How to Start a Craft Business? 7 Easy Steps to Follow

making craft products

Do you have the ability to think in new and creative ways? Are you looking to make a name for yourself and get paid? Have you been dreaming of starting your own craft business for some time? Don’t know where to begin? Don’t worry we have just the checklist for you.

Keep reading.

Checklist to Start a Craft Business

You need a business plan to build your company. We have the blueprint for you. Let’s get started.

Step 1.Make a business plan

You will need to have a plan before you can start. This business plan works like any other business, it has the important dos and don’ts for you to consider. This business plan answers all of the essential questions that will help you build your company’s framework. Let’s begin.

Is it expensive to open a business in the craft industry?

You can get the general idea through this table.

Costs general No Minimum Start Up Costs Minimum Startup Investment
Small Business Insurance 500 $2,000.
Lawyer Fees $0 $1,500
Permit and license fees $50 $700
Set up business: LLC & Corporations $50 500

This will give you an idea of how much it would cost to set up the first server. However, this is only a guideline. You can expect more or less depending on how your business works.

 Decide your Niche

The possibilities of what you can and can’t do are endless, depending on what you know best you can decide what will be the niche of your craft business. The wide variety of craft options available allows you to choose from. This could be a holiday thing or a year-round affair. No matter the product, it must be something you stick to. It could be one or more products, however, it should be something you are confident with. Your skills will determine the identity of your band. You will need to learn a lot about your market once you have decided what niche you want. See what your town doesn’t have and capitalise on that, you can’t put five craft businesses in one area and expect them to all workout. It is important to identify your competition. We’ll be discussing this more in the future.

 Know your Target Audience

You have to know who your target audience is, who it is that you are catering to is the most important question that shouldn’t go unanswered. You can look at trends in the area and determine what craft interests they are interested in. Find out how to reach them the best way. It is possible to get a good understanding of the market in many ways. Knowing who purchases what is the best way. It will also reflect your understanding of the target audience.

 Crafting Equipment and Material

These questions will have been answered in great detail. Now you can focus on how to create crafting material and equipment.

What crafts are the best for making money?

Holiday-themed craft does very well, anniversary-birthday crafts and accessories also are all time hot, one can argue that it is seasonal but it’s simply not true every season is filled with something or the other to celebrate. Your marketing and how you market it will determine the rest.

 How much should you charge per day for crafts?

Start by working for friends and family. This will show them how competent you are. Then you can set the rates based on what equipment you use and how much you earn for your labor. If you’re working on a large project, it is okay to start slow and easy. 

 How much profit can you make with the Craft business?

Marketing and talent are just as important as any other aspect of a business.

What are the best ways to make your business more successful?

Start by establishing your business, then market it to others so they are able to hire your skills and talent. After you’ve established trust with your customers, you can begin to take orders in different locations using social media.

Name Your Business

Names should be memorable and easy to remember. You should choose a name that best describes your company’s soul. 

You can verify the name you choose isn’t already used by doing an internet search. 

After that, you can register your company name and create a moodboard for your business card.

Step 2 Form a legal entity & Taxes Registration

Although it may seem the least interesting step, this is an important one. You don’t need to know all the paperwork required to set up your company. For your business to meet the legal requirements you’ll need the necessary licenses, permits, insurances and other documentation.

Your business location and structure will determine the legal documents you need. Each license would have a different set of requirements. There might be multiple licenses you need, including at local, state, and federal levels. For the exact same, you can use the SBA’s website. Check with your local chambers of commerce. You will also need to know about restrictions if you plan to work remotely. Online seller licensing is required if you plan to take your business online.

You will require an Employer Identification Number (EIN), if your company plans to employ employees. An EIN is important because of tax purposes and it’s quite mandatory if you’re willing to hire employees.

