When you are just starting out as a business it’s natural to look at other businesses and wonder how they got there. I thought I’d share a little of my story and answer some questions that I’ve gotten from readers to make this as helpful as possible. Keep in mind, everything written here is my own personal opinion and I encourage you to do as much research as possible!
Starting Out
1. Do a little research. Obviously the first question is what are you going to sell? Do an Internet search and make sure there aren’t 4,000 people selling an identical product and the market is already saturated. If there are 4,000 people already selling it then you need to ask yourself: how can I differentiate my product in a sea of similar products?
2. Just go for it. Oh how I wish I had a screenshot of my Etsy shop when it first opened! It was so sad and empty looking…but I had to start somewhere! When I first opened my Etsy shop it was to sell custom portraits and nursery art….and I never had ONE sale off Etsy. I had better luck with my painting business at a local level offering them in boutiques and leaving my business cards around town….so I closed the shop for a while. Eventually I reopened my shop when I started making one-of-a-kind handmade clothing items and patterns.
Sometimes it’s easy to get lost in the details…..and honestly I think this is what holds so many people back from starting their small business. I often encourage people to just open a shop…..all you need is a name. You don’t need a fancy logo to get started…..just a few minutes to open an Etsy shop. Once you have a few things listed, start marketing to your friends. Don’t be discouraged if you don’t have a a ton of sales immediately. Starting out small though gives you the flexibility to shift your business model and figure out exactly what is going to work for you without investing a lot of money upfront! As you start to grow your business you can invest in it more…..a better logo and graphics, better packaging, more products etc.
3. Pick a great name……and make it easy to spell and say.
I picked mine on a whim…..but if I could do it all over again I’d pick something easier to pronounce. My daughter’s nickname is Boo and I added the color blue to it so it would rhyme. I used to mentor the cutest little boy named Li’l Ron…so that’s where the Li’l came from. I left the apostrophe out on purpose.
I’ve had to compensate for the fact that the name is hard to say: I own the domains www.littleblueboo.com and www.lilblueboo.com so I don’t have to worry about mispronouncing the name to people I meet on the street. I just say “Little Blue Boo” instead of having to explain that it’s “Li’l” but without the apostrophe.
If you think you might add other businesses down the road pick a broad name! Lil Blue Boo applies to my blog, clothing line, pattern line…..and many other things to come.
4. Etsy vs. Big Cartel.
I always recommend starting out on Etsy if you are selling handmade items or supplies. It’s a great way to test out a business because it’s a reputable site for handmade and vintage goods and it has a built in community of customers.
I am curious about when you moved from Etsy and why. Mostly I would love to know how you started out, and grew from there. – Jamie
I moved to Big Cartel once I had a web presence with my blog. Paying attention to my traffic through Google Analytics I could tell that most of my customers were coming from my blog and Facebook and not through Etsy searches. Because of that it was an easy switch for me. But, I never moved entirely to Big Cartel. I still have an Etsy shop where I sell patterns and sometimes list clothing. I always recommend keeping an Etsy store if you make the move to Big Cartel because it’s just one more way to generate new customers. On Etsy you only pay if you have a sale so there’s no downside to keeping a second shop….and it’s a great way for new customers to see feedback.
How did you decide the right prices for your products? How do you deal with family and friends asking for discounts? People who don’t handmake stuff don’t seem to realize that it’s not just the cost of supplies but the cost of my time! -Annie
Pricing can be complicated…..especially if you are on Etsy because you are competing against tons of other stores that look very similar and it’s hard to differentiate yourself by brand. There are basic pricing principle but they often require some tweaking:
(materials + labor + overhead) x 2 = wholesale price
wholesale price x 2 = retail price
Personally, I’ve chosen not to sell my products wholesale, so I’ve priced my items somewhere in between the wholesale price and retail price. It lets me offer my products at a more affordable price to my customers and invest back into my company with the % that would have gone to a retailer. But selling wholesale is also a good way to get your product out to a broader range of customers….there are pros and cons to everything. I’ll be writing more on wholesaling, trunk shows etc down the road.
My advice is to list some items and test out your pricing. If you don’t sell anything at a certain price point it doesn’t mean your price is too high……it might mean you need some better photos and better marketing. If you try that and you still aren’t selling, then you might try lowering your price.
As far as friends and family, that’s a tough one. I recommend have a set “friends and family” discount of 10% or 20% and maybe only on certain items. Items that are in high demand should be reserved for paying customers because that is what keeps your store in business! On the other hand, your friends and family can be your best advertising….so maybe you can save imperfect items for them as “gifts.”
My business seems to be taking off and I am a one woman show who hand sews appliques on onesies/shirts among other things. My problem is finding balance. Between taking care of the house, working part time and chasing a 20 month old, not to mention we are trying for baby #2, how do I find time to do what I love? How did you do it in the early stages before you had help? -Shazia
I think this is what everyone who owns their own business struggles with. It’s important to only take on what you can handle….otherwise you’ll make yourself miserable. I also recommend finding help…..so you can focus on the aspects of the business that you love the most. For me, my true passion is blogging and making new things…..so I had to find people that could help me fill in the rest of the areas: filling orders, shipping, sewing etc. The hardest part of any business is figuring out how to grow in a smart way…..for me personally it’s been growing in baby steps.
