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[54] 5 Ways to Increase Your Profits

You could be eating away at your profits without even realising it. However, there are lots of ways you can make little tweaks to your handmade business in order to increase your profit margin.

I ran a week-long free course a few years back on this topic, and I thought it was time to bring these ideas to you in the podcast.

By following these five steps you will be able to cut out wasted time, reduce your expenses, and therefore increase your profit margin.

For more detail on each point, the links to the course lessons are in the show notes below.

If you have any other ideas for ways that we as makers can cut expenses and increase our profit margins – while still maintaining the integrity of our business – please share them below!

 

 

Quotes and highlights from this Episode:

  • 1. Streamline and organise
  • Disorganisation will eat into your profits.
  • Decrease the time spent to make the same amount of money by being streamlined in your work practices.
  • This includes organisation of your digital life.
  • Work out what you can do today to become more streamlined and organised.
  • Pinterest is a great resource for finding ideas to create a more organised space.
  • 2. Plan your packaging.
  • ‘Packaging can put a huge dent into your profits.’ {Jess}
  • You need to make sure you account for your packaging costs in the cost of your postage or the item itself.
  • Make sure you always have what you need on hand and try and buy in bulk.
  • Don’t forget to add in the time it takes to package the item.
  • 3. Do your calculations and price your work properly.
  • ‘You don’t want to be leaving money on the table.’ {Jess}
  • It is important to get realistic about how much it is costing you to make your products.
  • You need to cover the time you spend marketing and planning not just making.
  • 4. Can you make it reproducible?
  • This is especially important when selling work online.
  • Can you recreate your item?
  • If you can it will increase your production capacity saving time on each item.
  • These items can then become your bread and butter range.
  • Make sure you keep detailed notes so you can easily reproduce work.
  • Think about minimising materials used across your product range.
  • 5. Buy in wholesale or buy in bulk.
  • This will usually involve planning ahead.
  • Do your research, are there things you can cut out?
  • ‘We always have to place our creative and business integrity above our profit margins.’ {Jess}
  • Only you can decide where you can reduce expenses and save money.

 

Download or Listen to This Episode

(You can also subscribe to the podcast and listen to this episode on iTunes + Stitcher – just search ‘Create & Thrive’.)

Thinking about Crowdfunding your Creative Business Idea?

 

 

 

 

After finding there was a lack of retail outlets in Northern Tasmania that suited my weaving and the high quality work of some other local makers, I decided to create one.

This required start-up funds that I just didn’t have. But with the generosity of local, interstate, and international supporters I managed to raise my goal in just 30 days.

I believe my supporters also saw the benefit of supporting local artists and artisans, and they put their faith in me to make it happen!

So, after running a successful crowdfunding campaign I have been asked this question many times: when is it a good idea to crowdfund your creative business idea?

And how do you go about doing it right?

 

Have a clear goal and reason for crowd funding.

As a creative I know what it is like to wonder at the idea of some extra cash floating around to help you on your creative journey. I have imagined the materials I could purchase, the equipment additions and the studio changes to make it more comfortable and functional. And yes, this would be wonderful!

But without a clear goal it is highly unlikely that your future investors will feel that same passion and need as you do.  There has to be a visible end goal to what you want to achieve.

So, rather than seeing crowd funding as a way to continue living the creative life you always dreamed of, you need to use it as a way of leveraging your business in ways that you didn’t think were possible.

 

People will believe in your cause if you do.

Potential investors need to see confidence in your proposal. No one wants to part with their cash for a ‘maybe’ or a ‘hopefully’.

Get someone to proof read your proposal. How do they feel about it? Does it bring up a feeling of involvement or emotion? You need to really tell a story. A positive one full of confidence and passion for what you want to achieve. There is no rushing it.

 

No pain no gain.

This old chestnut is completely true in this situation. It takes days to write a proposal that you are happy with, and once you click submit there will generally be an approval process.

Even when you get through all of this and once you hit the button to make your campaign live there are a million different feelings you will have the whole way through the campaign. Feelings of excitement, hope, self-doubt and anxiety just to name a few. You will feel like you are spamming your friends and family. You will worry that it won’t succeed.

The only advice I can give is to let these feeling happen but only act upon the positive ones. Keeping a ‘fake it until you make it’ view while the campaign is running will help instil that confidence you need to gain your funding.

 

What about rewards?

There are not many people out there that will just donate without hoping for something in return. Of course there will be people that do, and you need to make sure you thank them immensely!

