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Financing a Craft Business

Financing Tips

One of the biggest questions that I have been having trouble finding advice on is finances. What is the best approach to financing your company?

How do you put in a certain amount of money and then expect to pay yourself back AND end up with enough profit to make more of the product?

Any financial reading you could suggest or tips on how you started financially yourself would be great!

Thanks so much!

Katie

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I studied three years to get an MBA degree and another four to get a CFA certification and I still find it difficult to answer your question.

Volumes have been written on this subject and still new businesses fail at an alarming rate. I took a very conservative approach to getting my craft business going, which I wrote about in Financing Your Craft Business. There is more advice in Budget Advice for New Craft Businesses.

First, start small. If you have another job, keep it until you’re established. Keep careful records that show precisely what it cost you to make each item and how much you were able to sell it for. Buy only enough inventory to make enough products that you are fairly certain you can sell. Make every project pay for itself.

Roll your profits back into the business at first. You will not be able to “pay yourself” until your business get off the ground.

Read through the For Profit pages of The Artful Crafter. You will find a lot of advice on starting your business and marketing your products, insurance and more. In these articles you will also find links to books about starting and financing a craft business that I have found helpful.

With the knowledge you gain, you will be in a stronger position than 95% of people going into their own business.

I wish you luck.

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Recommended Reading

When considering starting your own business, you need all the help you can get. Consider the advice and maybe even financial aide you will get from these resources.

Selling Your Crafts by Susan Joy Sager
An indispensable source of information for craftspeople on selling in today's marketplace, this unique guide not only gives tips and tactics for promoting and marketing crafts, but also provides the necessary forms and contracts for starting a business. You will learn how to devise a business plan, construct a budget and much more.

Financing the Small Business: A Complete Guide to Obtaining Bank Loans and All Other Types of Financing
By: Robert Sisson

2005 Guide to Federal Grants and Government Assistance to Small Business
2 CD set published by the US government.

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