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How to Start a Craft Business in 9 Steps

by Winnie Li Posted on November 24, 2023

If you have the skill, style, and finesse needed to take a raw material and turn it into a beautiful piece of craft, then you're in luck — and you shouldn't let such a gift go to waste! Stitching, painting, and printing your way through life is a sure way of unwinding and expressing your artistic side. You can take a step further by turning your hobby into a profitable business.

Reports show that the global craft market is a multi-billion dollar industry — and there's room for more growth in the coming years.

Imagine taking your fair share of the multi-billion dollar industry. And you can do that by creating beautiful pieces of craft and putting them up for sale.

Starting a craft business is not rocket science. You can get started by merely putting some things in place. One of which is identifying the right laser engraving and cutting machines for a craft business.

The right laser engraving and cutting machine can be used to work on a wide range of materials like leather, glass, acrylic, wood, or paper. Whatever material you will be using during the course of your craft business, a laser engraving and cutting machine can be used to work on it.

crafts made with laser machines

Laser-made crafts

Aside from the versatility that comes with laser engraving and cutting machines, these machines are built with a high level of accuracy and precision. And that translates to the creation of high-quality crafts. Safety and speed are other features that make laser engraving and cutting machines the best fit for a crafting business.

Here are steps to starting a craft business.

In This Article

  • Step 1: Finding Your Craft Niche
  • Step 2: Decide Where to Sell Your Handmade Items
  • Step 3: Write Your Craft Business Plan
  • Step 4: Choose a Craft Business Name
  • Step 5: Obtain the Necessary Licenses, Permits, and Insurance
  • Step 6: Create Your Crafts
  • Step 7: Price Your Handmade Items
  • Step 8: Promote Your Craft Brand
  • Step 9: Start Selling Crafts Online

Step 1: Finding Your Craft Niche

As a crafter, you must have been using your skills to produce multiple products. However, you need to settle on a single product when starting a craft business. The product could be the favorite piece you like crafting, or the piece of craft you're most skilled in making. You need to figure out how the craft product fits into the craft market and the niche they're in.

Alternatively, you could decide to produce crafts around a particular season of the year like Halloween or holidays.

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Coming up with a particular craft item helps you narrow down your focus. It also helps you to easily gather the supplies needed for the creation of the crafts.

Forming a brand identity won't be tedious once you've figured out your niche — and it becomes easy to quickly streamline the production process.

If you're unsure of the niche to dive into, you could consider making and selling any of these crafts.

When considering the niche to focus on, you need to take a close look at the situation within your local community. Are there a variety of places where personalized tumblers are made? Then making personalized tumblers won't be the ideal niche for you.

Conduct robust market research to figure out the gap within the market, and identify the right openings for your craft products.

You also need to figure out how existing businesses within your preferred niche have been operating over the years. What are these businesses doing well, and how can you step in and do better?

Step 2: Decide Where to Sell Your Handmade Items

When it comes to selling your handmade items, you could either sell them online or offline. Figuring out where to sell your crafts online is quite easy. You could opt for Etsy, Amazon Handmade, or other online marketplace. If you have some resources at your disposal, you could launch your online store.

You don't need some technical skills or a sleek website to start selling online. You could start by merely setting up a Shopify store. There are lots of free themes on the platform — and you're sure to choose the right theme that fits your unique style and personality. After that, you could choose your desired colors, fonts, and other elements.

Etsy, eBay, and Amazon are great platforms that generate massive exposure for your business. However, you will have to spend some coins to keep things running on these platforms. And the fees on these platforms add up in the long run.

The exposure gained from these marketplaces is a plus, but there are downsides to using these marketplaces — and that's the fierce competition that comes with them. As a crafter, you will have to do lots of work if you want to stand out in these online market environments.

There are options for selling on social media platforms like Instagram, TikTok, and Facebook. However, before you settle on a social media platform, you need to identify where your customers hang around. For instance, if your target audience is the Gen Z, then you are better off selling on platforms like TikTok.

