How to Start a Craft Business Right

The quiet of February provides a good opportunity to lay a solid foundation for your handmade business.

By Lisa McGrimmon | Published Jan. 26, 2020 | Modified May 13, 2020
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Here's how to start a craft business off on the right foot and get the administrative and business management fundamentals in place.

This month we're going to dig into a lot of small business management tasks that can be easily overlooked in the excitement of starting and growing a creative business.

Artis's brushes and paints. Text - February How to Start a Craft Business. 15 things to do in February to get your business management fundamentals in place

I'm going to guess that designing handmade products is more enjoyable to you than buying business insurance.

You probably find the idea of planning a craft show booth more compelling than registering your business name.

Those less creative administrative tasks may not be the first things you want to tackle, but they are essential to the well-being of your business. Once they're in place, you'll be glad you did the work.

If your business is brand new, you might feel overwhelmed by everything that needs to be done. The great news is, if you get good advice and learn how to start a craft business right from the start, you won't have to spend time fixing mistakes.

And if your business has been around for a while, but you didn't put all of the fundamentals in place when you got started, February is a great, slower time to get it all in place.

You're past the busy Christmas shopping season, and you have some time before summer craft shows begin. You'll have more freedom to focus on the administrative and management side of your business at this time of year.

How to Start a Craft Business Right

So you know: I'm not a lawyer, I'm not an accountant, and I'm not an insurance professional.

Seriously. You do not want to get legal, accounting, or insurance advice from me! You need to talk to the professionals when you need that type of advice.

That's why February's action steps are focused on where to go to get specific information you'll need. Here's where you'll go in your community to learn how to start a craft business right:

  1. Visit Your Local Small Business Development Center - So you can get professional small business management advice from local experts.
  2. Contact Your Local Arts Association or Craft Guild - So you can find craft-specific business development information and connect with a network of local artists.
  3. Talk to Your Insurance Provider and Possibly an Accountant and a Lawyer - So you get accurate information from professionals if you need it.

1. Visit Your Local Small Business Development Center

The internet is a great source for a lot of information for small business owners. But there are some things that, in my opinion, are better done in person with experts who can ask questions about your specific business and who know your local resources and laws.

That's why you're going to pay a visit to your local business development center.

Get Down to Business:

1. Find your local small business development center: There are over 800 Small Business Development Centres in the United States. They are partnered with the U.S Small Business Administration. Experts in these offices will have answers to a lot of your questions about how to start a craft business. They'll probably even have answers to questions you didn't know you had to ask.

If you live outside of the U.S., there's a good chance you'll be able to find an equivalent organization in your country. Look for some type of small business association office, or perhaps a Chamber of Commerce.

If you can't find an appropriate office in your area:

  • contact a government office (they should be able to direct you to the right bureau)
  • ask at your local arts association (they may know, and you're going to contact them in the next step)
  • ask an entrepreneur in your area (they've probably already done this research)
  • or ask a librarian at your local library (librarians are information-finding experts and may be able to help you find the right organization)

2. Visit your local small business development center in person if possible: Don't just surf the organization's website. Call and make an appointment to meet with someone if at all possible. A face to face conversation with an expert can often uncover better and more thorough information that's more directed to your specific needs.

3. Make a list of questions to ask: Staff at your local small business development office can help with all kinds of concerns such as:

  • developing a craft business plan
  • banking, bookkeeping, accounting and taxes
  • other record keeping requirements
  • legal issues
  • marketing
  • choosing and registering your business name

They may offer access to a library of business-related books, workshops for small business owners, and market research information.

You probably won't be able to learn everything in one trip, so make a list of your most important concerns, and go into the office ready to make the most of your time.

4. On the day you visit the office, before you leave, ask if you missed anything important: When I'm speaking with an expert to learn about an important topic, near the end of the conversation, I like to say, "Is there anything I didn't ask that I should have asked?" Sometimes you just don't know what you don't know, and that question helps to bring out any important topics that you may not be aware of.

5. Make a list of the administrative tasks you need to complete: You'll probably come away from your research with a pile of jobs to do.

For example, you may need to:

  • register your business name
  • set up a bookkeeping system
  • open a business bank account
  • learn more about legal issues that impact your business
  • buy business insurance

Each person's to-do list will be a bit different based on the nature of your business and the regulations in your area. Making a clear list of tasks right after your meeting will help keep you organized and encourage you to get the work done.

6. Make a plan to tackle the jobs on your list: You may be able to do some tasks immediately, others may require a little more work or research. Don't let these jobs slip by - get them done as soon as you're able.

Bonus: Brainstorm Craft Business Names

You can do a lot of the initial work of brainstorming creative art business names yourself before you need to talk to the experts about doing a formal name search and registering your company name.

My 12-part series on how to name a business will help you find a business name you'll love!

2. Contact Your Local Arts Association or Craft Guild

Where a small business development office will be able to provide expert advice on running a business in general, your arts association or craft guild may have more targeted information about how to start a craft business specifically.

