how to get paid from your craft business

We have the honor of working with almost 4,000 artists and crafters in the Make-Sell-Grow Facebook Group. Many of them use the patterns from Pixie Faire to sew-and-sell doll clothes. Recently a topic that got a lot of engagement came from Ruth Patterson who wrote this:

Screen Shot 2016-05-15 at 6.34.22 PM

It’s a great question and underscores the challenges of a craft business. So in this post I thought I’d reflect back on our journey a bit, explain our experience and lessons learned, and offer a couple suggestions for people struggling to make a craft business into a profitable business.

$1,000 A Month: We started Liberty Jane in February 2008 because we needed an extra $1,000 a month to pay our mortgage. For those of you who have read Craft Business Power or The Couples Guide To Income Power, you know all the details about that sad period of our life. Bottomline we were very focused on the income from the business from day one, so it shaped how we did things. Over the first eight years our annual sales (in round numbers) were as follows:

2008: $12,000

2009: $12,000

2010: $36,000

2011: $102,000

2012: $200,000

2013: $306,000

2014: $468,000

2015: $646,000

So we have a small business, successful by some people’s standard, but tiny by other people’s standards. Our results are obviously unique and only happened because of the specific business strategies we implemented. So I don’t want to imply that you can achieve these types of results, but I do want to explain a few of the lessons we’ve learned along the way.

Building A Business Means Solving Problems

Starting a business is like opening a 10,000 piece puzzle and looking at all the pieces. Some people look at it with enthusiasm, some people look at it with dread. Then you go to work. You never have all the answers, you never have all the problems solved, you never have everything working perfectly.

At $12,000 a year we had specific problems that needed to be solved, and as we get closer to a million dollar a year business we have specific problems to solve. The best entrepreneurs, from what we can tell, love solving problems and feel a sense of excitement for the challenge. They tackle one problem one year and then move on to the next problem over and over again. So the mental game is important from day #1 and only the determined survive.

Building A Business Means Finding A Successful Product Strategy

Everyone starts a business with a set of skills, ideas, or hopes that they think will result in success. How you turn those skills and ideas into reality (your execution of the idea) impacts the outcome tremendously. As Mike Tyson (not our hero, but this is a good quote) famously said,

 

“everyone has a plan until they get punched in the face.”

 

There are many products that you can make, or try to buy-and-resell, that simply aren’t going to sell. The customers just don’t like it. There are still more that you can actually sell that won’t result in you making any money after expenses. Your job is to continuously refine your product strategy until you find a formula that will work.

As a crafter, this is compounded by the fact that your craft product needs to be made affordably and (most likely) in large quantities. So if you’re the maker, you have to decide how to solve the problem of scaling up production.

A Fun Example: In 1970 David and Barbara Green started making small picture frames in their garage. A few years later they opened their first retail store, a 300 Square Foot space, they called it Hobby Lobby. David had been the department supervisor at a local craft store, so he knew the business. Today they have no debt, over 600 stores, employ 23,000 people, have over 3 billion dollars in annual sales, and (it is rumored) give away over 100 million dollars a year to charities from their considerable profits. They still have a team of people that makes various products they sell exclusively in their stores.

Hobby Lobby Store

Building A Business Means Marketing & Sales 

An incredible product will almost sell itself. But that is incredibly rare. Much more commonly a business owner is starting with a good product that has to be presented to customers effectively and sold creatively. Your business will not grow until you learn how to become (or work with) an effective marketer who can focus on Branding, Photography, Copywriting, and distribution methods.

As you know if you’ve followed our work, Cinnamon and I got lucky in a way because she was focused from the beginning on the product, (see that here), and I was focused from the beginning on sales and marketing. Our best advice is to either commit to doing both parts yourself or finding a partner. But if you neglect the marketing you will most likely fail to get good results. We have both tried to share what we know about our various activities. Cinnamon has done that by creating the Design Academy and Pattern Academy and The Idiot’s Guide To Sewing. I’ve done that by writing various books on the topics including Craft Business Power, Instagram Power, and teaching the Craft Business Academy and Craft Selling Academy.

I know it might sound like I’m trying to sell you something, so take it with a grain of salt if you’d like, but if you’re trying to sell doll clothes on Etsy made from Liberty Jane or Pixie Faire patterns, and you haven’t gone through the Pattern Academy, you really are missing out on our primary training program. It shows you how to tweak patterns to make custom outfits – thereby increasing your chances of selling things successfully.

If you simply try to sell a commodity (something sold by a lot of people) without a unique approach, you’ll most likely be competing on price against other people, and that is rarely going to work well. A simple search on Etsy shows over 2,000 items listed that include the phrase “Liberty Jane” and another 2,000 that use the phrase “Pixie Faire”. The vast majority of those items are simply direct copies of patterns we’ve published, which we approve of, support, and encourage, but that doesn’t mean competing on price in a commodity business is a good idea.

