Running a handmade business can be time consuming. Thus, to be effective in running your business, it is important to manage your expenses carefully. This means watching how much money and time you are spending on your business.
Building and sustaining a profitable business is possible, especially if you are strategic about the choices you make. While small costs and expenses may seem minute now, they can add up, impacting your cash flow significantly in the long run.
If you are looking for ways on how to save your handmade business time and money, this article will show you interesting and often overlooked ways on how to do so.
Reduce material costs
There are various ways to reduce material costs, including buying in bulk and sharing these costs with others. Reducing material costs will allow you to invest in other parts of your business, such as marketing and booth fees.
Buying products in bulk can not only save you money, but also keep your supplies stocked. This can provide you a peace of mind knowing that you have all the materials you need for a longer period of time.
To by stock upfront requires indepth knowledge of your material usage and manufacturing activities and sales trends - investing in an inventory system designed specifically for handmade makers can be an excellent way to make sure the costing and stock data you need is always at your fingertips.
Alternatively, consider sharing costs of supplies and resources with other handmade businesses. This can also help cut down on shipping costs while supporting other local businesses.
Conduct regular auditing processes on your product costs and pricing. This will help your business grow while giving you an idea of whether your prices are working in your favor.
There are various steps you can take to ensure that your profit margins are serving you and growing your business.
Invest in Product Research
Invest some time in research and development, to help improve your products in the long run. Investing time in product research now can save you time in the future.
It is important to validate your product, validating that others will love it as much as you do. Product validation can help save you time and money, giving you an idea on what potential customers want and not want.
Some ways you can validate your product include:
- Seeking feedback from family and friends
- Online surveys
- Researching on the demand of your product
When you have your own business, it is important to use your time wisely. This means outsourcing work when necessary. Delegating work can help you spend more time on bigger tasks for your business.
Small things such as scheduling your blog and social media posts can save you more time than you think. Alternatively, consider hiring a virtual assistant to help with any administrative work.
Narrowing and prioritising your focus can help you spend time on more important parts of your business. This will help you prioritise projects while improving on your business at the same time.
Cancel unused subscriptions and services
If you are still receiving services you no long use, it is time to cancel them. cancelling any unused subscriptions and services is a way to help you cut some unnecessary costs.
Also known as the Pareto Principle, this rule states that 80% of effects results from 20% of causes. Applying it to businesses, ensure that you focus on what is working best and efficiently, allowing you to optimise your time and get more done in a shorter amount of time.
Make Long Term Goals
Having long term goals will give you and your business something to aim for. Create 6-month, 1-year and 5-year goals. These goals will help you keep your focus, moving you to the right direction. While it may seem overwhelming to start creating a long term financial plan, it is important to do so.
Creating a plan will allow you to understand more about where your business is now, where it will go and how it will get there. these plans will also help you remember the big picture, motivating you to continue.
If you are doing projects which will not be profitable or help you achieve your business goals, learn to say no. If profit margins for an order is too narrow, it is better to politely decline.
Regularly revisiting your goals and budget will help reduce the risk of falling behind. Constantly update your goals, taking a look at them every month.
Grow Your Network
Speak to people in the community and grow your professional network — every person you meet could be a potential customer or even partner. Talking to people to find out more about how to improve your business can benefit in the long run.
A tip to build a network is to take advantage of social media platforms such as Facebook, Instagram and LinkedIn. These platforms allow you to let your followers know more about your business venture, allowing others to provide helpful tips to improve your handmade business. Join groups relevant to your handmade business, asking questions and sharing tips throughout your journey.
Use Free Tools
While hiring employees and purchasing expensive software may not be in your budget, start out by using free tools to help with your handmade business. There are various apps online that can help you create a logo, invoices, photos and more.
Some free tools to look into are Canva for creating professional looking social media graphics and other visual content and Unsplash, for quality domain free images.
There are many ways you can save time and money while increasing profits for your handmade business. Creating long term goals and constantly referring to them can help you and your team focus on the bigger picture, increasing efficiency in work.
If you are having trouble with budget for your handmade business, try some of these tips to cut cost while maximise profits in the long run.