Before launching a local store, you should try testing the waters. And that could be popping up at a local craft fair to gauge the level of interest among your target customers. You could also try selling your crafts at a local boutique. All these help you figure out what appeals to your customers before you fully commit to running your craft business.

There are lots of factors that are to be considered when it comes to figuring out where to sell handmade items locally. One of which is the amount it will cost you to set up your local store.

Step 3: Write Your Craft Business Plan

After finding your craft niche, and coming up with where to sell your homemade items, you will have to write your craft business plan. Writing a craft business plan is not a tedious process, and there's no need to fill your business plan with some complex business jargon. A simple business plan can serve quite well for your craft business.

As a crafter who is starting a business, your business plan is a blueprint that shows you the route you need to take, and how to go about your business.

When writing a craft business plan, you need to take the following into consideration:

  • What you will be selling
  • The amount of time you will devote to the craft business
  • The resources you can invest upfront. These resources could include the already-made crafts that are up for sale
  • The places where your crafts will be sold, and how to go about it. These could be where to sell crafts online and where to sell handmade items locally
  • What is your long-term plan for the business? Is it a part-time business, or are you considering diving into it full-time in the coming years? You need to know where the craft business is going, and what's needed to take it there.

Your craft business plan should be fluid. It should give you the room to come up with a more detailed plan when it's time for some business expansion. However, you can get started by creating a simple business plan.

Step 4: Choose a Craft Business Name

Your business name is a key ingredient that makes your business stand out from the crowd. Your craft business name should be easy to remember, catchy, and show what you're selling. When someone comes across your business name, the person should have a clue of what your brand story is.

Your business name should be available for use. To know if your business name is available for use, you will have to go through the list of business names on your state's directorate website.

Alternatively, you could do a quick trademark and Google search to know if you're clear to use the business name. After settling on a catchy business name, you will have to reserve a domain name for your business. You will also need to start thinking of the right social media handles for your brand.

Step 5: Obtain the Necessary Licenses, Permits, and Insurance

It's time to do some heavy paperwork. Whether you're starting as a sole proprietor or a small business owner, you will need to get the necessary licenses, permits, and insurance. Without these papers, you'll be exposing yourself and the business to some fines and legal trouble.

The type of licenses you will need is dependent on your business location, structure, and business type. There are times you will need multiple licenses at the federal, state, or local levels. If you're in the United States, you will need to read through the SBA. If you're not a resident of the United States, you should go to the right agency in charge of business licensing and permits.

Crafters who will be starting their business from the comfort of their homes should check the home business licensing requirements. If you'll be running an online store, then you will have to look into the online seller licensing requirement.

Furthermore, if you need extra pairs of hands to help you run your craft business, then you will have to get the employer identification number (EIN). Without the EIN, it will be somewhat difficult to file your taxes.

You can never go wrong with business insurance. If you will be managing multiple employees in your craft business, then you will need to take your business insurance seriously. Aside from business insurance, you will need commercial property and general liability insurance.

If you're unsure of how to get started, hire the services of a business lawyer. A business lawyer will give you the whole legal picture of your business. This way, you will become aware of ways of protecting your business against legal issues in the future.

Step 6: Create Your Crafts

At this point, you will have to create some crafts. And that involves using laser machines to create crafts that appeal to your customers. Laser machines are versatile tools that can be used on a wide range of materials. With laser machines, you will experience little to no issues when working on materials like glass, leather, wood, paper, or acrylic. Regardless of what you will be using to craft your product, laser machines will help you get the job done.

Another pro of using laser machines for your crafting business is its low maintenance. The tool is somewhat easy to maintain, and it will help lower your operating costs in the long run.

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Crafters can polish their skills by enrolling in professional crafting classes and online workshops. You could also try exploring any idea you have in mind.

