Bookkeeping for Crafters

Lesson 21 of 33

Product Choices and Marketing Spheres

 

Bookkeeping for Crafters

Lesson 21 of 33

Product Choices and Marketing Spheres

 

Lesson Info

Product Choices and Marketing Spheres

I want to show you another example of uh a plush artist who went a different route so this is abby if you'll remember from yesterday um she's one of those heroes that I mentioned who publishes all of her finances online and this is from her fourth quarter revenue report for two thousand fourteen I can't we should put this up already um this turn is only too she put this chart together from just like in two weeks less than two weeks so impressed uh she's also a plush designer but take a look at where her income comes from it's hard to see the numbers are a little bit small but that huge piece of the pie that fifty eight percent on the right there that's from patterns so more than half almost two thirds of her income comes from digital products comes from the patterns that she has developed for her plush if you look at finished goods that's that purple section that's actual plush toys that she's made by hand in her studio and then sells to customers that's four percent only four percent ...

of her income comes from those finished goods she's still a plush designer but like many people uh we figured out she has figured out that it's extremely difficult to make a living sewing everything by hand putting it together and then uh selling in a line or a craft fairs and making any kind of a profit there um he books is another nineteen percent so another fifth of her profit comes again from digital products this time it's books about either how to so plush how to design plush um I believe she has one about her business as well about running a creative business sixteen percent resale so she purchases things like plush making tools uh safety eyes and then resells them on her web site to people who want to get all of the materials that they need to make her projects in one place so if people don't want to to go out and final where do I get safety eyes where do I get you know this kind of thread where do I get this you know um they're called hemostat these clips scissors to hold things in place uh they don't have to look anywhere else they just buy it all from her and she resells them and makes profit off of that then you got those four percent for finished goods and then she's got teaching um reimbursements royalties from books that she's written in the past um and that makes up that other small little percentage so you can be a plush designer you can make plus you can sew things and she's figured out a really nice way to do this she doesn't so the same ham a a thousand times in her closet making no money and then expect that somehow to equal business right um she gets to make all different toys hundreds of different kinds of toys. She gets to spend the time doing the part that she really loves, which is actually designing those patterns and figuring out new ways to make things, and then sharing those patterns as a product and that's how she makes her income. So even as a plus designer, there are a million ways to go right? You can make I've counted four so far, you can make everything yourself and go the high end market route. You can hire production, help and invest in equipment that makes the equipment that makes the process go faster. You can outsource everything and have your plush manufactured and just be the designer, or you can focus on digital products like patterns. You could even dio non digital products like kits, things that are easier and less expensive to put together, but that still can command a decent price and get you some, uh, get you some income, some profit. So I'm gonna stop talking for a minute. I'll let you guys digest, um, and let me know if you have any questions. I'm sure that some questions have bubbled up online and in the chat rooms by now, because I've just been going crazy through this segment, um, I love it so much, though this is I mean this is really the meat of it all yes di um small question I noticed that abby uses word revenue and you used the word income is there difference between those two terms air they interchangeable? Good question no, there is not okay they're the same income in revenue were the same. We have a question life from theresa tron who's asking lauren when you just well what stage of your business did you decide the outsourcing would be realistic did you find that you were having a certain amount of orders or revenue come in which made that investment makes sense oh and now I'm gonna pull back the curtain and tell you another terrible story. Um this is great uh not really I was still in that mind set of like okay, if I if I really worked hard on this uh I could make a ton of money and I was at that two thousand six stage uh where I figured out that I need to do the bookkeeping I need to know what the numbers are and I sat down and I wrote a business plan um which I highly highly highly encourage if you are serious about starting our business you should really put together a business plan not just with these numbers but also with your marketing plan right what's your plan of attack going to be there uh, knowing who your customers are um and that all of that will change our business plan is a living document that's not to say that when you write it um that's it it's set in stone and you have to follow that you can update it and revise and you should update and revise it as your business takes off and you start figuring those things out more for yourself um and so I had a plan for how many of these I was going to sell per month. I'd broken it down well, if I say you know, if I sell three hundred of these per month um realistically I can expect that to come from x number of retailers, so that means I need to get myself x number of wholesale accounts you know, set that up. Plus, you know, this many is how many I'll expect to sell online. Um and so I went over to score, which is the service corps of retired executives? It's a really great nonprofit they fabulous online resource is um and they also have like the name implies, retired executives who will meet with you they have centres it's all over the country. Um I don't know if they also have any internationally but um where you can go in and you can meet with someone who ran a successful business and is now retired and we'll give you advice really problem with this is the word retired right? These folks for the most part uh ran businesses many many years ago and the closest advisor they could find to speak with me was an elderly gentleman who had been in the new york garment industry uh you know, decades before and so he said, well what do you need to do if you're going to get a wholesale accounts is you have to do a trade shows this is no way around it I'm sorry but that's what you have to do and then you collect your orders and then you'll know how much you need to manufacture and you can go ahead and you can use that money you get the things made and then you deliver the orders and that's how it works okay, fine. So I had some money saved um from my teaching job and I looked around at all the different trade shows and the one that was most affordable to me was the california gift show down in l a I could drive down there with all of my supplies and with all of my booth material so that really cut down