Tales From The Disabled Crafter

 By Sarah Spratt of Spratt’s Designs

It’s a bit of an obvious title isn’t it but there is no point in hiding the fact, yes, I’m a crafter.  Oh, you meant the other, the disabled bit, well yeah I’m that too and together they can make a very interesting life for me, and I hope to tell you some of what goes on in my daily life and along the way introduce you to things that have helped or hindered me in the hope that you will find them useful.

Crafting became my work when ill health caused me to be medically retired at the age of forty.  Now I was left not able to work in employment but with a brain still active, I’d like to say fully functioning but I doubt anyone would believe me.  Well I needed to do something, and I have always crafted, so with encouragement what was a hobby making gifts for friends and family was launched to a wider audience.

Currently as I write this, I’m in a Hospital bed in a Specialist Unit in Salford where I have been for the last twelve weeks.  In truth it’s quite an inconvenience as it has taken me away from my crafting, well almost …

I never expected to continue work whilst an inpatient, or for that matter have the hospital actually be good for business.  Now, had my hospital stay been a bit more of a ‘routine’ elective surgery type, where I would have come in, had my operation and then gone home a few days after, I know this experience would never have occurred.  However there is some planning that I had done that could have been relevant for even a short stay.

Many Crafters use social media, and the Internet for business, be it complete sales or just advertising.  Yet we are mainly a sole trader, we are the designer, maker, secretary, accountant, advertising executive, shall I go on?  So when we can’t work we may have no one in place to pick up the pieces, putting ourselves at risk of damaging our business.  It may be as simple as not posting advertising as much and dropping off visibility, to not responding to a potential customer, losing a sale and perhaps your reputation you have worked hard to build.  It can be hard to let people in and be part of your business but it makes sense, you may end up in a situation where you end up in hospital tomorrow.  Myself, I have suffered from ill health for some time, after all it’s being disabled that got me into a crafting business, so I have been in this situation from the outset.  So what can you do?  Well in my case I have few people around me that help me out all the time, but at times like this when I’m in hospital they have stepped up to do more.  I have a good friend (who I actually met through social media), and she keeps an eye on my Facebook, Instagram and Etsy pages, she helps me out in general but has been there even more so all the time I’m in hospital.  We have a wonderful set of neighbours and one family have a spare key to the house and they take in deliveries.  Then there is my husband, not comfortable with my pages but is a second on them in case my friend needs to query anything.  He has processed orders that could be done, also I have taught him remotely how to complete some of my crafts that needed finishing at home,  He has been a great delivery man, bringing in crafts for me to make orders and then packaging them up and shipping them off.  Without them I couldn’t have done the orders I have in the time I’ve been in hospital, in addition they help me maintain my business when at home too.

So as you hear despite being in hospital I am still working.  Now don’t get me wrong there have been a couple of potential orders that would have required me to be at home to make, and which were impossible to remotely train my hubby to do on my behalf.  I found however, being honest with them and admitting I was in hospital meant that although I had to disappoint them I didn’t cause them to be dissatisfied in my service and therefore my business. 
One thing I didn’t expect from being in hospital was to actually grow sales.  But as I sat in my hospital bed finishing the hand painting on my Fairy Tea Light Lanterns and Jam Jars, Nurses and Patients would see what I was creating and then ask me to do them some.  From that they would ask me what else I did, and I could direct them to my website or Facebook page, and sales started to grow. 

As items were finished and waited to be collected others would see them and ask me to do creations for them.  In truth I’ve never been so busy.  Now this put challenges in my path to overcome, how to do the work, I started with taking orders with the plan to do them when I got home and send them out. 
I got a weekend leave and completed a lot of orders, it was then I realised that I couldn’t let them build up, and as I passed my initial discharge deadline I couldn’t offer a date.  So I sat down with Hubby and we worked out a way of him preparing some of my creations, and then the issue arose, how can I work on my designs on the PC I can hardly take my computer in and then if I was able to work on them in the hospital how could hubby access them to put them through the cutter?

Computers and access have come a long way in only a short time and storing and moving documents has become much easier.  It’s a great help to me that Hubby is an IT technician, but for those without that sort of access to hand there is great IT help in high street computer stores, but even the little local independent PC stores can have great knowledge.  Hubby dug out a laptop we inherited a while ago.  The Laptop wasn’t the fastest or newest, but it was more than suitable for what I needed to do.  He loaded on only the graphic programs that I would need.  Also a while back he had invested in a Terabyte (that’s big storage in my language) to run backup’s on a regular basis’s my PC. 

Now let’s stop and talk about Backup’s, if you don’t do it, you should be doing it.  Backing up your PC means if you were to lose the PC and you take it somewhere to be saved and they turn to you and say nothing can be retrieved, you then know that you can buy a new PC and pick up from where your last back up was recorded, without it you may just find yourself rocking and crying in a corner for all that work you have ever saved on your PC, accounts, photos, designs, articles, price lists and more.  Now these days hard drives have come right down in price and it won’t take you long to learn how to back up and you could even run one weekly.  OK Backup discussed.  But how does backup help me? My PC hadn’t died.  It helped because on a device really no bigger than my mobile phone sat a copy of all my work that was on my main PC, this meant that I could plug it into the laptop like you would a USB or CD and access all my documents, awesome. 