You need to ensure that you can give rewards that will be appreciated (as well as ones you have time to complete!) along with a huge feeling that what they have contributed is so much more than a few dollars.

They have helped you branch out and reach higher in your creative career and you need to make sure they know this. Once people feel invested in your project you can only succeed.

 

So what if you don’t reach your goal?

What if the funding doesn’t happen? Ideally, you need to set your goal to be something you would like to do regardless of the funding.

If you truly believe in it then you need to keep working towards it. Without the funding smaller steps will usually need to be taken. What you need to remember is that through all your marketing of the campaign you have garnered so much support and awareness for what you do that you have already unknowingly taken a huge step in the right direction.

You never know who will read your story, who will discover you and the doors that can open through this.

And of course, just try and try again. Don’t give up and throw away all that hard work. Re-work the idea, the budget and the rewards. Talk to people you trust and people you know who will be honest.

Take a moment to give yourself a pat on the back and for what you have achieved and then give it another red hot go.

[23] What is Profit, and Why is it Important?

When you’re starting out, making a profit might seem like a far off dream. But it’s that profit that will allow you to help you expand your business in the future.

I started my business as a hobby. That start-up phase was an expensive time, but because I was thinking of it as a hobby rather than a business, I was happy to just be recouping most of my expenses through my sales! Does that sound familiar?

Things start to get exciting when you make a little bit of money above the cost of your expenses. Real money.

Money that you can use to buy stuff above and beyond more materials or covering business costs. But you need to remember this:

Until you’re paying yourself a wage, you’re not making a profit.

The money you make above your expenses is your wage, and your profit is over and above this amount.

Profit helps you to grow your business. It allows you to hire staff, start a new side venture, or push the business in a new direction.

Listen in and see how you can turn your biz into a profitable one, and exactly why that is so important.

 

Quotes and highlights from this Episode:

  • Turnover is the amount of money you bring in.
  • Most people start off with just covering the costs of your business.
  • “Your wage is a core part of your business.”
  • Separate your business and personal expenses to make your bookkeeping easier.
  • Business bank accounts are really set up for bricks and mortar stores who need Eftpos and other merchant facilities.
  • If all of your income is going into your business account, pay yourself a wage into your personal account.
  • Set up a direct debit to pay into your personal account once you’re at the point that you know your business is at a certain point where you are confident that the money will always be there.
  • If you’re not ready for a direct debit, add a reminder to your calendar to work out your wage for that week/fortnight/month.
  • “The bit that is left over in my bank account, after wages and expenses, that’s profit.”
  • Think about what investments you should be making for you and your business.
  • If you haven’t got a business plan, it’s time to put something together.
  • “I don’t spend a lot of money on my business as I’m very frugal.”
  • Spend money on educating yourself for your business.
  • You might not be at the point where you’re making profit, don’t beat yourself up..
  • Think about profit so you’re ready to know what to do with it when you start making it
  • Unless you pay yourself, you won’t be able to do this forever.

What stage are you at in your business? Feel free to leave me your thoughts below!

 

Download/Listen to this Episode

(You can also subscribe to the podcast and listen to this episode on iTunes + Stitcher – just search ‘Create & Thrive’.)

Why My Jewellery Biz Revenue Doubled from 2013 to 2014

 

 

 

 

We all struggle with choosing – and sticking to – a direction for our business.

In the beginning, you probably didn’t even have a direction in mind. You just had something you loved to make, and you wanted to start selling it.

Things like finding your ideal customer, marketing, goal-setting, long-term planning, and conscious product development were likely not even on your radar. You might not have even planned on having a ‘business’.

But now you’re here. You’ve realised that you not only love making things – you love being able to share them with the world, and make money doing so. You’ve crafted yourself a business.

But are you clear on where you want to drive your business to?

Or is it driving you?

Camila Prada – one of the successful makers I profile in the SHIFT Gold Member Case Studies, has this to say about finding direction.

 

[Struggling with direction is] a constant for me. I think it is for most entrepreneurs, simply because of the fact you have to switch back and forth from CEO mode to worker bee mode. As the creator of a business you are always second guessing yourself, questioning, thinking of how to make things better.This makes it hard to execute plans in a focused manner, and of course YOU have to execute these ideas and plans yourself at the beginning, as there is no one else to do it.

 

Another of our Case Studies, Tracey Matthews (you might know her from Flourish & Thrive Academy) actually grew her first jewellery business to a huge level of success over 10 years… then let all of that go to re-start with a completely different business model for her jewellery.

 

She says: “Struggling to find direction is just part of life. The difference between those who succeed and those who stay stuck in the struggle is the direct correlation between your ability to make a choice and to take action.”