You will also need to have business insurance. This is essential for employees and non-employees alike. Mostly it helps you cover worker’s compensation, unemployment, and potential disability insurance. Also, you will need commercial and general property insurance. It is important to determine what permits are required. A lawyer can help with this. An expert would be able to help you navigate the law. They would also ensure that all legal requirements are fulfilled in order for you to start a crafting business.

These are just a few of the fundamental legal requirements that you must remember.

Step 3Business Bank Account Registration

You can choose the kind of credit that you’ll get once you decide on your business entity. The business lines of credit have a lot more flexibility than a standard business loan so that’s something you should consider. Business credit cards are also available. They offer 0% intro APR credit cards. The interest-free loan is nearly like an interest-free one, as long as the remaining balance is paid off before the offer ends. You can also finance your equipment separately. This is where a lender lends money to you only for equipment financing. The equipment will work as collateral for the loan and it’s much easier to qualify for this kind of funding. You will also need to determine if your business savings account will be converted to a checking account. Most businesses open business checking accounts for their first business. Established companies with higher cash flows will opt for a business savings account.

 Step 4Required licenses or permits 

  • The location of the business and its structure will affect how licenses are issued. As we discussed, legal documents can be very different. There may also be multiple licenses you need, at different levels, such as local, federal and state. 
  • You will require online seller licensing if your company intends to go online.
  • You will require an Employer Identification Number (EIN), if your company plans to employ employees. An EIN is important because of tax purposes and it’s quite mandatory if you’re willing to hire employees.

To help you find this, consult a business lawyer.

 Step 5Small Business Insurance

As discussed earlier you will need business insurance,  Mostly to help you cover worker’s compensation, unemployment, and potential disability insurance. Also, you will need commercial and general property insurance. 

Step 6 Your Brand is everywhere

If crafting is not something you enjoy, you should consider becoming a wholesaler and ordering in bulk to get the opportunity to tackle large projects. Online shopping can offer better prices, but you need to calculate the amount of inventory that you’ll require before placing items in your cart. To make it easier to find a supplier, you must first know which supplies are needed. You can also estimate your supply costs by using this information. Learn from the experts how they did it. After you have figured your inventory system, you can use an inventory management application to keep track of what is coming in and out of your stock.

When you have your inventory in order, it is time to start spreading the brand. This can be done by reaching out to local shops and schools. After waiting for the word to spread, offer your service free of charge for a time and then you can start taking on niche-based craft projects.  

Take up projects that are holiday-based to ensure a loyal customer base.

  Step 7Your business website

This can be done at the start of your company or later when you are more established. This is a professional job as your website will be the main face of your company. It is generally a smart decision to invest in a website from the beginning. It is easy to do this by reviewing the available domain names, and then purchasing the right domain every year. Buy the domain name for your business. It will allow you to choose payment options which will help you and your company grow.

 How to promote your Craft business? 

Social media marketing can be an amazing tool. You have many options. To market your company, you can make use of platforms such as Instagram, Facebook and Twitter.

Google Ads – Google Ads can be purchased and are very useful, especially when you’re targeting specific areas.

Instagram – Instagram has become one of the most used social media apps, most businesses exclusively use this app since its aesthetic is ideal for art, craft, and fashion-based business. You can create small demo reels showing what your crafts skills can achieve and then you’ll be able to see the magic.

Facebook- You can post to these groups and reach more people.

Twitter- Not the most ideal platform for a craft business but still necessary to be active there, you can use it as a customer service tool since it’s easier for people to reach you there and talk about their grievances.

You can also sell your craft online

You can either sell your products on the website or through Amazon once it is online. Your products can be sold via Facebook, Instagram or Twitter.


There are many ways to sell your craft but the most important thing to do is to know what’s more important to you in this business, set your goal, and then follow them without flinching. While some people may think that a craft business is merely a hobby, if you create a business plan you can make countless profits. Remember the 7  steps and you are good to go, all the best.

How to Start a Craft Business Seven Easy Steps To Follow appeared first at Entrepreneurship Life.

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