going Home Do Your Homework Need More Help?</p><p>Lesson 17SELLING ON CONSIGNMENT 147</p><p>The Contract Fairness Do Your Homework MonthlyConsignment Tracking Sheet Need More Help? </p><p>Lesson 18CRAFT MALLS 153</p><p>Gathering Information Keep All of Your Own Paperwork Do Your Homework Need More Help?</p><p>Lesson 19BUILDING, PROMOTING, AND SELLING FROM YOUR OWN WEB SITE 160</p><p>Free Web Hosting Creating an Attractive Web Site SitePromotion My Web Site Selling on the Internet Advertising on the Web Do Your Homework Need More Help?</p><p>Lesson 20QUALITY PRINTED MATERIALS 173</p><p>Preparing Professional Materials Making Your Materials Readable Do Your Homework Printed Materials Checklist </p><p>Lesson 21ADVERTISING ON A BUDGET 178</p><p>Free and Low-Cost Advertising Public Speaking The Media Do Your Homework Need More Help?</p><p>Lesson 22A BUSINESS PLAN FOR A CRAFT BUSINESS? 184</p><p>Business Is Business Where Do You Start? The Essentials How Do You Put This Thing Together? Do Your Homework Need More Help? </p><p>Lesson 23BRANCHING OUTEXPANDING YOUR BUSINESS 192</p><p>Teaching Classes Custom Work and Special Orders My Story Writing and Publishing Expanding Your Retail Business </p><p>vi CONTENTS</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page vi</p></li><li><p>My Story Do Your Homework Custom Work/Special OrdersInformation Form Tracking Sheet for Article Submissions Need More Help? </p><p>Lesson 24DO YOU STILL WANT TO START YOUR OWN BUSINESS? 208</p><p>Appendix ACAVEAT EMPTOR: RECOGNIZING A LEGITIMATE BUSINESS OPPORTUNITY 210</p><p>Work-at-Home Opportunities Learn to Recognize a Sales Pitch The Internet Filing a Complaint Be Aware of Your Community </p><p>Appendix BRESOURCES 215</p><p>Index 239</p><p>CONTENTS vii</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page vii</p></li><li><p>List of Worksheets</p><p>Limited Time Worksheet 7</p><p>Laws, Rules, and Regulations WorksheetState 29</p><p>Laws, Rules, and Regulations WorksheetFederal 30</p><p>Laws, Rules, and Regulations WorksheetCounty 31</p><p>Laws, Rules, and Regulations WorksheetCity 32</p><p>Working from Home Checklist 38</p><p>Insurance Worksheet 59</p><p>Marketing Approaches Worksheet 108</p><p>Tracking Sheet for Wholesale Customers 122</p><p>Monthly Consignment Tracking Sheet 151</p><p>Printed Materials Checklist 177</p><p>Custom Work/Special Orders Information Form 205</p><p>Tracking Sheet for Article Submissions 206</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page viii</p></li><li><p>ix</p><p>Introduction</p><p>I GREW UP IN A FAMILY OF CREATIVE PEOPLE. A few are professional artists,actors, or singers. Others dabble in creative endeavors for fun and relax-ation. For a few, creativity reaches into all areas of daily life.</p><p>I still marvel at the exquisitely beautiful clothing designs my grand-mother created years ago. The furniture my brother designed and madewhile a high school student still blows me away. And I have to laugh whenI think about some of the craft projects my mom and her best friendundertook.</p><p>Yes, I grew up in a family of creative people, but I also grew up in a busi-ness-oriented family. I still remember my mother and sister-in-law, bothremarkable saleswomen, watching over my shoulder as I interacted withcustomers in my retail store or at shows. Later, after the customer left, theywould pull me aside to give sales advice. My dad always made sure I under-stood basic business principles and sound financial management. I am alsoblessed to have a husband with a business degree and many years of busi-ness and retail sales experience. Yet with all these people in my life to giveme advice and keep me grounded, I have still made many of the mistakestypically made by artists and craftspeople when they try to sell their work.But after selling the work of other artists and listening to artists and crafts-people, both in person and on the Internet, I realized that not everyonehas the advantage of built-in (and sometimes live-in) business advisors. Iwondered how much more traumatic the transition from a hobby to a busi-ness must be for these people. So, I decided to start writing, hoping otherscould learn from my experience.</p><p>This project didnt start out to be a book, however. In the beginning Iwas going to write a few brief, very focused information sheets that I wouldmake available through my Web site. But soon, the sheer volume of infor-mation and the broader vision of my husband took over and those littletwo-page handouts grew into a book.</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page ix</p></li><li><p> HOW TO USE THIS BOOK</p><p>This book is a crash course in the basic principles of business, designed espe-cially for artists and craftspeopleBusiness 101 for crafters, so to speak. Wespent many hours on research for this book, but much of the informationhere comes from our personal experience. That is why we have included somany personal stories and anecdotes. We have definitely been where you areright now, about to go into new territory, full of hope and ambition, as wellas fear and questions. We hope you will be able to learn from our experi-ences and discover that you can survive even the tough times.