It can be a daunting time when you decide to turn your craft hobby into a business and it’s often difficult to find the information you need to get started so the idea of our business tips posts are to help you find that information and give you some insights of how business works.
Over the years I have been involved, and indeed run, quite a few pages and groups on Facebook that deal with many different aspects of the crafting community from hobbyists to fully fledged businesses. This has allowed me to see things from lots of different angles and yet the same questions seem to pop up time and time again. So I decided to share some of the business tips I’ve come across to help answer some of those questions and clear up some of the confusion out there. In this post I’ll focus on making your business official.
I want to make it clear that I am a crafter and in no way claiming to be a business expert nor am I trading as a business advisor, however, Downland Crafts has now been running as a registered business for over 7 years and that means we have picked up a few things over the years that I am happy share with you. You should also note that we are based in Ireland so the knowledge we’ll be sharing will be in relation to businesses based in Ireland, I would imagine that a lot of countries will operate in a similar fashion but please check with your local authorities in case your requirements are slightly different from ours.
As soon as you start selling your makes you are legally required to register for tax regardless of whether this will be your main income or not. You will most likely be setting up as a sole trader which is a simple enough procedure by submitting a TR1 registration form and you can then submit your tax returns under self assessment each year. Visit http://www.revenue.ie/en/business/running/registering-tax.html#section1 to register your new business for tax. Registering for tax can scare many small scale crafters as they fear they will be hit with a big tax bill at the end of each year, this is not the case at all. The tax you will pay will reflect the sales you have made minus the expenses you have had, so if you made very little or even no profit you won’t have a large tax bill to pay. On the other hand if you get caught selling and not declaring your earnings you will be facing fines which are very likely to cost you more. I have heard all sorts of stories and misconceptions flying around social media but would always advise every crafter who sells their makes to register as soon as possible. Also consider that it is very difficult to make a living selling crafts if you are constantly hiding from the taxman, instead make it all above board then you can confidently advertise to promote yourself and your products online, in shops and at craft fairs.
There is lots helpful information to be found on the Citizens Information site including how to identify your own business type and plenty of links for more detailed information http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html
I would also advise that you register your business name with the Companies Registration Office or CRO, this can be done online very easily. Visit http://www.cro.ie/ena/business-registration.aspx to register your chosen business name, it costs €20 to do this electronically or €40 for a paper filing. By registering your business name you will legally be able to operate a business under a trading name that is different from your true name. Plus you will also receive a certificate with your business number and protect it from being registered in your country by anyone else. This is a must if you want to open trade accounts down the line with suppliers as you will often be asked for your business registration number. This is something we ask for ourselves from companies wishing to stock our stamps.
There are lots of enterprise initiatives available from local bodies. These can include financial support and funding options, education and training plus business information, so it is worth checking with your local authority as what grants and incentives are available in your area. You can find your local enterprise office on this website https://www.localenterprise.ie
Everything I know has been learnt as we went along and yes we made a few mistakes along the way as I’m sure you will too. A lot of what you will do in the beginning will be experimenting with different materials, methods of construction, advertising strategies and more until you find what works best for your particular niche of the craft market. Many crafts take a long time so finding a quicker way of producing them can make a huge difference to your pricing. Check out our Craft Business Tips category and for more information and a formula for pricing your handmade goods.
I hope you have found this post useful and if you have any questions, or something to add you are very welcome to comment below.
Until next time, happy crafting,
Trish xSHARE THIS