Next was the to-and-fro of a design from me creating it to hubby then cutting it, so that he could bring it back for me to unpick, before he brought in a prepped glass block for me to lay the vinyl on.  This was actually easy, I was already using an online storage system called Dropbox (there are others out there) to get designs to customers and printers, so we would fling the design in Dropbox at the hospital, hubby would pick it up at home and cut the vinyl, I could then archive the document off of Dropbox onto the hard drive so as not to use too much storage space on Dropbox.

OK so things are looking good but this meant one more thing I would need Internet access in the hospital.  Well here in Salford I was lucky they had free Wi-Fi access for the patients, it did however get overused at peak times and on occasion I needed something more. Hubby being technical had for a long time been renting (like you would a mobile phone) a Mi-Fi system, this gave us roaming Wi-Fi data on a monthly contract. Now we’ve used this for years, being able to use Facebook, email etc. when out and about, that in turn prevented us using our data up on our phones.  These Dongle devices (as they are called) have also come down in price, and in most places give good connection, so if you want to use a mobile credit card device or PayPal at a craft fair, a stronger connection can make it so much easier. So I was sorted I now had a strong connection to pass my documents back and forth.

So there it was, from my hospital bed and with the help of others I not only didn’t have to put up the closed sign while in hospital, and with still being in after 3 months it could have been fatal to the craft business and reputation I had built, but also I gained business from patients and nurses seeing me crafting from my Hospital Bed.

I’ll leave you with this idea, for those of you that are crafters  that do craft fairs etc.  Some hospitals have stalls in their main atriums every month or so, I remember Liverpool Women’s Hospital having some in their Main Entrance when I used to Teach. Now if I can do business from my hospital bed, I can imagine that booking one of these regular stalls at your local hospital if they run such things could be good business.

I hope you have enjoyed my ramblings; I’ll catch up with you again in another issue.

Saz

The Bean Counter - Cash is King - A Simple Cash Flow Forecast

by Guild Member Helen Gould BA (Hons) CIMA Dip MA

In this article, I will be guiding you through the concept of 'Cash is King' in the form of Cash Flow management for your craft business. Looking from the angle the day to day running of a small craft venture, whereby the majority of cash is handled by keeping a Petty Cash tin system and a Paypal business account has worked up until now (accounting term of Ready Money). What happens when you plan to expand and take your cottage craft industry up to the next level? You will be quick to discover that cash management is critical to maintain a healthy business. Poor cash management is possibly the largest reason as to why a business fails and yet with a little knowhow, it doesn't have to be that way.

As you are reading this article, you may be thinking I'm not an accountant, I just want to do what I do best and enjoy it. Well I am going to put you at ease because you do not have to;
●    Be amazing at Maths.
●    An accountant to use and understand a simple Cash Flow Statement.
●    Ask your accountant to do it for you.

So before we go in to the mechanics of how to manage your Cash Flow, I need to explain as to why it is such a critical issue to creating a successful craft business and that putting your head in the sand is not the way forward, when it comes to cash management.

What is a Cash Flow? Basically, it is cash in less cash out = net cash position of the business in a given month. From a craft stall holder perspective, it is the cash sales made from events in the month less stall fees and other costs like raw materials paid for in the same month. It is used for providing information of not only gross receipts and gross payments (of cash) that is received/paid in the month, but also to so future expectations of cash in against known payments to be made.

Why should you bother with a Cash Flow? It's a valuable tool that can warn you if you are going to have a squeeze on your 'Ready Cash' albeit from a down turn in Sales, the need to invest in new fixtures/equipment or an increase on the day to day running costs. It also demonstrates to a small business lender that you can control your business finances and plan for at least a year ahead.

So let's look at how a Cash Flow works by using an example to explain the mechanics behind this powerful business management tool. Gillian runs a small craft business making and selling jar candles through weekly craft fairs and her average sales takings are £300 a week. She has been building her cash reserve up and has £6,000 of Ready Cash to use. She has decided that it's time to expand her business and has seen an excellent opportunity of renting a shop for one quarter of a year, in a busy High Street. She decides that before signing a contract, she wants to plan out what her finances would look like over this three month period.

Gillian has researched what she believes her expenses will be for taking on a retail space for one quarter; Rent £4,500, Rates £800, Electricity £400, Water £100, Telephone/Internet (for a card machine) £300 and Waste Disposal £200. The next step is to lay out a simple Cash Flow and the best way to do this is to use Excel, as it's far easier to update as your situation changes. To guide you through this process, I have put the Excel row numbers and column letters in the illustrations so that you can follow the example for yourself when setting up your own Excel Cash Flow template. See  fig.1

 

Let's look at the Revenue section first as we know that Gillian has an average of £300 of sales per week. So £300 x 4 weeks will give a total of £1,200 per month. We can now put this information in to the Cash Flow as per Fig 2.

The next stage is to put in the expenses for the quarter. The shop rental is a payment that must be made in the first month and the remaining costs can be split over the three months. See Fig 3.

