Undertaking this “Getting Down to Business” series might be the hardest thing I’ve ever done! Entire blogs are dedicated to running small business! I have an MBA but more often than not my business decisions come from my gut…..not from analysis. So that’s how I’ve decided to approach this series….from what comes naturally and what has worked for me.
This is my first official business post and I thought I’d just start off right away with what I think are the 10 most important things for running a successful small handmade business.
To me this doesn’t mean make something high quality……it means make the best quality.
I take customer feedback very seriously…..and the goal is to never make the same mistake twice. This means tons of research on fabric quality, ink quality etc. We go to great lengths to hand silk screen every single item with “tagless” tags for comfort. I never mail out something I’m not proud of. If an item doesn’t meet my quality standards we’ll delay shipment….and contact the customer hoping they understand. I am constantly inspecting new things and other lines of clothing to see how we can improve on quality.
(more after the jump)
Customers want to know that they are valued and respected.
Put yourself in the customer’s shoes and look at the problem. How would you expect the situation to be resolved if you were from the outside looking in? Make sure your policies are written down and remind your customers about them often. You may have to make exceptions to your policies from time to time and change them as you go along. It’s hard starting out when you have to take a loss on something because of a mistake you made…..but it’s worth it in the long run.
My personal opinion: Any seller that has a NO RETURN OR EXCHANGE policy is sending a message that they don’t stand behind their product (truly custom items are obviously an exception to this rule). I used to have that policy until I put myself in the customer’s shoes. I had it mostly because I didn’t want to have a bunch of returns at the end of a season because someone didn’t end up using the clothing. Since I have a small handmade business with a short shelf life I made up my own policy that fit my business….the customer has 10 days once they receive the product to decide if it’s for them or not.
Even if you are just starting out, pay your taxes and do your homework on permits and licenses…..or it will come back to haunt you.
I pay sales tax, employee/unemployment taxes, and income tax on everything Lil Blue Boo…..and I have ever since my first sale. I use Paycycle.com because it makes my life easier: it handles all taxes, forms, payroll etc. It’s about $40 a month but it’s a business expense that I can write off and it saves me about 10 hours of work (which is worth $4 an hour!). This may seem tedious and unnecessary at first if you are only selling one item here and there…….but as you grow and let the world know through blogging and Facebook that you have more help and employees……it’s basically public record.
You don’t need to spend a lot of money to start a business.
I started out with a dinky camera and a $99 sewing machine. I’m very conservative when it comes to investment because I like to spend my time being creative, not worrying about how I’m going to pay off another piece of equipment.
Borrow. Do you have a friend that has a nice camera that could help you take some photos of your product? Does your sister have an extra sewing machine or glue gun you could borrow?
Barter. Find someone that is willing to trade their services for product. Do you know a graphic designer who might design a logo in exchange for some amazing handmade goodies?
My rule of thumb? Never write anything in an email or online that I wouldn’t say to someone’s face.
If you post something not nice on your blog or twitter you can never take it back….someone will see it even if you delete it. A few people close to the situation might know what you are talking about but 99% of the world won’t care. Plus, word gets around. There is also a rare tendency for small groups of sellers to gang up on another seller…..which I’m pretty sure is a form of cyberbullying. Stay off the bandwagon. And there are the touchy subjects:
Legal issues. First of all, make sure you copyright your work (you can use www.myfreecopyright.com) and make sure to register your trademarks to protect yourself (I use www.legalzoom.com). If you think someone has infringed on a copyright or a trademark, approach them with a nice professional email or certified letter. They might comply immediately having no idea they were infringing in the first place. Take screen shots of everything and save every email. If they don’t respond have an attorney send them a cease and desist if you think it’s worth the expense.
Copycats: This topic could take an entire blog post so I’ll write more on this later but here’s a summary: if you feel really strongly that someone has directly copied you take the same route as you would with a legal issue. I’ll be honest though, I don’t spend ONE ounce of energy on copycats. If I think someone has copied me…..great, good for them…….as long as they don’t have a website they are calling Lil Blue Boo and selling Boo Blue clothing or using a copyrighted graphic. And my number one rule? NEVER draw attention to the copycat…..otherwise you are giving them free marketing!
Haters: Ignore them and take the high road. Yes, sad as it is, if you experience any type of success there will be haters that love spending their energy trying to bring you down. But just think…..while they are busy trying to bring you down you can work extra hard on your next big thing! Never get involved in the petty drama. It only takes a second, but take screen shots of everything and save every email in case it gets out of control…..there are laws against cyberbullying and libel. One of my favorite quotes: “Do not disappoint your haters this week. Keep rocking extremely hard!” —Rev Run
I’ll admit Pinterest is addicting. It’s fun to look at all those beautiful ideas and crafts in one place…..but a gazillion other people are looking at the same thing. I’ve noticed an amazingly quick cycle on Pinterest:
Day 1: a new idea pops up
Day 2: a new idea is pinned and repinned 4,000 times
Day 3: a new tutorial pops up for that new idea
Day 4: a 2nd tutorial pops up for that new idea
Day 10: 20 new tutorials pop up for that new idea
I look for inspiration in unexpected places: travel magazines, photography websites, home decor magazines, old family photos, vintage books etc. Keep it fresh and find a way to organize your ideas.
Keep track of all money coming in and all money going out.
Your accounting doesn’t have to be fancy…..to start out you just keep a notebook where you keep track of monthly expenses and monthly income. You’ll be surprised at what adds up and you can find ways to cut out expenses and overhead so you are on track to make a profit!
I do all my accounting in Excel because Quickbooks isn’t as compatible with Paypal as I would like it. I’m also obsessed with ratios and growth rates (so maybe I did learn something from getting my MBA). If you aren’t numbers oriented find a friend to help you do some analysis on your financials! Put it on your calendar at each month end to finish your P&L (profit and loss statement).
Eventually it becomes counterproductive to spend your time on certain things.
As your business grows you can’t do everything yourself. Could you hire someone to help you iron fabric or package your items? What about a part time assistant to help with email? If you want to grow your business you can’t spend countless hours on the minutia.
Find ways to get noticed!
Collaborate and cross promote with different people and business lines. Whatever you do….don’t spam other sites and sellers. And if you write someone asking them to collaborate make sure you’ve read their blog and get their name right.
You could write a guest post for someone. You could send out some free product to someone that would love, appreciate it and write about it. You’ll have to brainstorm until the end of time for this one…..it’s all about coming up with a unique idea!
If you are running a business, treat it like a business. When you are first starting out you’ll bend over backwards to meet special customer requests….but as you grow this just isn’t feasible anymore. For me, I know my team’s limits and I know overwhelming them would only move us backwards.
Hope this helps some of you! Just remember these aren’t going to work well for everyone…..they are what has worked well for me. When in doubt always seek out the advice of an accountant and an attorney and do as much research as possible!
Stay tuned for more! I’ll be elaborating on each each of the topics in the future!