 

I totally agree with Tracey. I wrote about this on the blog recently – the terrible habit of not taking action because we’re waiting for something… whether that something is more time to think through a decision (hint, there will never be a point where you are 100% confident… about anything) waiting for perfection, waiting for the ‘right time’… or any of the other myriad excuses we make to ourselves about why we haven’t taken action.

The 4 makers I profile in the SHIFT Gold Case Studies all have this one thing in common. They have made decisions (sometimes, really tough decisions) and then enacted them.

Another thing they have in common is a clear direction.

They know who their customer is – and who their customer is not. They are not trying to be everything to everyone. They know what they want, and every decision they make drives them closer to their chosen destination.

Do you have this clarity?

Or are you still floundering, lurching from task to task, always feeling like you’re behind the game?

If you’re driving your business aimlessly, it’s time to make a shift.

I created SHIFT – my e-course for makers and creatives – to help you do exactly that.

Why did I create this course?

Because I’ve been in your shoes. It took me years to get clear on what I wanted my jewellery business – Epheriell – to be, and the direction I wanted to drive it. From when I started it as a hobby in 2008, it took me 5 years before I finally got really clear and focussed as to what direction to take my biz.

5 years.

Sure, I had attained some level of success – I was making regular sales, and making money. But things were growing slowly, and it wasn’t until I consciously chose a specific, defined direction that things really took off.

Once I got that clarity, and committed myself to one micro-niche, my business exploded. In fact, my jewellery business revenue in 2014 was double my revenue in 2013.

And that was after culling over half my product line!

Attaining this clarity and direction makes everything so much easier. Your marketing, product development, time management, heck, even the amount of supplies you need to keep on hand.

It makes things simpler, more straightforward, and you clear so much mental space because you’re not wasting time constantly asking ‘this or that’?

You know your Core Values, you know what part you want your biz to play in your life, and you know your WHY.

If you need help finding this clarity and direction for your business, join me and a passionate group of fellow creatives for SHIFT.

To register for the March class, click here.

The course kicks off March 9th and runs for 30 days. Registration closes Sunday morning, AEST.

As with all of my courses, you get lifetime access to both the content and the private course forum.

 

I hope you’ll join us and #SHIFTyourbiz in 2015!

Jess xx

 

P.S. Don’t just take my word for it. SHIFT Alumni, Carolyn Kospender, says of the course: “I feel like I’ve read so many books and essays on information that never really hit the point. But your course not only gave me concrete steps and plans to get me going but more importantly, opened my eyes to the true purpose behind what I do.”

P.P.S. If you have any questions about the course after reading the course page and FAQs, just leave a comment below or email me and I’ll get back to you asap.

10 Tips to Help Established Handmade Sellers Save Time and Improve Business

 

 

 

 

 

I know I talk a lot about how to get your nascent handmade business off the ground. That’s a vital part of the business journey – and it might even be the hardest part – but it really is just the beginning of the learning you are going to have to do.

When you’ve been running your business for a while, and achieved some success, you come up against a whole new set of challenges – things that may have never crossed your mind in the beginning, but that are now becoming pressing concerns.

How do you keep up when you’re getting more orders than you can handle? How do you make time for creating new designs when you’re flat out keeping up with making and admin? How can you streamline and simplify in every area of your business so you have time to do everything?

It can be easy to fall into bad habits when orders are few and far between, and you’re spending most of your time making new designs, adding new stock to your website, and getting the word out about your business.

If you find yourself stretched for time and stressed out because your business is growing, I’ve got 10 tips for you today that will help you to claw back a whole lot of control via simplification, systematisation, and more effective time management.

 

1. Streamline your order processing system

When you’ve only got a few orders a week to handle, it’s easy to be a bit lax about your order processing system. When you’re getting multiple orders a day, having a set, determined system – from the moment the order hits your inbox, till the moment you click the ‘shipped’ button – is absolutely vital. Not only to save you time and stress, but to make sure you don’t make mistakes, mix up orders, or miss orders.

I talk more about my own personal system for Epheriell in this post.

 

2. Reduce + simplify your inventory

If you’ve been in business for a few years, your product line might be getting a little bit bloated. Are you still hanging on to products you designed years ago, but that no longer fit the aesthetic of your brand – or that don’t reflect the direction you want to take your business? Do you have old designs sitting there that never sold well, but that you’re holding onto for sentimental purposes?

Even if you love them, sometimes it’s best to let go. Take a step back from the products you’re currently offering and ask yourself ‘is this still what I want to be putting out into the world?’