 Now for the last section of the Cash Flow, this is a little trickier at first, until you get a hang of the template. We know that Gillian has £6,000 in ready cash to start with and this will be her opening balance in cell D18. The movement figure (cell D19) relates to the cash in and out in the month and to work this out, we take the Total Revenue of £1,200 minus Total Expenses of £5,100 = -£3,900 see Fig 4.

The Closing Balance is worked out by taking the Opening Balance of £6,000 plus the movement figure of -£3,900 to give a Closing Balance figure of £2,100. See Fig 5.

The last part of this Cash Flow is to now calculate the opening, movement and closing for the remaining two months. The trick is to remember that your previous month's Closing Balance becomes the Opening Balance in the following month, see Fig 6.

The final illustration Fig. 7 shows Gillian's completed Cash Flow forecast and you can see that she is not going to re-coup enough money in this initial quarter to get her back to her starting position of £6,000. More importantly, she would not be able to extent her shop lease for another quarter as she does not have enough money to cover the following rental quarter.

In this article, I will be guiding you through the concept of 'Cash is King' in the form of Cash Flow management for your craft business. Looking from the angle the day to day running of a small craft venture, whereby the majority of cash is handled by keeping a Petty Cash tin system and a Paypal business account has worked up until now (accounting term of Ready Money). What happens when you plan to expand and take your cottage craft industry up to the next level? You will be quick to discover that cash management is critical to maintain a healthy business. Poor cash management is possibly the largest reason as to why a business fails and yet with a little knowhow, it doesn't have to be that way.

As you are reading this article, you may be thinking I'm not an accountant, I just want to do what I do best and enjoy it. Well I am going to put you at ease because you do not have to;
●    Be amazing at Maths.
●    An accountant to use and understand a simple Cash Flow Statement.
●    Ask your accountant to do it for you.

So before we go in to the mechanics of how to manage your Cash Flow, I need to explain as to why it is such a critical issue to creating a successful craft business and that putting your head in the sand is not the way forward, when it comes to cash management.

What is a Cash Flow? Basically, it is cash in less cash out = net cash position of the business in a given month. From a craft stall holder perspective, it is the cash sales made from events in the month less stall fees and other costs like raw materials paid for in the same month. It is used for providing information of not only gross receipts and gross payments (of cash) that is received/paid in the month, but also to so future expectations of cash in against known payments to be made.

Why should you bother with a Cash Flow? It's a valuable tool that can warn you if you are going to have a squeeze on your 'Ready Cash' albeit from a down turn in Sales, the need to invest in new fixtures/equipment or an increase on the day to day running costs. It also demonstrates to a small business lender that you can control your business finances and plan for at least a year ahead.

So let's look at how a Cash Flow works by using an example to explain the mechanics behind this powerful business management tool. Gillian runs a small craft business making and selling jar candles through weekly craft fairs and her average sales takings are £300 a week. She has been building her cash reserve up and has £6,000 of Ready Cash to use. She has decided that it's time to expand her business and has seen an excellent opportunity of renting a shop for one quarter of a year, in a busy High Street. She decides that before signing a contract, she wants to plan out what her finances would look like over this three month period.

Gillian has researched what she believes her expenses will be for taking on a retail space for one quarter; Rent £4,500, Rates £800, Electricity £400, Water £100, Telephone/Internet (for a card machine) £300 and Waste Disposal £200. The next step is to lay out a simple Cash Flow and the best way to do this is to use Excel, as it's far easier to update as your situation changes. To guide you through this process, I have put the Excel row numbers and column letters in the illustrations so that you can follow the example for yourself when setting up your own Excel Cash Flow template. See  fig.1

Let's look at the Revenue section first as we know that Gillian has an average of £300 of sales per week. So £300 x 4 weeks will give a total of £1,200 per month. We can now put this information in to the Cash Flow as per Fig 2.

The next stage is to put in the expenses for the quarter. The shop rental is a payment that must be made in the first month and the remaining costs can be split over the three months. See Fig 3.

Now for the last section of the Cash Flow, this is a little trickier at first, until you get a hang of the template. We know that Gillian has £6,000 in ready cash to start with and this will be her opening balance in cell D18. The movement figure (cell D19) relates to the cash in and out in the month and to work this out, we take the Total Revenue of £1,200 minus Total Expenses of £5,100 = -£3,900 see Fig 4.
 
The Closing Balance is worked out by taking the Opening Balance of £6,000 plus the movement figure of -£3,900 to give a Closing Balance figure of £2,100. See Fig 5.

The last part of this Cash Flow is to now calculate the opening, movement and closing for the remaining two months. The trick is to remember that your previous month's Closing Balance becomes the Opening Balance in the following month, see Fig 6.

The final illustration Fig. 7 shows Gillian's completed Cash Flow forecast and you can see that she is not going to re-coup enough money in this initial quarter to get her back to her starting position of £6,000. More importantly, she would not be able to extent her shop lease for another quarter as she does not have enough money to cover the following rental quarter.