Or maybe you’ve gone through those courses and you are still struggling. Then I’d recommend you take a look at the marketing opportunities you have and begin implementing them. Probably our best kept secret is our Pixie Faire Advertising Program. Lots of people like it, learn more here.

A Fun Example: As a student Dale Chihuly studied Interior Design, but he also became exposed to glass melting and sculpting. He began studying the art form and traveling the world to learn and study. At the age of 30 he cofounded the Pilchuck Glass School in a small town north of Seattle, but in 1976 he was in a severe car accident and lost an eye, then later he dislocated his shoulder in a bad bodysurfing accident. He was no longer able to hold the blowpipe to make the glass, so he hired others to do the work. Chihuly has found worldwide fame and is reportedly worth over 10 million dollars.

Dale Chihuly

Building A Business Means You Get Paid Last 

The major difference between working for someone else and working for yourself is that as an entrepreneur you are fully accountable for both the income and expenses. That means everyone else gets paid before you make any money. So top-line sales (how much you sold) is never an indicator of how profitable you are as a business. Aeropostale just declared Bankruptcy, yet they had sales of 1.5 billion last year. Businesses at every level can be unprofitable, so if yours is unprofitable, you need to look hard at your business model.

Entrepreneurs have a choice – they can either try to grow fast and keep profits very low, or they can try to focus on profits, which commonly means they will grow more slowly. Why? Because to grow profits you have to spend money on staffing, inventory, technology, marketing, and a whole lot of other expenses. Your ‘owners draw’ can only happen after all of those other expenses are paid.

At Liberty Jane we actually shifted in our 3rd year and began focusing on sales growth instead of personal profit. Scroll back up and look at our annual sales and you can see it in the numbers. The shift occurred for personal reasons (related to where we lived and my day-job salary). I worked a day job until January 1, 2014 and until then, I was simply an evenings and weekends helper. Even today, I don’t technically draw a salary. My hourly wage is zero. Nor are we trying to make a ton of money from this business, but we make enough to live-on and we are continuing to try to scale the business fast, instead of maximize profits.

This also means that you will most likely get paid in ‘lumps’ rather than a steady paycheck. Some months are good, some months are bad, that’s entrepreneurship. You most likely won’t get a steady paycheck until you achieve a fairly high annual sales amount and can ‘bake in’ your salary as a normal expense. Why would an entrepreneur endure this type of treatment and even be excited about it? Because…

Building A Business Means Working To Create An Asset

The most important lesson we can share from our experience is that building a business means focusing on creating an asset that has long-term value, not just making sales. Your job is to work ‘on your business’ not just ‘in’ your business. When you work ‘on’ your business you are thinking about the long-term strategy to create an asset that has long-term value. Everyone will have a different long-term goal and work toward different asset strategies.

A good business creates assets that have long-term value. One of the best assets you create quickly and easily is an email list of fans, followers, and customers who are interested in your product, niche, or topic. Why? Because there is long-term value in having an email list, (which I describe in Email Marketing Power). But other assets include digital assets, (patterns, characters, books, videos, courses, apps, software) etc. These assets are more valuable than simply making a one-off craft item and trying to sell it. A good system sells items – and as they sell – they reinforce and strengthen the asset you’re trying to build.

Of course the bigger and better your sales, the faster you can build assets. But sometimes, many-times, slow-and-steady wins the race.

For example, every time we sell a new Outback Libby garment at auction, we reinforce that character concept, which we consider to be an asset of our business. Every time we sell a pattern from the Outback Libby collection, we reinforce it in another way. Every time we sell one of our Outback Libby books, we reinforce in a third way. One day, when Disney calls us and says, ‘can we make a cartoon out of Outback Libby?’ we will look back and say, ‘our strategy worked.’  

And of course, there are traditional assets you can work to acquire, like real estate that you buy and pay off from the proceeds of your monthly sales. Many traditional small businesses ultimately shut down their selling effort and their real estate ends up being the long-term asset with value that they can sell-off and profit from. You can use this strategy too.

Imagine making an extra $500 a month from Etsy sales and using the money to pay down your mortgage. After a few years you’ll look back and say, ‘wow – our strategy worked.’ 

Everyone has different business goals and strategies, but the main thing is – have one.

As most of you know we started Pixie Faire and have worked to make it the Internet’s Largest Doll Clothes Pattern Marketplace because we wanted to serve doll clothes pattern buyers in a unique way, but we also wanted to create an asset that had long-term value. We have no plan to sell it, but one day we will retire from it, or sell it, and hopefully we’ll look back and say, ‘our strategy worked.’ If you sell doll clothes patterns, and you’re reading this, and you don’t sell on Pixie Faire, we’d love to invite you to. It is the best sales channel for your work.

