How to Start a Crafts Business

Your friends and family have probably received your crafted products as gifts or they've seen your talents and have said "You could sell this stuff!" As you already know, it isn't easy. But you've just taken the first and most important step - you asked for help.

Craft baskets


1. Get the proper permits.

You are going to need a business license. Visit your city's web site or go to your city office and obtain the criteria package and application for a business license. A basic business license is generally very inexpensive. Each year, at the anniversary of your business license renewal time, your city may require a report from you that will determine the renewal fee.

Depending on the types of products you make, your city may require a fire permit. This may lead to an inspection of your home and the area of your home in which you work.

Resale license or Use permit. If you live in a state that collects sales tax, and you intend to sell your products to the general public, you will need a Seller's Permit or Resale License. Visit your state's web site or call your State Board of Equalization for an application. There is usually no fee for a resale license; however, (depending on your state's guidelines) you will be required to submit quarterly and annual reports that will determine the payment you will make to the state.

2. Set up your purchasing. Establish a business relationship with manufacturers and/or wholesale dealers and distributors of the raw materials you use (fabrics, yarns, paints, floral products, canvas, hand tools or power tools, baskets, new or used widgets, etc.). Buying direct from manufacturers and wholesale dealers requires a business license and a sales permit.

(Where do you find these businesses? Google will become your best business partner. Simply type in what you're looking for: such as – Wholesale Crafting materials, or Silk Flower distributors, or Textile Manufacturers, etc. There are thousands of them out there.)

3. Start proper bookkeeping.

Are you going to do this yourself? If so, good for you! If you are familiar with keeping books (even at a minimal level) invest in basic bookkeeping software that you can rely upon to provide the information you want and need. Select a product that will monitor not only your sales and the bank balance, but your costs and inventory status, too. (Consult with your tax preparer for a product that is best suited for your needs.)

If you're not so good at bookkeeping or you just don't want to do this, the best investment you can make for your business is a good bookkeeper. Set up an "Informational Interview" with your personal tax preparer or CPA for guidance on finding a good bookkeeper (he/she might offer this service himself/herself).

Take a basic bookkeeping class. Even if you opt to have your CPA or tax preparer handle the books for you, you will want and need to have some understanding of your financial position. Check with your local community college or adult education center for a class schedule. (And, yes, there is a book distributed by Wiley Publishing "Bookkeeping for Dummies" by Lita Epstein. Look for it online or at an office supply store.)

4. Don't quit your day job. If you are already in the work force, stay there. Until you have solid income that you can depend on from your crafting, don't bite the hand that feeds you. If you are fortunate to have a financial reserve or a source of funds that will sustain your living expenses and allow you to lay out money for materials and craft-related expenses until you have an inventory base, congratulations! You are among a very small group.

5. Give yourself some room. Do you have work space in your home or garage where you can work uninterrupted and your crafting work will not take over your entire home? Segregate your work area from your living space. If you are truly going to make crafting your "business," maintain your personal life, then "go to work" as you would if you were going outside your home. Take lunch. Take breaks.

6. Build your inventory. Whether you plan to sell your crafted creations out of your home, online, at craft fairs, community farmer's markets or at a yard sale, you need enough inventory stock to attract customers. Do you plan to consign your items? Meet with a retailer that accepts consignment items. Present samples of your craft item(s). The retailer might accept one piece or a dozen. Be prepared to fill the order.

7. Network, network, network. Join an existing crafter's group or club, or start your own. There are literally thousands and thousands of people just like us who would love to exchange ideas, share a customer base, band together in your own community to have a craft fair of your own. Does your local craft retailer have a bulletin board? Look for crafting groups you might join, or post your own note inviting crafters to form a club with your similar interests. Attend a few Chamber of Commerce breakfasts or luncheons or mixers. Watch for artists' and crafters' forums in your city. Become visible.


Determine if you have storage space for your inventory, materials and completed items. If not, consider renting extra space.

Things You'll Need

A must read by Barbara Brabec:

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