Gillian can now either to take the chance and sign the shop lease agreement or to carry on as she is on the basis of the Cash Flow forecast. The key thing to remember is that nothing ever stays the same for long and situations change all the time. In the example, Gillian has assumed a static Sales Revenue over the three months and as you well know from your own craft business, this is never the case. But the whole point of this business management tool is that once you have taken the time to set the template up, you can change the Revenue and Expenses as and when it happens, thus, giving you a better financial control. After all, Cash is King, when it comes to planning out your business finances and by using a Cash Flow forecast to guide you through, you will never need to put your head in the sand again!

In the next issue, I will be looking at a 'Start up Budget', a focus on producing a simple Budget as part of the business planning process to use when speaking to a small business lender.


Do you have any accounting questions? Email us at the Guild and we will pass them on to Helen.
info@procraftersguild.com

Helen is a member of the PCG and you can visit her here
www.facebook.com/spacentralltd

Meet a Member - Tilly-Minx Vinage

I'm Annette from Tilly-Minx Vintage, I started my business in June 2013 so now approaching our three year anniversary. It's been a bumpy ride at times and we still have much to do but we're getting there. Today, I'd like to share with you a small part of our work this year.

Way back in August 2015 I attended a Google Digital Garage training  at the new Birmingham Library. Not knowing what to expect I was a little apprehensive but had a clear objective in mind..... how to improve my website!

The seminars were packed and it was definitely a case of information overload, especially with regards to the Google analytics but I came away with one loud message ringing in my head and that was to be very clear on the purpose of your website. Selling products? information? selling services? directing traffic? Sounds simple? Obvious? Yes, but it gave me a new perspective!

Our website, at the time was a shop, an unsuccessful shop. Don't get me wrong, I've been very busy but sales from the website could be counted on one hand. My light bulb moment at the Google Digital Garage was that my website needed to sell me and not my products.

Each of my bridal accessories are one-offs, made to order. I do have some ready made pieces but most of my work comes from commissions. So armed with this new perspective I went through the testimonials my clients had written and used their insight to turn my website on its head and focus on selling myself and my services.

A lot easier said than done as I'm not one who feels comfortable talking about myself! I was lucky enough to meet Torie Jochims, a copywriter in Colorado, in one of the many networking groups I get involved in. Collaborative projects were being discussed and Torie was looking for some case studies for her website http://www.wildsparkcreative.com/ so I jumped right in and asked for help.

Torie was able to really get under the skin of my business and through lots of really helpful questions, which really made me think, she understood what Tilly-Minx was about. I wanted my new website to be inspirational for brides-to-be to visit and see the potential and possibilities of commissioning a personal accessory. I wanted to have a focus on storytelling through; stories from other brides, the story of the making process and the story of a client's  own accessory. Starting with a vintage or family jewel and finishing with a very personal accessory and future heirloom. Past, present and future all in one accessory.

It's taken a long while but my new Tilly-Minx Vintage website is now live. It's a little too early to analyse the impact and delve into the analytics but I'm delighted that it is now a website I'm proud of, that reflects so much more about me and the core Tilly-Minx Vintage message. Having gone through the pain barrier of reflection and, in effect, starting a new website from scratch I'm much clearer on how to move forward and yes, there's loads more for me to do but now when I add to my website I reflect on whether it meets its core purpose.
The key learning for me in this process is:

• Use networks and reach out to others who can offer new perspectives and help.
• Don't be afraid to change what you're doing and turn things on its head. Use the insight of others, especially your customers to identify what's going well. 
• Go to free training either in person or online but have a clear objective of what you want from it and make a commitment to carry out one action point. Coming away with one idea is a great way to measure time well spent and helps see the wood from the trees.

If you're like me and don't like talking about yourself or need help with your key message consider a copywriter. I was so happy to find Torie and so impressed that she really understood our business.

We'd love to know what you think of our new website visit
www.tilly-minx vintage.co.uk and let us know.

Meet a Member - Uniquely Your Designs

"I design and make crocheted accessories & gifts.
 
From there I began writing down the patterns for others to use. I branched out into needle felting, creating pictures that became sewing accessories and making sculptures from wool. I also create handmade notebooks as I enjoy using them myself.

I have always loved art and words so began to put them together and turn them into word art. This grew and then I began to create word art shapes, pictures made from words, that can also be personalised. These are quite a challenge and I love to push the boundaries making more elaborate pictures"

https://twitter.com/UniquelyYourDes

www.facebook.com/UniquelyYourDesigns
https://twitter.com/UniquelyYourDes

Using Pinterest for your Business Part 2

ByGuild Member Diane Price from Adien Crafts

Following on from last month you will hopefully have set up your Business Pinterest account. Here are the next steps to follow.

A fact you might find interesting is that one of your Pins has a life 1600 times longer than a Facebook post! Your content can pop up in the Pinterest feed many months after you have posted it, this happens very often so it’s a great idea to get your Pins out there to be discovered well into the future.

Now that your account is set up, complete your profile on your Business Account.
●    Enter your Business name.
●    Upload your Logo or Headshot.
●    Fill in your Bio and make sure to include any key words that might be relevant in a search.
●    Add your location and your website details.