Get Down to Business:

7. Make a list of craft business-related topics you'd like help with: Arts associations often provide support for craft business owners such as: 

  • courses and workshops to build skills related to your craft
  • courses and workshops about how to start a craft business
  • networking and community building opportunities
  • discounts on business insurance, entry to local museums, and purchases from affiliated suppliers
  • information about safety and labeling requirements
  • advice about creating a studio space
  • access to space you can book to host arts-related events, exhibitions, or workshops

List the type of support that would most benefit your business.

8. Find your local arts or craft association: If you're in the U.S., the American Craft Council is a great place to start. They are a national-level organization, and they list state arts and crafts councils on their site.

There are all kinds of arts associations at local, state, and national levels. A thorough search will likely turn up several that are relevant to your business.

I'd suggest searching several combinations of terms:

  • Start with location: your country, state (or province), or city
  • Add the type of association you're looking for: art, craft, or your particular medium (i.e. potter, soaper, quilter)
  • Then add one of these terms: association, council, guild, or society

For example, if I were a potter who lived in San Antonio, Texas, I could search:

  • San Antonio potters guild
  • Texas potters guild
  • Texas craft association (I added -brewers to this search to exclude any results containing that word because I was getting a lot of results for "craft beer" associations)
  • American arts association
  • American arts council

All of those searches would give me different results for a variety of arts associations that could possibly provide information that's relevant to my business.

9. Choose an arts association (or two) that best meets your needs: You don't have to contact every single arts association you find.

Do a quick search:

  • find a few associations that look promising
  • scan their websites for services they provide
  • compare that information with the list you made detailing topics you'd like help with
  • determine which organization(s) would most likely have the type of resources you need.

For example, a local organization would provide more opportunities for you to connect in person with other artists. A guild that's specific to your type of craft would have craft-specific information such as product safety requirements for soapers.

You'll probably find a lot of relevant arts associations and craft guilds as you search. If you find a few that look interesting but aren't your top priority at the moment, save the links to those organizations for later. The services they offer might be more relevant to your needs in the future as your business grows. 

10. Contact, visit and / or join the most relevant and helpful association(s): If the membership fee is in your budget, consider joining the most relevant association(s) you find. Members typically get access to all kinds of resources that aren't available to non-members. 

If you choose a local organization, see if they have regular meetings and plan to attend. You can gain all kinds of information, enjoy networking opportunities and build relationships with like-minded people when you make personal connections with other artists in your community.

11. Make a list of any tasks you want to do with the help of your arts association: Remember that job list you made after visiting the small business association? That list is going to get longer. (yay!)

Take note of any courses, networking events, or other opportunities provided by your arts association that you want to take part in, and add them to your to-do list. Make a commitment to get them done.

3. Talk to Your Insurance Provider, and Possibly an Accountant and a Lawyer

Friendly reminder - I'm still not an insurance agent. I'm also not an accountant, and I am definitely not a lawyer. You must talk with the appropriate professional if you need this kind of advice.

If you have personal home insurance, and you're starting a business based in your home, your business activities might impact your personal home insurance. Your insurance professional will be able to provide the information you need on this front.

While your local small business development office will be able to provide plenty of information about bookkeeping, tax requirements, and business registration, depending on the nature of your business, you may need more specific, professional advice from an accountant or a lawyer.

Get Down to Business:

12. Determine whether your business activities will impact your existing insurance: Make an appointment to talk with your insurance agent, provide complete and accurate information about your planned business activities, and determine whether they would impact your existing policy. If they do, your agent will be able to give recommendations to protect your coverage.

Your insurance agent may also be able to provide appropriate business insurance. While you're there, you can ask about the types of business coverage they offer and request a quote.

Keep in mind, your existing insurance provider may be able to meet your business insurance needs at a price that is acceptable, but you may also want to check out other providers for business insurance.

13. Talk with an accountant if necessary: Once you talk with a professional at your local small business development center, you may determine you need more specific, professional help with financial matters involving your business.

If you don't already have an accountant, you can ask for recommendations from your small business development office and from other local business owners you know. When in doubt, it's better to ask for professional advice than risk problems that could arise if you skip this step.

14. Talk with a lawyer if necessary: Similarly, if you think you may need more professional help with legal matters involving your business talk with a lawyer. You can start your search for a lawyer who has the expertise you need by asking at your business development office and asking other local business owners who they would recommend.

15. Get it done! You've just finished a mountain of research. You've spoken with small business experts, experts in your local crafts scene, and insurance, financial and legal experts as needed.

At this point, you're an expert in starting a craft business. But you've probably come away from your conversations with a few tasks to complete.

Pull out that to-do list you started, and make sure it's complete. Prioritize the tasks, and set deadlines to get the work done. These are the kinds of jobs that can linger because other things feel more urgent. Don't let that happen. Make a commitment to get it done!

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