How to Start a Craft Business in 2024
As of 2024, the global craft market is valued at $40 billion. The craft business is expected to grow around 10% in upcoming years. On average a craft business makes around $150 K per annum.
Craft business is best for persons with creative minds. You have to consider a large number of factors for launching a successful craft business. In this article, we will discuss about most important steps for establishing your own handcraft business. These steps will cover planning, crafting items, material, and equipment, process, packaging, selling, and promotion. In the end, we will provide a detailed cost-to-profit analysis.
How Much Does It Cost to Start a Craft Business
The cost of Starting a craft business will depend upon your selection of alternatives. For example, If you want to start your craft business from home you can save on rent( applicable when owning a workshop). Some common costs that will be incurred are the cost of material and equipment, Packaging, and marketing. These costs will amount to almost $8000 for the initial stage of your business.
Other costs include the cost of labor, selling, and shipping and these are ongoing basis. They are proponate to your sales and you have to bear them with each sale of your craft.
1. Research Local Craft Market and Write a Business Plant
Researching the local market will help you to image an ideal business that will match your expectations with reality. You have to research your competitor’s pricing, quality standards, customer insights, and cost-to-profit ratio.
Your business plan should include crafting items, marketing strategy, quality of material and equipment, and selling options. A good crafting business plan will be crafted on realistic assumptions rather than mere expectations.
2. Select Your Crafting Items Smartly
Craftin is a gigantic industry and has thousands of types of crafting products. Every craft requires different kinds of methods. You have to pick your crafting items very smartly as per your capabilities and trends in the market that you want to target.
There are a variety of crafting niches available most common of them are Textile Crafts, Sewing and Textile Crafts, Jewelry Making, Paper Crafts, Woodworking Crafts, Pottery and Ceramics, Painting and Dyeing Crafts, Sculpting Crafts, and making. Among all of these textiles, sewing, and jewelry comprise cover more than 50% of the market share.
3. Material and Equipment
Crafting requires many kinds of specialized crafting materials and equipment. Although they do not make a hole in your pocket, they are necessary for your business.
Materials
Material required for manufacturing of crafts will depend upon the type of crafts you want to produce in your inventory. For example, Yarn, thread, embroidery floss, Fabric, felt, or leather for sewing is required for textile crafts. Candle wax, wicks, and fragrance oils are most common for candle making.
Equipment
The Specialized equipment used by artisans is a Sewing machine and serger (for sewing craft), Cutting machine ( for precision), cutting heat press or iron (for heat transfer), craft skill for firing pottery and ceramics, Woodworking tools, Jewelry-making tools, Pottery wheel and tools (for wheel throwing), Screen printing equipment,craftsLooms (for weaving crafts), Dying equipment.
Besides this, you will also need some common equipment like Scissors, a cutting mat, tape, tweezers, pins, etc.
4. Production Process
You have to translate your ideas into production methods. For this, you have to design plan, and categorize your craft items as per the demands prevailing in the market. Unique products with high standards will attract buyers easily.
Manufacturing of crafts includes various techniques of cutting, carving, sewing, assembling, painting, or other artisanal processes. Detailing and Quality controls are necessary for maintaining the high standards of your crafts. Once the manufacturing of the craft is completed artisans are required to provide the finishing touches to enhance the appearance of the the craft.
5. Packaging
Good packaging is a must for craft products because most of the craft products are fragile and subject to damage from harsh handling. You will have to use bubble wrap, Packing peanuts, or air pillows besides using regular packaging items like boxes, packaging tape, packaging paper, etc.
A high standard of packaging will help provide cushioning and protection against impact and damage during the shipping of crafts. Premium packaging also creates a positive impact on buyers’ minds and helps to enhance the brand image.
6. Use Online Marketplace
Now the dynamics of the craft business have changed very much. Unlike the 90s when you used to watch physical craft shops, now the craft business moved online. Around 80% of the handicraft sales made in 2023 were produced via online mode.
Low Cost Option
Craft businesses that are low on budget, can sell their crafts only on Instagram because it has the lowest recurring costs. Instagram is also home to many craft lovers and creative people. So it will be easy to find the ideal customers for your business.
More Profitable Method
If you are not very much concerned about the recurring costs then You can list your crafts on eCommerce stores like Amazon and Walmart(Although you have to pay a commission ranging from 3-15% as per the price of your craft). You can build your own website with the help of a website builder if you want to avoid the hefty commission from the eCommerce stores. (Most common choices are Shopify, Weebly, Godaddy, WordPress, etc.)
7. Pick a Delivery Partner
A dependable delivery partner is also a key to smooth functioning and avoiding delivery-related issues. An ideal delivery partner will be a delivery company functioning for a long time, smooth in handling parcels, and also responsible for damages incurred during the delivery.
Cost-effectiveness and time boundness of delivery company also have an impact on your business. So you have to consider all the factors for picking your delivery partner.
8. Promotion of Crafts
It is the last but most important step for the growth and profitability of your craft business. At the initial stage of your startup, you have to invest in the promotion of your craft items. For this, you can take the help of marketing and advertising. If you are new to marketing then you can hire a freelancer that will get the things done for you.
Build Social Media Handles
You have to create social media handles on all the platforms. But Instagram, Pinterest, and Tiltok are most helpful for a craft business. You can also take the help of meta-paid promotion as it is the cheapest option available in the market. Creatively post your content and provide your followers a way to engage by posting a Question-based post. (Like vote for crafts).
Spend on Advertising
If you are not too much bothered about your pocket then you can spend a decent share for advertising your business. You have to pick advertising partners smartly for a high cost-to-return ratio. In the crafts business Instagram, Pinterest, and Google are the most productive platforms for promotion.
9. Cost to Benefit Analysis
You have to incur many small costs and some major investments for starting and maintaining your craft business. These costs will include all the costs of manufacturing, packaging, selling, and marketing.
Manufacturing costs will include, single time and regular costs. One-time costs are buying the equipment, creating your website, and other establishment costs.
Monthly recurring costs are directly promotional to the demand for your crafts in the market. As the demand for your crafts in the market will increase, the cost of materials will also increase. This will lead to a substantial increase in your profits.
| Research and Business Plan | Market Research, Compititor Analysis, Building a Business Plan | Market Research, Competitor Analysis, Building a Business Plan |
| Material and Equipment | Cost of Purchasing materials and equipment required for crafting. | $5000(Variable) |
| Manufacturing | Designing, planning, and manufacturing craft items. Includes labor and utility costs. | $20,000(Variable) |
| Packaging | Cost of packaging materials | $500 |
| Online Marketplace | Setting up a website or selling on platforms like Amazon or Etsy.(Amazon or Etsy are commission Based) | $1000/free(One time) |
| Total revenue in the first year | Cost of shipping and handling through a reliable delivery partner. | Around $10 per shipment |
| Promotion of Crafts | Marketing and advertising expenses including social media promotion, paid ads, etc. | $2,000 (Vary) |
| Total Initial Cost | Sum of all the initial expenses. | $7,500 |
| Projected Revenue | Total revenue in first year | $1,50,000 |
| Potential Profit | The projected profit after deducting expenses from the projected revenue. | $1,20,000 |
Final Words
In this article, we have discussed all the steps required to start a profitable craft business. But remember all the steps that are provided are based on common criteria and subject to change as per the volatility and demand of the market. If you want to start a craft business then you have to inculcate some flexible change that suits your cost and profit expectations.