It’s a good idea to add a ‘Pin It’ browser button to your task bar to make it easy to pin not only your own website items but other great images etc you come across. Many sites such as Folksy and Etsy have a Pin It button on each item page which makes life easy. This link will take you to Pinterest with instructions how to add to your task bar, it’s very simple to do: https://about.pinterest.com/en/browser-button

You will see that your home page has a box with the words ‘Create a Board’ This is your invite to make your first board, and then as many boards as you like. You’ll find this will grow after time as you have more brilliant ideas for boards to create.  It’s a good idea to cover other interests with boards that will attract people to follow your account; they will then also get to see your item/sales pins in their news feed.

Some board ideas might be:

●    ( Your Shop Name ) for items you can upload with a link to your website/Folksy/Etsy etc
●    Inspiration Board
●    Sold Items by ( Your Shop Name )
●    Commission Items by ( Your Shop Name )
●    Tutorials
●    Colour Mood Boards

The Title of your boards is important when it comes to being found in Pinterest search, so take a few minutes to use keywords that you think people will be searching for. For example if you are setting up a board for your own shop add what you are making as well, e.g. Jewellery, Cards, Knitwear …

The list of boards is endless, maybe set up 8-10 to start off with.

So, we’ve opened your account, filled in your profile, added a Pin It button to your Task Bar and created some boards. Next time we’ll move onto filling these gorgeous boards as well as networking and joining group boards on Pinterest, plus the Analytics feature now available.

The Bean Counter - Improve your Profit Margins

by Guild Member Helen Gould BA (Hons) CIMA Dip MA

As a busy crafter, attention to detail and the pride given to creating a quality item is second to none and that is what your intended customer is looking for too. But your profit margins also deserve the same attention to detail, in order to maintain a healthy business that can continue on trading into the future (this is known as a ‘Going Concern’ in accountancy lingo). In the March 2016 issue of the PCG magazine, I took you through the steps of how to work out your profit margins and this month’s article is all about ways of improving your margins.
To be exact, the Gross Profit Margin is the key factor when it comes to improving the overall Net Profit of your business. Now this is not a one-time fix all solution, but rather an exercise that should be a part of an annual review as a way of keeping your profit margin healthy.

Here are four ways that you can improve your Gross Profit Margin, but before you rush off to apply all of the ideas at once, take the time to implement one change at a time as a way of testing and assessing the way in which your customers react. Incremental change is far better than rushing head first in to creating radical changes to your business, like a bull in a china shop!

1.    The Sales Price – Ask yourself, are you asking the right price for your craft creations in comparison to your closest competitors? Do not be afraid to put your prices up as your customers will not shy away from a higher price tag. Especially if they see that that standard of craftsmanship and materials used are of a very high quality.

2.    No Discounts – It’s true that everybody loves a discount, but it’s a killer to your profit margin and a short-term fix to attract customers. If you offer discounts at the moment, it’s time to stop. Short term you may lose a fickle few customers but you have to think long term. Let me put it another way, if you continually discount your prices by 10%, you will need a 25% increase in your sales, just to keep you in the same position as if you had not given the discount in the first place!

3.    Cost of Materials – Now this is a tricky aspect of cost control when it comes to being able to reduce the cost of making your product, without seeing a drop in the quality of the materials bought. Look at your supplier invoices for the raw materials bought, does the supplier offer better value if you order in a bigger quantity? Are there other suppliers that offer the same quality or slightly lower (taking care that the overall quality will not affect your finished item) for a better price?

4.    Reduce Wastage – Where possible, plan the use of your raw materials in order to minimise wastage on the production of your finished products. By being more efficient with the way in which you use your materials will mean that you can produce more goods to sell, thus, increasing your profit margins.

So that’s the key areas covered for the Gross Profit Margin, but what about the ‘Bottom Line’ aka the Net Profit Margin? Now this is the challenging aspect of business cost management because we are now looking at the operational costs of running the business. Having said that, it’s not an impossible task to reduce some costs in this area, for the small business owner. 

In the last issue, I used an example of operational costs for a craft business owner, Mary-Jo in relation to attending a craft fair and as a reminder, the costs are as follows;

Stall Fee            £15.00
Fuel                   £5.00
Refreshments    £3.00
Time at Fair       £15.00     (£3.00 x 5 hours) 
Total Operating Cost    £38.00
So what costs can we hope to reduce? The first step is to identify the cost types involved, which are in this case, Fixed and Variable. Fixed costs are costs which do not change, no matter how many sales you make and Variable costs are cost that change with the activity of the business. A simple table can be used to identify the above costs as follows;



Normally fixed costs cannot be changed and in this case the pitch fee is £15 but I have noticed an increase in cost saving savvy crafters, who have halved the cost of a pitch by buddying up with a fellow crafter to share the pitch. Now this can reduce your costs but it should be noted that it can reduce your ability to display the entire range of your goods for sale. The time spent at the fair is normally a set time (unless the organisers permit an early pack up) and therefore should be viewed as a fixed cost.
Variable costs on the other hand can be more controllable, and looking at the example, Mary-Jo expects to use £5 worth of fuel. But she can double check her route to see if there is a more fuel efficient way to/from the venue and to only carry the stock she needs for the day. She also expects to spend £3 on refreshments but by taking a flask and sandwiches, she can cut the cost out completely.

