by Patrice Lewis

Courtesy of Handmade Business

I recently spoke with a friend who was attempting to turn her hobby (superb needleworking skills) into a business (providing vestments for Catholic priests). ''I have the craft part down cold,'' she told me, ''But I'm having trouble organizing myself to turn things into a proper business.''

I found this to be a common problem with many beginning craft businesses. Most craftspeople have perfected their skills and techniques, but they often lack the knowledge to turn those abilities into a moneymaking business.

1. Plan ahead
Most craftspeople go into business at the urging of friends--''Gosh, these are great! You could make a lot of money selling them!'' Often your friends are quite right--your craft is great, and you can make money with it. Unfortunately, you could also lose money in the process.

Preplanning is the key. You don't jump into a car and cruise down the highway without first (a) learning how to drive a car and (b) getting your driver's license. The idea is the same when starting a business. You need to learn the ropes of conducting business before jumping onto the business highway.

Often this means creating a business plan. If the term ''business plan'' scares you, just call it a ''plan.'' It doesn't have to be anything formal, merely a map from your business hopes to their logical conclusions.

For example, how do you see yourself running your business? Do you want to eventually replace your day job or are you satisfied just bringing in a little money on the side? Do you see yourself selling through a website or through eBay? Do you want a brick-and-mortar storefront? Do you want to travel the show circuit? Do you want to sell wholesale to retail stores?

Answering these questions determines how you will approach your business and allows you to plan accordingly. For example, if you want to open a physical storefront, you need to research locations, lease and renovation costs, signage, inventory, employees and other related matters. If you want to open an eBay store, you'll need to get a PayPal account, learn to photograph your products, research the ins and outs of online purchases and decide what guarantees you'll offer.

2. Get some space
Take it from me; It's hard to start a business on the kitchen table or other cramped spaces grudgingly stolen from common family spaces in your home. After all, do you really want to clear away all of your supplies and materials when it's time for dinner or when the kids have to do their homework?

While thousands of home craft businesses have been successfully started on the kitchen table, it's not easy--or efficient. Do your best to separate your work space from your family space. You could use a converted closet or bedroom, a basement or garage corner…the possibilities are endless.

3. Multiply your production
It goes without saying that when you start a business, you need sufficient inventory to sell. This also means you'll have to stop going to the local craft store for supplies and instead order them in wholesale quantities. If you need 250 yards of velvet to make a production run, for example, the local Jo-Ann's is unlikely to have that much on hand. Even if they did, the cost would be prohibitive. Instead, find out who sells velvet wholesale (luckily, the Internet has makes this easier than ever). Finding reliable and appropriately priced suppliers is an important step when starting a business.

4. Research the market
I've harped on this before, but it bears repeating: Before launching your beloved craft into a full-fledged business, find out if anyone is interested in buying it.

My friend who makes vestments, for example, started supplying garments to her local parish priests after learning they had a hard time finding these ceremonial robes. Often the priests would use vestments for years, even decades, until they were shabby and threadbare. This, she learned, was often due to a lack of skilled artisans rather than budgetary constraints. She found a niche that needed filling, especially considering it is a nationwide problem.

So research your market. Do a few shows to test-market your product. Talk to people and find out what they like or dislike about your items (price? quality? color? size?). Sometimes it helps to haunt Internet chat rooms or other online sources to learn peoples' tastes and interests. And of course there's the ever-popular (but extremely difficult to follow) advice of ''find a niche and fill it,'' such as with my friend's vestments.

It can be painful to learn that no one wants to buy your crafts, but it's even more painful to sink significant amounts of time and money into a business only to watch it fail due to insufficient research.

5. Have an Internet presence
Even if you're a computer idiot like me, get your name online. Blogs can be set up for free, and websites can be free or cheap. Also consider a social networking site like Twitter or Facebook. Your Web presence doesn't have to be expensive, but it does have to be.

Make your Web presence professional and informative. Potential customers enjoy learning the history behind your craft, how you make it, where you market it and other pertinent information. In this technological age, it's considered a drawback if your craft is completely absent from the Internet. As an added bonus, a website or blog can reach far beyond the geographical limits of your region.