</p><p>This book is designed to be used as a self-paced business course forartists and craftspeople. In other words, it is something you can use athome as your personal schedule allows. Of course, we also hope it will beused as a textbook in formal craft business classes, but you will still benefitfrom working on your own at home.</p><p>HOW IS THIS BOOK ORGANIZED?You will notice that there is a homework assignment, and often a resourceguide, at the end of each lesson. The homework assignments are designedto encourage you to go ahead and do the planning and the work necessaryto establish your business. Businesses often fail due to a lack of planning, sothese homework assignments are important. Please dont skip over them.</p><p>We encourage you to put your answers to the homework assignments inwriting. Use whatever form is most comfortable for you. If you prefer towrite in a notebook, do that. Or, if you are more of a high-tech type, youmay prefer to set up a computer file.</p><p>Dont forget the resource section at the back of the book. For your con-venience the names of resources pertaining to the information in eachchapter are listed at the end of the chapter. You will find the contact infor-mation for all of these listed alphabetically in the Resource section at theback of the book.</p><p>USE THIS BOOK TO HELP WRITE YOUR BUSINESS PLANEvery business needs a business planeven a craft business. Its a basic toolto help you plan and run your business. So, you may ask, why, then, isthe business plan lesson almost at the end of the book? Because, in orderto complete a business plan, you will need to do a lot of planning andthinking about the kind of business you want to run. Each lesson in thisbook asks you to consider an aspect of your business that is vital to writinga good plan.</p><p>Completing the homework assignments will help you compile andorganize the necessary information to write a business plan. Use the Small</p><p>x INTRODUCTION</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page x</p></li><li><p>INTRODUCTION xi</p><p>Business Administration (SBA) format here or choose your own. There aremany fine books and software packages available to help write a businessplan. How you write your business plan is not as important as that you writea business plan. You wouldnt start out on a trip to a new place without aroad map. Starting a business is new to most of us, so starting out with a roadmap is a good idea. A well-thought-out business plan can be that road map.</p><p>We hope you will take the time to complete the homework assignmentsand use at least a few of the resources included in this book. Let themguide you in planning your trip into the world of business. And dont for-get your road map!</p><p> ABOUT THE AUTHORS</p><p>Creating a Successful Craft Business is not just a textbook. It is also the storyof Rogene and Bob Robbins and their adventures and misadventures in thecraft business.</p><p>In 1990, after several miserable years on the craft show circuit, Rogenemet Bob, who began teaching her how to apply sound, time-tested businessprinciples to her craft business. In 1991 they opened an experimental storewhere they successfully sold and distributed clothing and jewelry designedand made by Rogene and her team of Crafty Ladies. The items sold wellin their own store as well as to other retailers for resale. Bob and Rogeneeventually closed their retail business in Kansas to move to another state.</p><p>With a Bachelor of Science degree in psychology, Rogene has worked asa Qualified Mental Retardation Professional, where she enjoyed using hercreativity to work with people with disabilities. Her education and workexperience in the rehabilitation field have helped her develop and refineresearch skills that have been useful in both the running of her businessand the writing of this book.</p><p>In recent years she has moved away from clothing design to her truelove, fabric art. She now divides her professional time between creatingoriginal art quilts, writing and teaching about art and business, and answer-ing business questions from artists and crafters.</p><p>Bob holds a Bachelor of Science degree in business and a Masters ofEducation degree in counseling. He, too, has worked in the field of help-ing people with disabilities, but he also has twenty years of experience inthe field of business, mainly in marketing, sales, and customer service.</p><p>For the last ten years he has acted as his wifes business manager. Withouthis knowledge, business experience, and insistence on following sound busi-ness principles, her business success would not have been possible.</p><p>Robbins Final.rev 4 5/13/03 5:14 PM Page xi</p></li><li><p>Robbins Final.rev 4 5/13/03 5:14 PM Page xii</p></li><li><p>1</p><p>Lesson 1DO YOU KNOW WHAT YOURE DOING?</p><p>AS YOU HAVE BEEN PLANNING to start your own business has anyone asked ifyou really know what you are getting yourself into? I dont remember any-one asking me that question when I decided to start selling my craft work,but they certainly should have. The sad truth is I didnt have a clue. Let metell you how I started in the craft business.</p><p> MY STORY</p><p>I found myself single and unemployed in a small town in western Kansas; I was too poor to move back to the city, and there were few employ-ment opportunities w...</p></li></ul>