One key variable cost that should not be overlooked is the cost of Labour (Wages) to produce the goods. As sales increase, a smarter way of working needs to be found in order to keep costs down and at the same time, keep up with the demand. I’m not trying to be a kill joy here but if you look at how you produce your finished craft products, is there any stage in the production that mass make the components and therefore have a bit of buffer stock as work in progress? A key cost/time saver here is known as ‘Set Up Costs’ and as an example, when I am making my candles, I tend to mass produce the wick tabs by laying out all of the materials that I need. I then make the tabs for the current order and then over make to act as buffer stock for surprise orders.

Now you may be thinking that going over the expenses of the business to find potential cost savings is a real chore, in comparison to actually making your craft products. But it’s an essential part of business management if you want to increase the profit margins of your business.

In the next issue, ‘Cash is King’, a focus on producing a simple Cash Flow Forecast, which is a useful business planning tool.

Do you have any accounting questions? Email us at the Guild and we will pass them on to Helen.
info@procraftersguild.com

Helen is a member of the PCG and you can visit her here www.facebook.com/spacentralltd

A Beginners Guide to Pinterest - Part 1

ByGuild Member Diane Price from Adien Crafts

This article is aimed at Members who may not have joined Pinterest yet, or maybe you have a dormant account and aren’t quite sure what to do with it?

Pinterest began back in 2009 and quickly became a popular part of social networking. It began as a site where one could save or ‘pin’ favourite finds while browsing the Internet by creating mood boards, meaning you could refer back anytime and find everything in one place. Imagine your cork board on the kitchen wall where you might ‘pin’ favourite things, Pinterest is a virtual cork board!

Small businesses such as ours soon realised the potential for promoting their items on Pinterest as each item can be linked to your online shop. A click of the photo on Pinterest will bring potential new customers your way. The hard part as with all social networking is getting views for your pins!

Getting Started with a Pinterest Business Account

Pinterest has stated that anyone wishing to use the site for commercial purchases must do so through a Business Account with a verified website, many people are still using Pinterest for promoting via their personal accounts but strictly speaking this is against Pinterest T & C’s.

Go to https://business.pinterest.com and sign up for a free business account. If you currently have a personal account the link above will also enable you to convert to a business account. You may decide to open a Business Account alongside your personal one rather than converting, but you will start with nil followers and will need to build up an audience again.

Once your account is up and running you can create as many boards as you like, and move the boards around on your Pinterest page, you will have made a board for your own products, place this board as number one so if anyone browses your page that’s the first one they will see. The site will give you instructions how to add a ‘Pin It’ button to your tool bar so you can start building your board of products, if you are selling on Folksy or Etsy, there is a Pinterest button on your product page so that you can pin direct.


Group boards are an excellent way to become part of the Pinterest community. The Professional Crafters Guild has its own Pinterest group board, just request to be added to the group and you can then pin your products to the group collection.

Right, so we’ve only covered setting up your account and boards, and adding pins, next time we will move onto how to use Pinterest in detail and how to make the most of it for promoting your shop.

Data'l do it… (Data is precious…. Keep it safe!

By Guild Member Tim Bird from T2Kreations

Every small business owner has electronic data stored in more places than you could ever imagine, but very few realise the value of the data until it gets corrupted or accidentally erased.  Accounts information, quotations, artwork, templates, photos, catalogues, advertising… The list is endless, as is the effort required to re-create data when you loose it.

I expect, like many of us, you occasionally back up the files on your computer, but is your back up safe? Perhaps all your files are in the cloud and you think, they are safe. In reality, nothing is ever 100% safe, all we can do is take every reasonable step we can think of.
Do you have a local copy you can revert to if needed? What about a total loss situation, where your computer and everything on it is sucked into a freak black hole that appears unexpectedly in your living room (ok that's not going to happen… perhaps a fire or a flood is more realistic). Do you keep off site copies of your business critical files? Do you keep back ups of your websites, emails, cloud data etc?



You may think everything is safe on your laptop or desktop machine, but what if a virus infects your computer and you loose everything, it can happen to even the most cautious user, and you could be left without access to your business critical information when you need it.

Some people… People like me… Take things a little further, (I learnt the hard way!)  I send emails of critical files to myself to an address that stores files off site, my personal favourite is iCloud. I have been known to send really important files to myself a few times a day if I am working on them… This is a little over the top for most people, but I am rather OCD about these things…. Mainly because of a bad experience. Many years ago I was updating my personal website and when I browsed the server settings I noticed an account I did not think should be there, I thought to myself," that's not right"… So I did what every gun ho, would be IT expert would have done… I deleted the account, what harm could it do?…. The account was of course system critical and was created by the system when I created my website, it contained EVERYTHING… Files, configurations, photos the whole lot, and it was gone, gone forever. I did not have a back up. I had to start my website from scratch, 5 years of blog entries, pages and photos gone forever. This is why I am a little OCD about keeping my data safe. I have learnt a lot since that day, and I am now very careful with my data, and other people's data. I back up often. One of my day job responsibilities is to look after the data for a design company that works with internationally known brands, on site and off site data management, disaster recovery website management, if it’s IT related and goes wrong… its my fault. I am not an expert, it's a small company and we all wear many hats, I sometime make the tea and empty the bins.