on the shipping and everything um and if you've ever done a trade show those things are a fortune you will know uh the booth fee is thousands of dollars and then you end up paying hundreds of dollars for every little addition do you want walls that's hundreds of dollars for your booth. Do you want carpeting? Hundreds of dollars? Do you want a fish bull to collect business cards in fifty dollars? Like just to rent a fish bowl for three days is like that? I mean, it's such a racket. I can't even tell you, um and so the cost of shipping stuff there is a fortune. And anyway, um, so this was the most affordable one that I could think to do, and I think it ultimately cost me around four thousand dollars in the travel the hope tell the booth fi, um, putting together my display the whole nine yards, I can't remember if it was three or four days that I did the show, but I was really amped to go down there. I got an e book about sales, a book on tape, about sales, and I played it in the car all the way down there, right? And it was like how to close the deal, you know? And I'm listening to all this yet I'm really gonna do this is gonna be amazing when I land all these wholesale accounts, they're gonna be big orders of jazz and ready to do this, I'm pumped, you know, I've got a six hour drive I've got this guy, you know? The wolf of wall street like jabbering in my ear all the way down it's like always be closing you know and I'm like yeah, I'm always going to be closing get there and I set up shop and I meet on my other uh jason booth mates and I'm like okay ready to go I've got my sweetmeats delhi apron on with the logo on the front I've got my fake uh deli case out front that has the meats displayed and I've got my line sheets on taba get my order forms on tap there and the business cards even brought down one of my own armchairs and like styled it with the sweetmeats pillow so that people could like take a rest and see what it's like to have one of these in their home right sweetmeats in context I had my display shelves um I was feeling great and, uh I got not one order not one the whole time, not a single one uh and by the end of I don't know the third the third day maybe I was in my hotel room um watching the amazing race because that's what was on and um there was like, one semi emotional moment with this guy and his daughter and I lost it I just burst into tears, I I had a total nervous breakdown in this like wonderfully soft hotel bed uh I mean it was like, you know, huge ugly claire danes sobbing right like just I mean, all of a sudden all of these ideas came rushing at me like you just spend your life savings on a full container of life novelty meet shaped pillows that air coming over on a boat to you in like two months and you have nowhere to sell them like you're going not only did you pay for all these things and spent all of your money tohave these manufactured but ah not only are you not going to sell any and make that money back but now you're gonna have to pay for warehousing for like a full truckload I'm talking one of those eighteen wheelers you know, one of those container ah full one of these of meat shape was um what was I thinking what have I done with my life? What if I did why didn't anybody stop me and tell me this is a terrible idea? I just lost it like probably for a good week after that I was one of those like two press people like I never got out of my pajamas I was just shuffling around the house you know like eating junky food not showering, not brushing my teeth I don't care why don't even bother why bother living? I have no money I have no job and no prospects my business is in the toilet uh and then after a week I got a good night's sleep in a shower and I thought okay, hacking a trip away this a little bit of a time took a big tote bag put one of each of my meats and I thought to myself well wear in my neighborhood or here in san francisco would they like to buy one of these and I just walked into stores I started walking the stores where I thought I could see where I could picture these sweetmeats sitting on the shelves and I asked who does your buying here? And I set up a meeting or talk to the buyer if they were already there um and little by little I got accounts they were all local to me because that's where I could go I didn't have a sales rep trade show was a bust um and there are plenty of stores who said well, I don't think that really fits with our aesthetic or a collection or the price point is too high um but thank you anyway and okay, I moved on and then there were other stores where people lost their minds over them um and I learned so much about my market doing this because when I wrote my business plan I thought okay they'll mostly be in uh, toy stores and um home deck stores because I had the pillow size ones to not at all pet stores went crazy for these things they use the big pillows as dog beds for small dogs um the pork chop pillows people use them as nursing pillows for babies comic book stores which also had lee no designer toys like the designer vinyl loved these things they sold like gangbusters in those and I never would have known any of that if I had not just put the tote bag over my shoulder and gone you know door to door and started finding out do you want these will they sell here um and once I have them in a bunch of local stores they started getting picked up a little bit by press and then stores outside of san francisco wanted to carry them because they saw them um and it grew slowly little by little until you know around two thousand nine two thousand ten I had dozens of accounts all over the world in europe in australia in russia in canada and the u s and it was great um I found my distributor during that time it turned out that his girlfriend collected uh plush toys shaped like food she actually has its amazing she has an entire refrigerator it's not plugged in obviously where that's full of plush food and everything is in its place there's like plush lettuce in the vegetable drawer there's little plush eggs she's twelve of them in the like egg container is fantastic but I got this retail ordered for one of everything it was a pretty big order so I thought to myself well who who wanted to buy one of everything and I looked I saw the e mail address you know was this guy's you know, toy company dot com and so I looked it up lo and behold he's, a distributor for indie toy companies in l a so I e mailed him and I said, you know, thanks for your order and also if you're interested in distributing these like, let me know and he said, yeah, I'll totally take these so now I don't have warehousing costs anymore now this guy is storing all of my stuff and I'm not losing money every month that I don't sell three hundred of them right? And he also already has a network of buyers who check in with him periodically to see what kind of new stuff do you have in stock so they got into more stores that way um so in that way I got kind of lucky, right? Um the whole trade show thing was a terrible idea and I probably should not have had you know, eighteen hundred of these manufactured at once either that was probably also not a great idea um but after I picked myself up and put myself together, I was able to turn that back into a profitable business um which is just the long way around, of saying that there are, you know, lots of different ways to become profitable.