6. Get legal
Of all the things you do when setting up your business, making it legal will give you the greatest peace of mind. This includes researching your area for zoning requirements, permits, licenses and, of course, taxes (city, county, state and federal). Depending on your product and how you sell it, you may also need suitable insurance.

Taxes are the one thing people instinctively want to skirt, and yet this critical part of your business is the most likely to catch up with you (in a bad way) if neglected. Document everything--your time and miles on the road, receipts from every purchase, phone records, etc. The more documentation you can produce at an audit, the more you'll convince the IRS you're legitimate.

I have a writer friend who astonishingly never saves a single scrap of paper proving her authenticity as an author. A published book will not convince the IRS to accept enormous deductions unless you can document all the time, effort and expense it took to write it.

Same goes for a craft business. When in doubt, do notthrow it out. Keep your receipts, copies of paid bills and all other proof in a file cabinet or other storage space. Your bookkeeper will thank you in the end.
7. Know your costs
Craftspeople, being the creative geniuses they are, often haven't the faintest idea how much it costs to produce, sell, ship or otherwise distribute their work. These numbers are critical because they will help you price your products.

Many beginning craft businesspeople lament they're not bringing in enough money to make a living. Upon further research, it's often demonstrated they failed to include shipping costs, packaging, electricity, labor, equipment purchases, taxes, insurance, permits, etc., into the final price of their product.

Let's say you make cloth dolls. While it's easy to see how the materials used in the doll are incorporated into the price you set, what about shipping costs? Booth or storefront rental? Web page set up and maintenance? Travel expenses? Your time? All of these are legitimate costs associated with producing your craft, and need to be amortized into the cost of the dolls based on how many dolls you sell each year.

As an added bonus, the cost of doing business is usually tax-deductible--so keep records!

8. Streamline
What kind of strategies, services or software can you utilize to streamline your production, paperwork or shipping? Take advantage of computerized services for bookkeeping, shipping and inventory, either by buying packaged software or by using easy-to-print labels or postage from shipping service websites. Anything that can make your workday more efficient--and doesn't cost too much--should be considered.

A more practical application for streamlining is physically organizing your workshop, studio or other space to maximize efficiency. Knowing exactly where things are located can shave minutes and even hours off a production run. It also makes ordering supplies easier because you can see at a glance what you're low on.

9. Network
''Networking'' became a buzzword in the '80s, and I always associated it with forced and uncomfortable conversation at cocktail parties (something I'm lousy at). Fortunately it's not as bad as all that.

Networking simply means you're visible in your community. You carry business cards and/or brochures. You teach classes on your craft at various venues. You're involved with Chambers of Commerce or other community functions. You volunteer your time or service or sample products. You have an Internet presence. You utilize social networking sites. The possibilities are endless, and you have the luxury of picking the networking techniques that fit best with your personality and style.

In other words, don't hole up in your studio and assume customers will beat your door down. They can't do that if they don't know you exist.

As you can see, turning a hobby into a business is not necessarily fast or easy. It is, however, worth it. There is a great deal of satisfaction in contributing to your family's income due to your creativity and business smarts.

I would like to thank the individuals who kindly contributed their advice and expertise in the writing of this article:
Patty LaDuca of LaDuca Liturgicals
Donnyale Ambrosine of Simply Alive!
Angie Barrett of Angie's Suds 'N' Such
Linda Carlson of ''News for Parents''
Mary Kearns of Herban Lifestyle, LLC
Nanette Thorell of Enchanted Hen Productions
Camille Ronay of Georgia Made Georgia Grown LLC
Jennifer Untermeyer of PurpleSnakes LLC
Pablo Solomon

Patrice Lewis is co-founder of Don Lewis Designs. She and her husband have been in business for 16 years. The Lewises live on 40 acres in northern Idaho with their two homeschooled children, assorted livestock and a shop which overflows into the house with depressing regularity. Her e-book, The Home Craft Business: How to Make it Survive and Thrive, is now available.