1. Underpricing Work
Too many crafters price their work
too low. Remember, you should not only make sure your pricing includes your
materials, but also needs to compensate you for your marketing (show fees,
traveling expenses, etc.) and your labor.
2. Not Having a Plan
No, you do not need to hire a
high-priced business planning firm to make a business plan, but you do need to
have a well-thought yearly plan for your business. What shows will you attend
and when? How much should you spend on supplies every month? Thinking these
things through and writing all this down will help you stay on track and keep
you from taking on too many obligations for the year.
Lots of beginners will go out and
borrow thousands of dollars to start their crafting career. Buying the best
equipment might seem like a good investment at first, but when lean times come
those payments can break the financial back of small business owners in a
hurry. Likewise, you should not start out with all the top-rated shows. Local
craft shows are a great way to get your feet wet in the business without
investing thousands in show fees.
4. Attending the Wrong Shows
This is a problem that many people
selling fine crafts and artwork discover when they attend their first street
festival. If people are paying $5.00 for hot dogs, you would think they would
not complain about the price of your high-end crafts. Wrong! Fine crafts and
artwork belong at shows where customers appreciate the work involved. Not
at the "Texas Chili Jamboree!"
5. Not Budgeting
Nobody likes to make a budget;
therefore many people simply do not. A budget is not some elaborate financial
statement that takes days to write. It's just a way for you to tell your money
what to do instead of your money telling you what to do! Plan your next month's
budget for your business at the end of each month. Start with minimum expenses
at the top (things you must have to function like show fees that are due, and
the utility bills on your workshop) and work your way down the list to things you
would like to do, should you make enough money (like having those brand new
custom fliers printed).
6. Not Planning for Lean Times
When planning your budget make sure
you allow for savings. That fantastic show in DC may not pay out like it did in
years past. If you have funds available for emergencies, you will be able to
weather the months when you do not make enough to meet expenses. A good
rule-of-thumbs is to have 3-6 months of operating expenses in savings. Yes, for
some businesses this may be a substantial amount. But trust me, if you break
your arm and cannot produce products for a while, this type of savings will
literally save your business.
7. Taking Negative Comments
Personally
I've seen too many first-time
exhibitors almost in tears because of a rude comment from someone browsing
their booth. "I can get a gift like that at Wal-Mart for half the
price!" or "I'll just make it myself." are two comments you can
count on hearing at almost every event. Unfortunately there are obnoxious
people in the world and a lot of them seem to find craft shows the place to
practice their skills of offending people. Don't listen to them! If they had
the creativity, the skill and the dedication, they would be at home making
their own crafts instead of bothering you! While you should always listen to
constructive criticism like: "You should consider making this in
blue.", there is no need in beating yourself up because of comments from
someone who has nothing else to do than harass crafters who are confined to their
booths.
8. Following Trends
Just because that booth next to you
in New Jersey was selling floppy-eared bunnies right and left does not mean you
should start making truckloads of bunnies for your next show. Trends come and
go. So do craft business owners who follow them. Yes, you should definitely
create lines that may be trendy. If snowmen are "in" this holiday
season, you may want to create some to compliment your other items. But you
should never simply change your product lines altogether to follow the crowd.
9. No Tax Planning
One of the number one reasons for
small business failure is poor tax planning. In order to stay in business, you
must pay your taxes! Once your profit margin is higher, that takes planning. I
recommend an accountant, but you can use QuickBooks or other tax software to do
your own taxes. The main thing to remember is that when you make money, there
will likely be taxes due. Make sure you have the funds available BEFORE April
15th. It's also a good idea to keep a separate checking account for your
business. Keep any tax savings in this account for easy transfer from you to
Uncle Sam.
10. Spending too much
Do you actually need that brand-new
trailer to haul your display and inventory from show-to-show? Or will that old
van you've been using work just as well? How about a used trailer? Used
equipment does the same job and can be half the cost. That also goes for your
canopy, cash register, computer and anything else you need to run your
business. Remember, you are in business to make money, not spend it!
Sumber : About.com