By streamlining your offerings to ensure you’re only putting your best work forward, you’ll not only tighten your brand, make life easier for your customer (because there is less dross to sort through when they visit your shop) – you’ll also make your own life easier, because you will have much less inventory to maintain (both physically and digitally).

Having a robust product range is a good thing – but you can have too many items. The key is ensuring that everything you offer is top-notch, and reflects your business as it is now – not as it was 2 years ago.

 

3. Get strategic with your social media

Chances are, if you’ve been in business for a few years, you’ve got a number of social media accounts floating around. But are you using all of them? Or, more to the point, are you using all of them strategically?

The more successful your business becomes, the less time you have to devote to maintaining social media. The solution is to get focussed and strategic.

Plan it out. Decide which social media you are going to focus on (I recommend no more than 2) and do a plan for what content you are going to share on a weekly basis. Maybe you want to have a rotating list of content types. Maybe you want to devote one hour a week to scheduling up posts or creating photos/images. Perhaps you need to put an alarm on your phone to remind you to spend 10 minutes a day morning and night pinning content.

Your plan will differ depending on your business and your goals. But if you don’t have a plan, you will soon (if you haven’t already) find that your social media marketing falls by the wayside in the face of more urgent tasks.

 

4. Hire help

Are you still a one-person show? Is that still working for you? Or is it time to take the next step and hire help?

If you’re like me, this sounds like a super-daunting step, because you like being in control of every single aspect of your business! However, if your business is growing, there comes a time where you either have to deliberately slow things down (more on that later) OR you need to bring some help on board.

Start with discrete tasks – things that you can hand off, in full, to someone else. An example of a discrete task would be your bookeeping. Or your shipping.

Also, don’t forget all the other parts of life you might be able to outsource – how about hiring a cleaner so you don’t have to do that any more?

Look at your business – and the rest of your life – and aim to find these discrete bundles of work that you can hire someone to do for you. Chances are, you can hire them at a reasonable rate that will free you up to spend more time on the activities that actually grow your business and bring in more money. It’s a win-win upward spiral.

 

5. Schedule breaks

It’s oh-so-easy to let a growing business spread its tendrils into every waking hour of your life, until you find yourself checking your email when you wake up in the middle of the night, and start breaking out into a cold sweat when you accidentally leave your phone at home.

This hyper-awareness keeps your body in a constant state of stress, and that is just no good for your mental (or physical) health.

Learning how to set boundaries and take breaks is a crucial skill to master if you want to continue to run your business into the future without burning out.

Work out what sort of rhythm works for you, and make taking down-time a priority. Maybe you want to set daily work hours, or discrete work days. Perhaps you know you need to switch off a few times a year and take a digital sabbatical. Perhaps you like to go all-out for most of the year, then take a whole month off.

Whatever works for you – do it, stick to it, and remember there is a life outside of work, too.

 

6. Raise your prices

When’s the last time you reviewed your prices? If you’ve been in business for a few years, but haven’t reviewed or raised your prices in the last 1-2 years, this should be a top priority. Not only are you now much more experienced than you were then, but you’ve probably also got a more established brand and a strong reputation. It might be that your current prices don’t reflect that.

Raising prices can also be an incredibly useful tool if business is booming beyond the point where you can keep up. Imagine doubling your prices… and getting half as many sales. If you’re still measuring your success by ‘number of sales’ this idea might horrify you. But if you’re measuring your success by how much profit you are making, this idea should delight you. Imagine – the same amount of gross income you make now, but with half the work! Not to mention, more profit, because your margins are much higher.

If the idea of doubling your prices sounds way beyond what you’re comfortable with, how about just adding 10 or 20%? You may find that the extra cost reduces the number of sales you make, and gives you a bit more breathing space.

Then again, you might discover (as many makers have) that raising prices actually makes your items MORE desirable to customers, and you actually increase sales. At least you’ll be able to afford to hire some help!

 

7. Establish a morning routine

How you start your day can have a huge impact on how productive and happy you are. We’ve all had those days when we’ve crawled out of bed late, and then felt like we were falling behind all day. When we start the day rushed and stressed, chances are that’s how the rest of the day will go, too.

How much better would it feel to have a routine that ensured everything that needed to get done before you started work did get done – in a relaxed, uplifting way?