Building A Business Means Serving Others 

If you aren’t passionate about serving others, then don’t go into business. If people bother you, annoy you, irritate you, and if you generally don’t like them, then you aren’t going to have fun in business. I’m writing this insanely long blog post not to try and make any money (even though I’ve mentioned a lot of our various programs and products). I’m writing it because I honestly enjoy teaching, helping, and sharing.

If you are an awesome critic, but a bad servant, then forget trying to build a business. Business is relational. We do our best to serve our customers via Pixie Faire, Liberty Jane, and Sew Powerful. And of those three, our heart is probably most compelled by the opportunity to serve the women and children of Lusaka Zambia via Sew Powerful. As our for-profit business grows our charitable work will grow too – and that is amazing to us. It motivates us more than any financial goal ever could.

In Conclusion: I really cannot promise any of you that you’ll get paid for your craft business work. All I can offer is our best suggestions, tips, ideas, and the tools we’ve put together that you can use to speed up your learning and achievement. I hope this post helps a little – and that you didn’t get annoyed by my various links to our books, courses, and programs. We are trying our best to serve you – and be of help – and we’re enthusiastic about your opportunities.

We hope your plans and dreams come true.

Jason & Cinnamon

Ps. Thanks for reading this entire post! I’d love to know what you think, feel free to leave a comment and I’ll be sure to anwer. And to make it even more fun, let’s do a comment contest and giveaway a free ticket to the Pattern Academy in June, or a free copy of Youtube Marketing Power!

To enter simply leave a blog comment below or join our newsletter list. Enter via the Rafflecopter entry form below.

Official Rules: No purchase necessary, void where prohibited. Contest begins on May 16, at 11 Am Pacific and ends on May 31, at 11:59 PM Pacific.

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32 Comments on How To Get Paid From Your Craft Business

  1. Thanks for the overview! It has definitely give me some thing to think about.

  2. Starting a new business means you take all the credit and all the blame.

  3. I have not tried to sell anything I’ve made but this post was very informative and gave me a lot to think about. Thanks for sharing.

  4. Anyone know where I could find a marketing partner? Not an employee. A partner. Someone willing to get paid as little as I do until “strategy pays off”.

  5. Excellent information in this article! It helps me keep focused as I am in the process of re branding.

  6. I’ve helped setup an IT related business and sold my shares in it, but craft business is very different. Loved your writeup and making me think a lot. One item that I struggle with in the rural area we now live, is getting those customers who are willing to pay a decent price for an over the top item. I have the same probe not only with doll clothes, but crochet items, custom sweater jackets, or even our organically raised eggs. Our local area has limited $ so I need to learn more about finding customers in other geographic areas and not our local community.

    • Hi Jane, good point about the local customer issue. That’s true for a lot of folks, which is why setting up an online site, or selling on Etsy can be so appealing. It gives you the chance to get in front of a larger audience. The competition goes up, but so does the opportunity to engage with customers.

    • I have much the same problem. People like my handmade items and would be willing to pay, but I live in a spot where people don’t have much money. Online is working great for my rosary business, but I have a following with that. I tend to make hand-sewn or crocheted items and pretty much give them away. I just made $50 in profit for sewing 100 pocket tissue covers. I console myself that it was for a church group and maybe someone will request something that sells.

  7. Is this where we’re supposed to leave the comment for the entry? I already have a craft business. Starting one for me was really more about taking pride in my creations than about money. I know, realistically, I’m not going to get rich making each piece of doll clothing by hand, but every time I hear that Etsy “cha-ching!” I feel proud that someone loved one of my creations enough to spend money on it. I’m a stay-at-home, homeschooling mom so practically my entire life right now is wrapped up in my kids, and as much as I love doing what I’m doing, there were times (prior to my Etsy business) that I felt I didn’t have an identity beyond a wife and mom. Creating and selling? That’s just for me. It’s the little piece of identity I’ve carved out for myself where I’m “that lady who makes doll clothes.”

  8. This was an excellent article, and I think it highlights why I could never have a craft business. I really do prefer working with things rather than people.

  9. Great post. I have a business that is currently more of a hobby. I have a well made product but no marketing other than Etsy. You helped me see where I am lacking.

