Thursday, April 16, 2015

Business V Hobby

busi·ness  (bzns)

1. an occupation, profession, or trade.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service.
4. volume of trade; patronage or custom.
5. a store, office, factory, etc., where commerce is carried on.
6. that with which a person is principally and seriously concerned: 

hob·by 1  (hb)
n. pl. hob·bies
An activity or interest pursued outside one's regular occupation and engaged in primarily for pleasure.

Most of us start our beading journey as youngsters making items for our school friends, or as adults, making things we would like to wear. Mostly with bounding enthusiasm and a lot of trepidation. Enthusiasm because we can create something from these little components and trepidation because of the uncertainty of what others will think of it, or if it will be strong enough when worn, among other reasons we may think of. 

We usually start out by creating simple items and often gift them to family and friends. As we become more confident with what we create, and delve into more complex pieces, our collection grows and we find it harder to part with pieces that have taken so much time and effort, used so many beads and materials, and has extracted some of our own essence into it.

We continue to learn new techniques, create more complex pieces, and before we know it, we have accumulated quite a collection. At this point we start to run out of storage space, and also of people we can gift to..... What now?

We have 2 options: 
*1 - Stop creating.... not really an option if you're a devout beader.

*2 - Start selling. Probably the better option because it will give us back some dollars to justify buying more beads..... LOL... how many of you have thought that?

OK... so where do we sell though? What do we sell? How many items do we need to display? Where will the people come from? How much do we charge? How do we set up? And the questions go on and on.

Firstly though, we need to decide whether we will be selling as a hobby or a business. This is an important decision, because it will determine how much effort and detail you need to go into. Sometimes it’s difficult to determine whether your activities constitute a hobby or a business. It’s important though, to understand and know the difference between the two because of the various tax, insurance, and legal implications.

What is the difference between a hobby and a business?

The easiest way to find out if you are running a business or a hobby is to ask yourself a few simple questions. Here’s a quick test:
  • Is the activity being undertaken for commercial reasons?
  • Do you have the purpose and prospect of making a profit?
  • Are you regularly and repetitively undertaking the activities?
  • Is your activity planned, organised and carried on in a business-like manner?
If you've answered yes to at least 2 of the above, then its most likely that you want to sell like a business. Later in this article, I'll outline some of the most important steps, that will make business life a little easier.

There are various ways to sell your jewellery. Party Plan, Consignment, Markets, Retail (bricks and mortar shop), and Retail (web based). In this article we will look at these in a little detail.

Party Plan:  The party plan is a direct sales method of marketing products through social events allowing you to start your own business for a very small investment. Party plan selling offers unlimited income potential and you can easily start part-time from your home without the risk of losing your present income. 

One of the easiest ways to start, is to host a jewellery party. Invite your family, friends, work colleagues, neighbours... anyone you wish to tell really.

Hosting parties like this is relatively easy and has no ongoing overheads, apart from the initial set up costs of display items such as busts, bracelet displays etc, and maybe some refreshments. You need to keep in mind though, that only doing it this way, will eventually exhaust your immediate market, unless you have a system in place where guests can book you for subsequent parties, inviting their social networks, and so on. Offering hostess incentives will almost guarantee future parties. 

Consignment: To sell your goods on consignment means that you get paid by the shop or gallery only upon the sale of your items - essentially, you retain ownership of your items until they sell, the store does not buy them outright. This is often the easiest way to get your products into a store and is a good first step if you're just starting out.
Consignment is beneficial for shop owners and designers alike: it allows shop owners to fill their shops with items at no upfront cost to them and lets them test out the saleability of your goods to their customers. For you, it's beneficial as you retain a higher percentage of the sales price on your items than you would selling via wholesale (or, you should!) while also testing your saleability in different markets, and getting exposure in retail shops.
You pay the shop a commission on the sale of your items, as they are working to help market, display and sell your items in the best way possible. You must be mindful though, to choose a store and its location, that suits your product, otherwise you'd be wasting your time and tying your stock up.

Galleries: Another way of giving yourself, your business and products exposure is to find galleries that have seasonal showings, and see if your product is in line with their artworks and vice versa. The general costs involved are relatively low - usually for the hire of the table. Most of these venues will take a commission of your sales, but generally it is a low cost, and very effective way of not only selling your product, but creating public awareness, and a following. I have been doing this type of show for a couple of years now, and find it very profitable. I am humbled that they ask me to be involved in their seasonal art shows.

Remember, it is still important that your customers experience the whole package though. When they go home to open their purchases, they should be reminded of how special they were made to feel, just by opening up their parcels.

Markets: Selling your wares at craft markets is completely brilliant... you are surrounded by handmade goodness all day, you chat to like-minded people, meet customers face to face and hopefully make a little money too. 
Every market is also about you advertising and marketing your business, getting your name and products in front of people's eyes. You never know who will pick up a business card and contact you later. Many shop-owners go to markets to seek out new and original wares for their store and may contact you about becoming a stockist. There's a lot more to your stall on market day than the sales you get. So when you don't think you've had a good day, count how many business cards have been taken.