Class Description

It is common to be intimidated by math and money, but managing your business’s finances doesn’t have to feel overwhelming. Bookkeeping for Crafters with Lauren Venell will give you the confidence and skills you need to start and maintain your own small business ledger.

Lauren is an artist and educator committed to making financial solvency accessible to independent entrepreneurs. In Bookkeeping for Crafters you’ll learn the basics of managing your money and how doing it yourself can reveal important opportunities for your business.

You’ll learn about managing different types of income and expense accounts and how to painlessly prepare for tax time. Lauren will make predicting fluctuations in your cash flow straightforward and easy while helping you develop a system that is right for you – even if you prefer pen and paper over spreadsheets.

If you are ready to change your relationship to money and manage a ledger that is customized to the way you do business – this is the class for you.

Be sure to check out Lauren's other course Bookkeeping for Etsy Sellers.

Reviews

Aleks
 

There is so much fantastic information in this course that I had to purchase it even though I watched the free broadcast. It's real hands-on stuff, not a general description of what bookkeeping might be, but an actual guide to manage your business' finances. Thank you for all the insights and workbooks! I highly recommend this class.

Bekah Kitterman
 

Months after watching the live broadcast of this course, I am still so glad I bought it. I find myself coming back to it over and over again just to refresh my brain on how to manage all of my numbers. I'm new at having a business and doing my own bookkeeping, and this course has been extremely helpful as a tool to help me set things up well and keep me on track. Highly recommend especially for those new to business and bookkeeping or intimidated by taking care of your numbers!

Carla Sam
 

Wow, this course was jam packed full of insightful information (not just about book keeping!). Lauren was great at simplifying the process! Even though I watched most of the 2 days free broadcast, it was a wise investment to purchase the course and now I can re-watch at my leisure and fully take it all in. Thanks Lauren! :D