If you’ve got a hobby of craft then you may be considering setting up as a business full or part time. We’ve helped hundreds of craft businesses start accepting card payments and they’ve shared some top advice on how to start a successful craft business that helps you make money and a living.

1. Know how much your mark up should be – A mistake a lot of craft businesses make is by undervaluing their products. If something takes you a week to make, you should charge more than the materials plus how much you would want to earn in that week. The mark up is the profit, and you need to make that profit to invest in marketing, materials upfront and all kinds of things essential to your craft business. You need to price your goods based on how much they cost to make rather than what you think someone is willing to pay. You can always alter the price a little to make it a round number but the last thing you want to do is charge five pounds when it costs you £4.75 to make.

2. Can you save on materials? As a craft business one of the easiest ways to make more money from your products is to reduce the amount you spend on the materials and components. There are a few easy ways to do this, the first is buy in bulk, most suppliers will offer a discount for larger orders, if you do this you’ve got to be aware of the impact it may have on your cash flow though. Another is just to negotiate harder, it may be difficult at first, but when you realise that a 5% discount might make the difference between being able to make a living from your business or not it’s much easier to push your suppliers harder.

3. Know where you’re going to sell – Are you going to sell through craft fairs and events? Get your products stocked in other shops? Set up your own storefront? Or maybe sell online? The decision of which route to market you are going to choose will have an impact on your business model so it’s worth thinking about this carefully.

4. What’s the most cost effective way to sell your products? Your route to market as a craft business will have a big part to play in how profitable your business is. It might make sense to sell directly via a stall at craft fairs but you may have to pay the hire fee upfront, and if you then don’t sell as much as you would like you may lose money. Getting someone else to sell your products in their shop or their stall might be less risky but they won’t have the passion you have so may not be able to sell as many.

5. Know Your Break Even Point – Break-even point is the number of sales you have to make to cover all your fixed costs and variable costs for that amount of sales. This is a number every aspiring business person needs to know, as it informs you how much you need to sell every month to start making a profit. Before you start buying materials or equipment you need to work this out, it may surprise you how many you need to sell, if that number seems insurmountable you need to go back to the drawing board.

6. How do want to accept payment? If you’re selling high value goods at events where your product maybe an impulse-buy it makes sense to try and make it as easy as possible for the potential customer to buy.

7. Consider a Mobile Card Terminal – If you’re going down the route of selling at external events you will increase your sales potential if you can accept cards, especially if you are selling high value items. You can actually get chip and pin machines that work with a mobile phone SIM card, which means as long as you can get a phone signal you can accept cards. This is a great option if you’re selling at craft fairs.

8. You need to be able to make enough to make a living – If you are considering your craft business as a full-time venture you need to be honest about the amount of items you will need to sell. You will know your variable costs used to make your product, you should have an idea of your fixed costs like equipment, so can work out a profit per sale. Once you have this you can work back the numbers you need to sell to make a living, is this sales number realistic? Sometimes it can be useful to work out how many sales a day this would equate to.

9. Work at ways to reduce your costs – As a craft business you will be using your talents to produce something. One of your biggest costs will be the elements used to create the product so anything you can do to reduce that cost will make it easier for your business to make money.

Tags: Craft, Start-Ups