Retail Sales (bricks and mortar):
If you want to enter the world of owning a shop, then this is for you. If you like the idea of having a shopfront where your customers come to you, and you have this face to face interaction, then this is perfect..... but it does have some drawbacks. Having the right customers who are cashed up and ready to spend in your store, is not always easy. There are overheads to meet, such as rent, electricity, wages, insurance... just to name a few. You have to make sure that the stock you carry suits the location of the shop or its demographic. You need to ensure that you display different stock regularly to keep prospective customers interested. You need to maintain marketing and advertising. 

If your shop is in a shopping center (mall), then there are the added costs that are determined by center management.

Retail Sales (Web Based): Selling online seems to be the way a lot of people and companies are doing business these days. Although there are a lot of benefits there are also some pitfalls that can consume your time and in some cases some funds. It is important though to analyse your business, to see if selling online could work for you.

Most people jump in feet first into an online selling avenue without doing too much research. Just because it's online, doesn't mean it will automatically work. You still have to research the market to see if your product will sell, and also to find out who else is selling a similar product. 

Four points to consider when starting your online store
  • Do your research. Make sure you know what you are getting yourself into and exactly what you want. 
  • Carry out an online transaction at a store that has inspired you, detail their pros and cons and pass on an even better experience to your customers.

  •  Have a marketing plan to get people to visit your site, whether it be new or current customers.

  • Make sure your website design matches what you are actually selling. 

Some of the many benefits to online selling:
  • Reduced overheads in general, as an online shop costs less to set up and run than a physical store, although it's important to recognize that making eCommerce work requires continuing investment, not only in upgrades but also in your time.
  • Lower marketing costs with better targeting: online promotion can be more precisely aimed at potential customers than using conventional media. It's also much cheaper, for example, to send a marketing message by e-mail to 1,000 customers than it is to send 1,000 newsletters by post.
  • Expanded geographical reach: a local business can become nationwide or even international, just through having an effective eCommerce strategy. 
  • Being open for business 24/7: with automated order and payment processing, sales can be made at any time, and customers can buy when it suits them.
  • Greater flexibility: an online store can be updated instantly and as often as you like, for example, to promote a 'deal of the day' on your front page, without the need for expensive printed display material.
  • Broader potential customer base: an eCommerce business is an additional buying channel, capable of attracting customers who have not bought before.
  • Improved customer profiling, with the opportunity to target products and services at specific groups based on buying data.
  • Increased visibility for your business: with investment in search engine optimisation and online promotion, an online shop becomes more accessible to customers searching for your products.
(Information readily available on the internet)

    Other avenues for selling online are sites like EBay, Etsy, MadeIT, Amazon, Artfire, to name a few. These sites are relatively easy to navigate and even easier to set up your online presence to start listing things. All you have to do is register your name or trading name with them (provided it hasn't already been used), and start uploading your product. Make sure though, that you have accurate descriptions and sizes, including postage. You will have to maintain this site as well.

    Stock Photo - my hobby. fotosearch 
- search stock 
photos, pictures, 
wall murals, images, 
and photo clipartHobby: If we decide that business is not for us... that's OK... business is not for everyone, and don't let anyone make you feel like you should be doing it.

    Creating for the sheer pleasure, or to gift, or to sometimes sell to recoup materials cost is very heart warming. It keeps our minds and hands active, and tends to connect us to many people around the world with a shared passion. Many friendships are made this way. Hobbyists still go through the learning curves of their art, just like someone in business. they just don't focus on the profit side.

    I have been asked on numerous occasions how I get my commissions and also the shows I do. One simple yet complex answer I guess..... You need to put yourself in the market place.... you need to show your wares to people who can either buy from you, or most importantly guide you to a selling venue. You need to create a following. You need to wear your own product, that way it evokes conversation from people you meet. You need to be prepared to donate items. You need to market yourself, your goods and your passion. You need to remain humble, because always talking about yourself doesn't make people want to be in your energy field. You need to learn to listen, for in listening will you understand what people are wanting, even if they don't say the words.

    I have had many students in my classes think that to market themselves, they just needed to advertise. Marketing is so much more than just advertising. It is one of the biggest players in this thing we call commerce. It is a branding. Whether it be online or bricks and mortar. Without marketing it would be an uphill battle and a very expensive one. Although you will have to invest time and also some dollars in marketing, it will almost guarantee you ongoing success, alongside hard work and tenacity. It is the promotion and selling of products or services which includes market research and advertising with a view of helping reach a wider customer base. It also involves the strategy to use in sales, communications and business development.

    You are building a brand and every contact must reinforce what you want to say about you, your business and its product. This includes everything from how you answer the phone to how you use promotional materials. Business owners who have little experience of marketing do not always take this broad a view of marketing.Typically they think that advertising equates to marketing. But it involves a whole lot more than that.

    If marketing is not your strong suit, find a small business coach that specialises in marketing. It's easy to learn about marketing from a book, but it takes years to master, so it may pay to initially invest in professional help. 

    This is by no means a conclusive body of information. I could sit and write more information for you, sadly space is limited. But I hope I have given you enough to enable you to research these components of business, as well as much more for yourself. To help you grow your businesses, and to become profitable. Whatever that may mean to you.

    And finally, however you wish to pursue your creative endeavors, remember one thing - enjoy it. Enjoy the process of learning and doing. You may not like it at the time, but learn to embrace it, because it will not only give you knowledge, but it will give you strength and freedom.

    Happy Beading!

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