I back my data up locally most days, I then back up these backups monthly, and add all of my website files and any other data that is kept remotely (Cloud storage, server files etc). It's a lot of data… The critical files I copy again and encrypt them, place them on a USB stick and ask a trusted family member to look after it, off site back ups are the key to disaster recovery and on site copies are kept in a safe.

The black hole scenario is not likely to happen to you… But if it did… How long would it take you to recover your data, what if it happened two hours before midnight on January 31st and you have not filed your tax return yet?

You do not need to go to the same levels as I go to, just make sure your data is safe, and know where your critical data is backed up so you can access it if you ever need to. But remember, any data you store remotely or secure with a password is only as safe as the password you use to protect it. Don't re-use passwords (not ever) one site, one password. If you can remember it, then the chances are someone can guess it, unless you follow some simple rules….

1. Keep it Loooooooong… Absolute minimum 10 characters.
2. Mix it up….. use a mixture of upper case lowercase, special characters and numbers, use numbers as letter… L0@k_ouT-4-W+yz-2-S3cure-1t#
3.  Never use memorable data such as names and dates.
4. NEVER write your passwords down.

I would recommend using a trusted password manager and 2 form factor authentication, you will then be able to have secure passwords for every website. Lastpass (https://lastpass.com) is my favourite, but there are many more.

While you are securing your passwords, don't forget your email passwords, these often get overlooked and forgotten, but if someone can guess your email email address password, they can potentially change it and then they can pretty much control every password that can be re-set via email verification, effectively locking you out of your own data.

Do you have an IT questions?
Email us at info@procraftersguild.com and we will pass it on to Tim.

Wedding Fairs - What to consider

By Guild Member Kirsty Dimond from K.D Jewellery

Wedding Fairs and Shows are a fantastic way for Brides and Grooms-to-be to meet a variety of wedding suppliers all under one roof! Much like a trade show or a business expo, vendors within the wedding industry attend these events to showcase the vast range of wares and services they can provide to potential clients on one of their most special days.

So, what's involved in exhibiting at one of these events? And how do you make sure it's a success for your small business? Let's take a look at what you should consider when deciding to book into a wedding event…

What to consider?
You will find that a vast majority of these events take place at hotels, or tourist attractions, that also cater to weddings themselves.  Often these are well known locations, which is great for footfall, and hosting the event also gives the venue the option to present itself as its own exhibit.

The first thing you should consider therefore is the location.  Is it local to you? If so, then you are likely to incur less travel costs as well as having a shorter travel time to the event itself.  Is the fair being held at a well-known location? Or is the location itself already a popular 'wedding spot'? If this is the case, you will find that a larger number of Brides already have this location on their wedding radar and, if it's in a popular area there is likely to be a higher footfall than a more rural or remote event which people would have to travel to.  If the event is an annual or well-established event, don't be afraid to ask the organisers whether there is usually good traffic.  Often the larger, more well-known, events will be the ones with the highest footfall on the day.

Another important detail you should consider is when the event is being held.  Weddings, like most fashion-based businesses, tend to have 'seasons' where higher numbers of couples will be getting started with their preparations.  According to a recent survey by popular wedding site 'Confetti' the traditional Spring/Summer weddings are now less popular with more and more Brides opting for Autumnal celebrations instead.  Popular proposal dates such as Christmas, New Year and Valentines combined with the average engagement length of approximately 18 months see the most popular dates being between July and September, with many being the latter or even extending into October.  With this being said, apparently, the majority of Wedding services within the UK are booked between September and February, making these the ideal months to exhibit at fairs and be noticed by searching couples.

You could also gain a lot of insight into how successful an event will be if you are able to find out whether the event is catering to a particular type of couple or a particular style of wedding.  For example, a niche event in an old fashioned stately home which is targeting couples who are looking at having a unique and possibly vintage-themed affair, may be an absolute dream for your product or service however, if you are a maker of more modern items which fit in with today's popular culture, then such an event may not be suited to you.

An important factor to consider when booking any event, be it wedding-related or otherwise, is the cost.  You need to consider not only the cost itself, but also what is included in that cost, as well as any hidden extras that may come to light.  You may find that the cost includes a stand of some sort or you may be paying for the exhibition space alone, in which case there may be additional costs for a table and chair (if bringing your own is not an option).  Electricity and Wi-Fi access (should you need them) are also often extra to the booking fee itself.  You should also factor in any travel costs you may incur and any promotional materials or display accessories you may need to properly present your business to potential clients.