This was a great article, especially the timeline section. I am working on child number four, so I am not sure how this is all going to work out, but it seems to be trending in a similar direction. I am watching a ton of youtube videos, pinning and blogging lately and your blog has stood out. It is a great resource, easy to read and one I find myself effortlessly taking the time to read each time I receive a feed.
I look forward to the next two articles, especially the photography.
Very interesting and inspiring! It’s funny how you discussed your name. I think you did well whether you know it or not. I recently watched a video about naming businesses. Having alliteration and rhyme can have a powerful impact! Lil blue boo has both. Many people focus on a logo but forget that what something sounds like is just as important. Think of the successful brands that use alliteration or rhyme. . . Bed, Bath and Beyond, Coca Cola to name a few.
I tend to get bogged down by all the things I don’t know how to do I wonder if customers find out that no, I can’t make that for you because I don’t know how yet, it will make my teeny tiny “business” less legitimate and my other products less desireable. Am I just not ready to do this yet or is that normal?!
I appreciate you taking the time to write about managing a small business. Do you have your help sign non-compete contracts or what?
Loved this post. Thanks for sharing! I have a difficult time not getting bogged down with all the details. You are so right, ya just have to go for it and get it started.
Looking forward to the Marketing article.
Laurie
I look forward to your blog post on marketing. I just opened my etsy store and I have done tons of research on the product I am selling. I feel like my price is good but I know that I need ways to get my product seen by those who would purchase it. I am running my business on a debt free policy so I would love to know how to advertise my product without spending a lot of money.
I loved reading your timeline. I love seeing moms turn their hobbies and talents into successful businesses. Can’t wait to read Photography 101!
Great series! I’m a new mom and very interested in starting an Etsy shop. I just need to decide what exactly I will sell (I have a few ideas I’m mulling over.) Anyway- this series is great because I definitely feel like I wasn’t really sure where to start. Thanks!
Awesome information. Thank you so much for taking time to share all this!!!
Thanks so much for sharing your story, its always great to hear what other people are doing. I ended up changing my company name after I found out that some people were offended by me using “kids” in the name. Felt I was comparing children to goats. So, possibly didn’t need to take them too seriously but figured better safe than sorry.
I am really looking forward to the photography and marketing posts.
Ashley! I really loved your article and I have to tell you (I already did, but I really feel like doing it again), you inspire me.
I’m starting a new business now. It’s been really hard to me and my husband (and family) to decide but I found out that my husband supports me (And that made me love him much more every day).
In my country this kind of web sites like Etsy and others, do not work as well as in the USA, so I have to think creatively to reach my clients. This is why I can’t wait till Photograpy 101 and Marketing 101!!!
Thanks for sharing!
Love your timeline. I knew you had quite a few employees but was shocked when I saw you had financed an industrial machine for her to work from home. That is genius!
Ok, what I would like more info on is:
The business plan/taxes/financing if needed.
I think opening a LEGIT business vs. opening a “cutting corners” business is something that all of us handmakers should think about. When do you need to get a license? Craft shows and taxing your items. Etc….
I’m not saying go into accounting for us, but if you ever need something for your series I know that’d personally help me. Just understanding the “business model”.
PS, thinking and praying about your appt today.
Thank you SOOOOOOO much for ALL the advice you give! I started my own home business 2 years ago (making custom dog clothing). It is fun, exciting and overwhelming all at the same time!
You did a good job breaking it down 🙂 I would consider myself in the late beginning stages of my business. I have thought about everything you mentioned thus far. Been trying to decide how to hire an extra hand. I have 2 kids and work every weekend as an icu nurse. during the week, i sew, design patterns, etsy, fb, blog, email, kids, homework, clean, hmm hmm( you know what that means, since they need attention too! 🙂 lol. But when you are so busy, that takes time out of a busy schedule, right!! All in good fun, but still the truth, lol!! I would say, house cleaning lacks, i just make sure clothes are washed, not always folded, house semi picked up, and dishes done. Right now i am making it work, but see a big future and I dream big! 🙂 I just put my fb page, since my etsy is closed until i get enough patterns to open with. But it is listed as the same name without the 1.
Thinking about you in your time of need, you have a great attitude. I know it is hard! Especially when you want to play with Boo and don’t really feel like it. I still haven’t seen what kind of cancer you have, i missed that.
I am having a hard time with placing prices on my items.. can you help me?
You know how you said
“(materials + labor + overhead) x 2 = wholesale price
wholesale price x 2 = retail price”
Well if I do that, the price of the items become way to expensive :/
I researched and finally found great priced materials so I got that covered..
For labor I work alone and with 3 volunteers that write on my blog once every 3 weeks each – I give them 50% off coupons to my shop as pay. But as for labor I pay ‘myself’ $10 {is that a good price?} and I time myself as I do a project from beggining to end. But I never charged for overhead .. which would include what?
And I neverrr doubled or tripled that cuz it already gets to pricey..
I love to sew bags but each bag would take about 4 hours to make.. :/
so thats $40 + $5 or so in materials +$0 overhead costs = $45×2 = $90! How can I charge that much for a purse? :/
And every item is different so I have to photograph each one individually.. And I don’t charge that into the price..
heres one item
Very informative and useful post. There’s a saying “It is always easy to achieve a goal but takes more effort to retain it”. That’s why when you started a business it needs a lot of courage,perseverance and faith in yourself that you will continue what you started no matter what the hindrances are coming.
thank you so much for posting this – i just started building my new business and this was so helpful!