Establishing my own morning routine has been (and is) a constant work in progress, and I still have those days where – because I have an early appointment, or some other spanner in the works that is outside my regular routine, I can’t stick to my full morning routine (which, when done properly, takes me 3 hours!). But when I do stick to it? Man, does it pay off. I start my workday calm, happy, knowing I’ve already taken care of myself (I’ve done exercise, yoga, meditation, some reading, and I’m showered and dressed).

Figure out what activities you really love to do in the morning – those things that get you in the right head-space to tackle the rest of the day. Then, work out what order you want to do them in, and when.

Yes, it might mean you have to get up a little bit earlier. I have NEVER thought of myself as a morning person, but I’ve chosen to change that, and now wake up by 7 at the latest every day (even though I’m self-employed, work from home, and don’t have kids to wake me). It’s made a world of difference to how I feel every day, and it means I reduce my cognitive load in the morning, because I don’t have to think about what I’m going to do – I just follow my routine.

(I’m so passionate about this, that I’m going to talk about it at length in an upcoming podcast…)

 

8. Dump venues that aren’t working

When you started out, you might have done what I did – put your work into any and all venues you possibly can! As many online selling sites as you could, as many shops via wholesale and consignment, as many markets as would accept you.

But now… you’ve reached some level of success, and it’s time to be more discerning.

I get emails – usually a few a month – from people starting up new online handmade venues. I’m honoured they’ve reached out to me – it is a sign that I have built a reputation for quality work – but I am also firm in the fact that I cannot invest the time to set up on yet another online venue. In fact, a year or so back, I actually shut down the majority of my shops on different venues, so I could focus on the ones that were bringing me the most success.

Managing 2-3 online venues is hard enough when you have hundreds of products – let alone managing 10 or more. Do you still have work on venues where it never sells? There is something to be said for having a presence wherever you can, in order to possibly spread the word about your business, but you have to weigh that up against managing all of those venues – keeping them up to date with new products, updating prices, updating them when you go on holiday or take a break… all of that adds up to time you might well find is better spent elsewhere.

And when it comes to retail stores – start being more choosy. Pick the ones that really work with your brand (I know my friend Megan Auman focuses on getting her work into gallery stores, because that’s where her ideal customer is).

Don’t automatically jump at the chance to get your work onto that new site, or into that new shop or market. Have a plan for how you want to grow your brand, and choose sales venues accordingly.

 

9. Plan your time better

Flying by the seat of your pants when it comes to time management and planning might get you so far, but once business picks up, you’ll find yourself missing appointments, forgetting things, being late with orders, letting your inbox pile up, and generally feeling like you’re never on top of things.

If you don’t already have a coherent, interlinked time management system, it’s time to change that.

Everybody works differently, so no-one can give you a one-size-fits-all solution to this, however, there are oodles of options out there for how to keep track of everything you need to do, and structuring your time.

Personally, I use a combo of a yearly wall planner, a weekly desktop planner, and google calendar (including those handy alarm reminders!).

That system works for me, because it lets me look at my time in a range of increments – from the year ahead, to the week ahead, to daily tasks. I sit down on Sunday night and Monday morning and schedule must-do tasks for the week on my weekly planner, so I know what’s coming up for the week ahead, and can make sure to allot the time for those projects.

 

10. Do some long-term goal-setting

When’s the last time you sat down and looked at your 6-month, 1-year, 3-year, and 5-year goals? Have you revisited them within the last 6 months? If not, now’s the time.

Long-term goal-setting is crucial to give you something to aim for – but it needs to be modified on a regular basis as your business grows and shifts. The 5-year goal you set 2 years ago might be wildly out of sync with what you want now.

Without long-term goals, you’re sailing around in the dark. Sure, you’re moving… but are you moving in the right direction? How will you make big decisions for the direction of your biz if you don’t have some sort of vision for what you want it to look like a few years down the track?

These goals are never set in stone, and you can change them – but by doing the work and setting them, you’re in a much better position to be able to say ‘yes’ or ‘no’ to the opportunities that will come your way. The Captain of the ship always knows where they’re going – so make sure you’re acting as a Captain should when it comes to steering your business.

 


This is just a taste of the sort of content I cover in SHIFT – my e-course for more established handmade business owners.
SHIFT Alumni, Carolyn Kospender, said of the course: “I feel like I’ve read so many books and essays covering information that never really hit the point. But your course not only gave me concrete steps and plans to get me going but more importantly, opened my eyes to the true purpose behind what I do.”
If your business is already cruising along, but you want to shift things up a gear (or two or three!) and hit highway speed, join me for a month-long virtual road-trip that will help you #SHIFTyourbiz. Registration is open now. Class starts March 9th.
Click here to find out all the details.

 

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