  10. Great article! It will certainly come in handy as we start our business! Thank you!

  11. Hey Jason,
    I read all the way to the end, thanks for this information packed post.
    So I’ve mentioned before that starting a craft business, for me, was not really a business plan. I just wanted to do something wit all the doll clothes I wanted to create. But having said that, I have taken the beginnings of this venture seriously and have done a fair amount of research – thanks in large part to your generosity in sharing a wealth of knowledge and information. I am pleased that the business is growing, in the few short months I’ve been at it. I do have a plan, but my plans are like baby steps, or should I say dolly steps? My most immediate goal is to get to 100 listings in my shop. I’m tickled everytime I gain another follower and find that people like my stuff.
    One of my goals is to make enough to enable me to pay for Pattern Academy tuition. That probably won’t happen by June – especially as I haven’t taken the prerequisite Design Academy yet, but hopefully you and Cinnamon will continue to offer this. (PS If I remember correctly, before I even dreamed of sewing doll clothes, I joined your e-mail list because I was intrigued by the name LibertyJane AND I like the sound of Cinnamon Miles – had no idea she was real, LOL – oh yeah, the doll outfits struck my fancy as well. 🙂

  12. You’ve opened my mind to thinking in different ways. Never thought about a strategy. Thank you for that.

  13. I don’t know how to put this into words, BRAVO!? You live what you teach, so many of the values/goals you put into words in this blog I have already noticed as I have followed you over the years. I am truly amazed at the way you SERVE. I am thrilled that you continue to be successful!

    • I actually HAPPILY pin regardless of my personal benifit because I am so impressed with your generousity and desire to help others grow.

  14. Love reading this. I tell myself every day that persistance will pay off. When I follow a plan it seems to help with my branding. It is not enough just to sit in your craft room and make things. You have to show the world your masterpieces. That means taking great photos, well written listings and sharing on as many media sites as you can. I also encourage people to leave feedback so I can continue to provide quality products and for potential buyers to have first hand knowledge on the reviews for my items.

  15. Thanks for the information. I love making the doll clothes and selling at craft shows and watch the girls faces as they see my creations. I enjoy making and selling just for fun so I make money to continue my hobby. I also like to give them away. I also like to rescue dolls, clean them up and give away to a needy girl. O course with a new wardrobe.

  16. Finding an untapped niche is crucial. Jason’s book, “Craft Business Power,” is a good read.

  17. My sewing biz is way more successful at craft shows but I do want to try and build it up online for those seasons when I don’t want to do shows. Thanks for all your articles, trainings, the FB group and anything you do to help us all along the way, it’s very much appreciated! I hope to someday have as successful an online doll clothes biz as I do a craft show biz.

  18. Jason, I always find your advice and the history of your dynamic enterprises with Cinnamon very interesting and informative. After reading several of your books and taking a couple of your courses, I still haven’t found the courage to create an online business. However, I am spending more time learning how the internet works and trying to make friends with social media. There is still so much of the computer world that is a mystery to me, as I’ve mentioned in the past. But I love design and sewing; and I never seem to tire of knowing the thrill of creating something that brings joy into the lives of others. I’ve been spending more time helping other designers by testing their pattens and copyediting their instructions, and I’d be very happy to find a way to make that a lucrative proposition; however, usually I am paid by receiving a free copy of the finished pattern. Lol! That is very cheap labor for many hours pouring over patterns and instructions looking for inconsistencies or missing data. But alas, I never seem to turn away from the opportunity to help other entrepreneurs to succeed, or having a desire to share knowledge gleaned through decades of sewing, designing, teaching and documentaion editing. It’s hard to let go of the past when you retire, if you loved your work — at least that has been my experience. Anyway, thanks for more good advice and good luck to everyone hoping to win the slot for the upcoming Pattern Academy course. It’s a marvelous opportunity! I’d love to attend myself, if I ever can afford to do so. May God continue to bless all of your remarkable endeavors. I love hearing about the good work you are both doing in Africa and how you allow all of us to share your important mission work.

  19. I compare myself to a ship without it’s sails and not sure where the trade winds will take me! I love preparing videos for Youtube, (want to produce how-to videos on crafting with recyclables), love,love,love posting on my new free WordPress blog (need a self-hosted blog to run affiliate ads), love Pinterest (need to use for commercial sales), love making one-of-a-kind doll costumes and accessories, have the desire to write a series of books (have never written a book) and mostly love conversing and having contact with people. Now the thousand dollar question is how do I proceed to utilize these loves into a thousand dollar a month income (this amount would make me happy). I am 78 years old and hoping to live to the age of 95 years old like my mother (now deceased). I do not have the computer skills of the young (but learning something new about this dreaded machine every day), dislike accounting, do not like to make a doll costume or accessories more than once, and I work alone. Somehow, I need to add sails to my ship in a timely manner so this ship sails in the right direction.

  20. Freedom is what it means to me.. Doing something I love and getting paid for it!

  21. Not long if one is truly interested in making a life style from a hobby. Thank you for sharing and caring for anyone that has a dream.

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