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Step 7: Price Your Handmade Items

Adequate pricing is a sure way to ascertain that your production costs are properly covered and that you get to make some profit. The continuity of your craft business will be an issue when your handmade items are not properly priced.

Proper pricing is a reflection of the value placed on your crafting skills, time, and handmade items. It also shows that you have respect for your craft. As a crafter, you want to be properly compensated for your hard work — and pricing helps you achieve that! If you want to attract customers who appreciate your handmade items and value them, then you need to put more effort into your product pricing.

Generating sustainable income from your crafting business is tied to your product pricing. And if you get it right, financial growth and stability won't be an issue for you.

Since the finances needed for the procurement of materials, equipment, and tools are generated from the craft business, proper pricing of your products is a way to ascertain an evergreen inflow of resources. This will, in turn, help you buy high-quality materials and tools for the business.

Having a good grasp of how to price handmade items is an integral part of starting a craft business.

Step 8: Promote Your Craft Brand

Now your craft business is all set up, you will have to make people aware of your brand offering — and that's where promoting your craft brand comes in.

Promoting your craft brand helps you attract the right customers to your business. The amount of resources spent during the promotion is largely dependent on your marketing strategies and budget.

When it comes to promoting your craft brand, you can opt for techniques like email marketing, influencer marketing, or social media marketing.

Here is how to use these promotion techniques.

  • Email Marketing: Email marketing helps you establish relationships with your audience. With email marketing, you can easily reach out to your customers and prompt them to become repeat buyers. To get the most out of email marketing, you will have to segment your customers and send each customer segment promotional emails that are in line with their interests.
  • Influencer Marketing: Influencer marketing involves taking advantage of the community that has been already established by your preferred influencer. Before partnering with an influencer, you will need to ascertain that such influencer shares similar values with your brand. Working with influencers helps you increase your brand reach, and grow your brand awareness. Look out for influencers within your niche and work with them.
  • Social Media Marketing: Social media platforms offer an avenue for connecting with your customers. To get the best out of social media platforms, you need to figure out the right platform where your customers hang out. After that, create an optimized profile on the platform, and start sharing content about your craft business. As a general rule, you need to pay attention to what your customers are saying in the comment section of your social media accounts. These comments are an accurate reflection of their thoughts. If you're up for some video tutorials, you will have to launch a YouTube channel.

Step 9: Start Selling Crafts Online

Selling crafts online is arguably the most efficient way of making sales. Having a good grasp of how to sell craft online is one of the ways to stay ahead of the competition. To get started, you will have to use online stores.

Online stores increase your brand reach, and you will most likely meet customers from across the globe. Unlike offline stores where your sales are limited to the people around you, online stores have no limitations in terms of the people who can reach out to you.

Availability and low overhead costs are other reasons to start selling crafts online. With a reliable customer support team, you can respond to customers 24/7 with no restrictions. This will, in turn, boost customer satisfaction. Satisfied customers will most likely make repeat customers. Overhead costs are somewhat negligible in online stores. You will be merely concerned with the subscription fees if you're using platforms like Shopify.

Investing in quality pictures is a sure way of drawing attention to your handmade items. When it comes to publishing your crafts in online stores, you should use compelling descriptions and an eye-catching image of your products.

Finally, selling crafts online gives you the opportunity to tell your brand story. Customers are interested in your story. And sharing your story is a way to build an emotional connection with them.

Conclusion

Starting a craft business isn't a complex process. By following the nine steps in this guide, you will easily set up your craft business and get everything running in no time. Regardless of how long you've been making craft, you can always transition and build it into a viable business.

To get started, you will need to have a good grasp of your niche market and put some business structures in place. After that, you will most likely experience a slow, steady expansion of the business.

There are lots of great tools and platforms to help you get started. Tools like laser machines are easily affordable, and you can create a wide range of homemade items with them. Setting up an online store on platforms is quite easy — and you can navigate through these platforms to figure out how they work.

Now you know how to start a craft business, what kind of craft business will you launch in the coming week(s)?

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