I've beens selling my hand-etched ornaments and other small crafts locally and from my Etsy shop for a little while now, and I've learned quite a bit during this time. In the beginning I was totally "winging it" and looking back now there are a few things that I really wished I had started right from the get-go. | This post contains affiliate links |
5 Things I Should Have Done from the Start with my Handmade Business
Keep All Receipts
In the beginning this all started out more as a hobby than anything else, and so I never kept my receipts from supplies bought, postage, etc. I really didn't know how much I was spending vs. how much I was making or if it was really profitable. If you're doing your handmade business on a very small scale strictly as a hobby all this might not matter as much, but once you start getting a decent amount of sales you need to keep track of how much you're spending for these things - this is especially important for taxes (whomp, whomp) since you can write off most of your expenses, but only if you have the receipts.
Supply & Materials Records
Knowing how much everything costs for your business (craft supplies, packaging materials, etc) as well as how much you use is important for planning ahead and having enough materials on-hand. In the beginning you can expect a learning curve where you'll run out of padded envelopes or ribbon from time-to-time. But figuring out your demand and flow of goods and materials can help make sure you always have enough supplies on-hand without having too much surplus (also not good).
Separate Bank Account
Keeping a separate bank account really helps keep track of expenses as well as makes sure you're only spending what you're making and not more. Open a new checking/debit account (and possibly a credit card) and use those methods of payment for all business related expenses - buying supplies at the store, shipping items, etc. When payments are deposited from Etsy or checks they should go into this checking account. By only using the money you're making to spend on expenses you won't go into debt. Also make sure to set some money aside to pay yearly or quarterly taxes if applicable (your accountant can help you figure that out).
Better Overall Financial Record Keeping
Keeping track of expenses vs. income can be hard and it's easy to forget infrequent or small expenses that can really add up (yearly website hosting, Etsy listing fees, advertising, items sent to bloggers for collabs, etc). You'll definitely want to create or purchase a spreadsheet template to keep close tabs on all of these expenses.
Rather than try to make one myself, several months ago I purchased the Etsy Seller Spreadsheet from Paper + Spark and was really impressed! Janet from Paper + Spark is a Certified Public Accountant, so she really knows her stuff. The spreadsheet template can input all the data (sales, Etsy selling fees, listing fees, etc) right from Etsy and populates them into the spreadsheet for you so you don't miss anything. There are also sections you can customize so you can put in expenses from website hosting, office supplies, etc or income from local craft shows or wholesale accounts. It can be hard to realize how much Etsy's cut is (they charge a listing fee, a transaction fee, and a percentage of the sale), so seeing just how much their take actually is has helped me adjust my pricing better. Recording all these details was so important to finally see what my bottom line actually is - I really wish I had kept better track of everything right from the beginning!
I had purchased Paper + Spark's original spreadsheet, but Janet's since come out with a newer, more detailed spreadsheet too so you can decide which one is best for you and your business.
If you'd like to purchase one of Paper + Spark's spreadsheets or other business tools (don't forget, you should be able to write it off as a business expense!), you can use the Coupon Code "BIRCH10" to receive 10% off her entire store.
Social Media + Collaborations
Never underestimate the power of social media! Social Media is the place to see and be seen - make sure you're always posting, commenting, and connecting with other handmade buisnesses, gift shops, bigger brands, and bloggers. Always use hashtags on Instagram, but hide them in your first comment so they don't clutter up your caption. In particular, Instagram is a great place to get exposure - in fact my photos have been reposted by brands like Nuby, Kohl's, and Yankee Magazine and one was even featured in print in Martha Stewart Living Magazine!
Another great way to gain exposure and a following is to reach out to bloggers for collaborations (collabs). Usually this entails you sending your product to them, free of charge, and they will style and feature your item on their blog and across their social media accounts. You could also team up with them to host a giveaway. Some larger bloggers may also charge you a fee to collab with them, but many bloggers will feature for free if your product fits their aesthetic. This is a great way to get your name and your products out there and increase your following. And don't write-off the power of smaller bloggers either - sometimes the smaller bloggers have the most active and devoted followings.
Looking for FREE Etsy listings to get started?
If you're thinking of opening a brand new Etsy shop, please feel free to use my referral link HERE - and we'll both earn some free listings on Etsy :)
- I purchased Paper + Spark's products myself and was so impressed that I chose to become an affiliate. All my opinions are my own and I honestly love and trust her product. As an affiliate, if you purchase anything from her site using my links I may receive a small commission at no additional cost to you -