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.
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.
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.
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!
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.
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.
When you’re starting out selling your craft online, every single sale gives you a thrill.
Actually – every single sale still gives me a thrill, and I’ve been at this for over 6 years now! Celebrating each and every sale (even if that celebration is limited to a little internal shout of ‘woohoo’) is an awesome thing. You should never lose that thrill – it’s part of the joy of business.
That said… there is a really unhelpful metric out there when it comes to measuring the ‘success’ of one shop or business over another.
That metric is the number of sales a shop has made.
It’s an easy trap to fall into – especially when you start comparing the progress of your business to other people’s businesses. Most online selling venues (Etsy, Madeit, etc.) have the number of sales listed for public view. That is a great thing… for potential customers. It is a figure that gives the customer a quick measure of how long that shop has been in business, and how many other customers they have dealt with.
What it is NOT a good measure of is the financial success of that shop.
Now, I’m the first to argue that success isn’t just about the money side of things – but it is obviously a vital part of being in business. If you’re running a business, you’re doing it to make money, and that’s something you need to keep in mind every day.
But, when you start comparing how well you are doing with others based upon the number of sales you’ve made versus the number of sales they’ve made, you need to take a deep breath, step back, and start being more analytical about it.
If we get down to the bottom line, then the success or otherwise of a business comes down to… the bottom line.
That is: the revenue and profit that the business is making.
And there is no real way you can tell how much profit a business is making based upon their number of sales.
As I write this post, I have made a total of 1,895 sales since I opened in October 2008.
That’s great – it tells my potential customers that I’ve been around for quite a long time (in the world of online sales, anyway) and that I’ve dealt with almost two-thousand customers through my Etsy shop in that time.
Now – let’s take a moment to clarify that my Etsy shop is only part of my business. I have my own website, and I’ve also had shops on many other online venues over the years, not to mention wholesale and market sales over those years. That’s the first part of realising that my Etsy numbers are only part of my business story. So – realise that when you look at one venue that a business sells on, chances are high that they are making sales in other places too.
Putting that aside, let’s go back to my ‘number of sales’.
Last year (2013) I made a total of 328 sales in my Etsy shop.
This year, as of writing (on the 18th of November, 2014) I have made a total of 380 sales in my Etsy shop. I’m guessing that will top out at over 400 by the end of the year.
Now – if you just look at those numbers, you might think ‘oh, she’s made some good progress growing her business, but it’s not a massive amount’.
However, what you don’t see by looking at those numbers is the difference in the revenue.
I may have only made an extra 52 sales, but I’ve made an almost 50% increase in revenue in my Etsy shop in 2014 compared to 2013.
Why? Because not only are my prices higher (I put the prices on my wedding rings up in November 2013, the reasons for which you can read about here) BUT I’ve also sold many more wedding rings than other pieces of jewellery – and they have a much higher price-point.
By that measure, 2014 has been vastly more financially successful than 2013 – even though the difference in the number of sales isn’t drastically different.
Let’s do a quick hypothetical comparison to clarify my point.
Say you compare my store with another store that sells scrabble tile pendants.
After a quick browse of the first few pages of results on Etsy, I’m going to say a mid-range price for a scrabble tile pendant necklace is around $7 (which is just ridiculously low, but that’s a rant for another day).
If a shop selling scrabble tile pendants at $7 per sale had made in the ballpark of the revenue I’ve made in my Etsy shop this year, they would have to make quite a bit over 5,000 sales in 2014.
Me – 380 sales.
Them – way over 5,000 sales.
To make a similar amount of revenue.
This is why you need to stop using ‘number of sales’ as a measure of the success of a shop.
Just for a minute, think about how much more work those 5,000 scrabble tile orders would be in the admin and packing side of things.
Communicating with 5,000 customers versus 380. Packing 5,000 orders versus 380. Sure – the product might be quick and easy to make compared to mine, but product crafting is only part of the work you do for each and every order.
Quite a difference, eh?
So, the next time you look at a shop and lament on ‘how many more sales they’ve made than me’, make sure to take a moment to consider what I’ve talked about today.
If you must compare, ask yourself:
What’s their average price per sale?
That will give you a much better idea of their bottom line – and therefore, how much money they are actually making… which is a much more accurate measure of ‘success’ than number of items sold.
AND – it is a question to ask yourself over and over again to ensure you’re not under-selling yourself.
Imagine – if you doubled your prices and halved your ‘number of sales’ – you’re still making the same amount of money… with half the work.
It’s almost November… so welcome to the busiest season for all retail businesses – both big and small!
It’s such an exciting time, and today I’d like to share some ways to encourage more sales and gifting.
1. Always keep the gift recipient in mind.
As we head into the gift-giving holidays, it’s important to remember that your customers aren’t always buying for themselves at this time of year. They’re buying for friends, family, party hostesses, etc., and they’re looking for unique gifts. Encouraging customers to gift your product is a great strategy during the holidays because when your customer gives your items to friends and family, the gift introduces you to a new customer. It’s the best possible form of recommendation!
As you plan for the holiday shopping season, try and imagine who your customers might be buying for:
Husbands, boyfriends or partners
Coworkers and managers
White elephant gift exchanges/Kris Kringles
What items in your inventory can be presented as gifts for any or all of the above recipients?
2. Cross-promote with other artists.
One of my favorite Etsy sellers sent an email last year that I thought was simply brilliant.
She contacted her customer list with a list of handmade gifts from various sellers that she was giving to her friends and family. Just imagine if you collected a handful of your favorite sellers and introduced your favorite shops and they agreed to return the favor? How many new customers might you share and gain?
3. Offer free shipping.
Free shipping has tested as one of the very best sales you can offer your customers. People simply don’t like the added amount at check-out; it’s not a fun surprise!
I always offer free domestic shipping in December, and my products already come gift-wrapped. If you want to ship 5 bracelets to 5 of your friends, I’m happy to eat the shipping costs!
Calculate what this would really cost your business, and see if you can swing it. Because of the price and light weight of my products, free shipping only equals a 10% discount off every order … completely doable! How much would free shipping cost you?
Here’s to a happy, healthy and fruitful holiday season for us all!