Following on from this, you may wish to consider looking into ways in which you could reduce the cost of attending such an event, if possible.  Organisers that run these events in various locations throughout the year may have discounts available for booking in at more than one exhibition, essentially spreading the cost to you and allowing you to reach more people for your money.  Also, booking last minute or accepting cancellation spaces at shorter notice may mean than organisers are happy to negotiate somewhat on the booking fee in order to fill an empty space.  Another possibility, particularly useful to start-up businesses within the industry, would be to find out whether the organisers are happy for you to share an exhibition space with another business.  Perhaps you know someone else who is just starting out whose business would complement yours? Of course, this would be completely at the discretion of the organiser and may not always be allowed but it is definitely worth asking! Nothing ventured, nothing gained after all…

Depending on your speciality, there are so many young couples planning to tie the knot that there is bound to be plenty of business for everyone - especially in the handmade world - however, it is definitely still important to consider your competition at these types of events.  Take the time to research the other businesses that will be exhibiting at the event to determine whether there is space for you and your wares to be seen and to be noticed!  Similar businesses are fine - there is nothing wrong with a little healthy competition after all! - as long as you can find something to make yourself stand apart from the crowd.

One of the most important things you should consider when booking an event - again, this one applies to ANY event - is both the amount and the type of advertising that the organisers have lined up for the promotion of the event.  Even popular annual events with a known footfall will need to be advertised in order to bring in new clients.  Organisers should have all advertising bases covered including: posters, leaflets, banners, local newspapers and wedding publications, as well as online ads, blogs and plenty of social media coverage.  More and more couples are turning to the i
Internet for help with planning their weddings and support groups and forums on social media sites such as Facebook are fast becoming 'the place to be' for event promotion.  If an event is not well advertised, it is not likely to be well attended.

Promotion is KEY is getting your business 'out there'.  Everyone knows this.  So, another thing to find out about prior to an event is whether there are any opportunities for extra promotion for your business.  Are the organisers handing out goody bags at the event? If so, find out whether you are able to provide a sample or even have a business card or leaflet included (this may incur an additional cost though so definitely check first!).  Is there a fashion show taking place at the event? Could you perhaps offer to have one of your items either worn or carried, or included in some way? It may seem like such a small promotional step but, as they say, every little helps!


So, there you have it.  If the event, you have in mind ticks all the right boxes then go for it! Take a leap of faith and see where it gets you!  And don't forget to check out my top tips for exhibiting! 

The Bean Counter - Know your Profit Margins

by Guild Member Helen Gould BA (Hons) CIMA Dip MA

Love him or loathe him, Lord Sugar’s business acumen concerning ‘Smell what Sells’ and knowing your profit margins are the key to success, no matter the size of the business. All too often, the familiar statement said to me by my fellow craft fair stall holders is “well I’ve managed to cover my table fee today, so that’s ok”.  Clearly, there are many crafters that should pay attention to Lord Sugar’s no nonsense approach to gaining business acumen.

So you know what sells, but what about the profit margins? Well in fact there are three profit margins to think about, Gross, Mark-up and Net. Let’s look at the Gross profit margin first, with the aid of an example to explain the accounting concept.

Mary-Jo runs a small business selling handmade knitted lamb’s wool baby blankets that she sells for £15.00 per blanket. Each ball of wool costs £3.00 and Mary-Jo uses 2 and a half balls per blanket which is costed as £3.00 x 2.5 balls of wool used = £7.50 (known as the Cost of Sale). So to work out Mary-Jo’s Gross profit margin, the calculation is as follows;

Selling Price              £15.00
Less Cost of Sale       £7.50
Gross Profit Margin   £7.50

Great, Mary-Jo will make £7.50 gross profit for every blanket that she sells but this is just half of the activity behind making the sale. More often than not, the Mark-up % margin is often forgotten about and yet it is the key to knowing if you have not only covered your costs, but made an overall profit on the item that you have sold. Let’s look at the Mary-Jo’s business to see how the Mark-up % margin is calculated. Mary-Jo has timed herself as to how long it takes to knit one blanket, which is two hours and she knows that she cannot pay herself as per the living wage rate of £7.20 (as at 2016), so she has worked out that she can afford to pay herself £3.00 an hour and can now work out what is known as a Labour cost of producing each blanket. This is costed as £3 per hour x 2 hours taken to make the blanket = £6.00 Labour cost. Now we can work out Mary-Jo’s Mark-up % on the baby blanket. The first step in the calculation is as follows;

Gross Profit Margin        £7.50
Less Labour Cost            £6.00
Net Profit                        £1.50

So in order to find the Mark-up profit margin, the final calculation needs to be done as follows;
Net Profit £1.50 divided by Selling Price £15.00 = 0.10 x 100 = 10%
So Mary-Jo now has a true insight on the costs behind the production each blanket that she makes and this is a useful calculation to perform as the starting point to deciding whether or not the products that are made will generate enough Revenue (Sales) to cover all the costs of running the craft business.
At the beginning of this article, I mentioned that some craft stall holders are happy when they have just covered their table fee, but as the conversation develops, it becomes clearer to me that they have not taken in to consideration all of the costs of the day, that are referred to as operating costs of the business. We can use the Mary-Jo example to test how this actually works in the situation of table hire fees as follows;
Mary-Jo decides to take a local craft fair pitch at a cost of £15.00 for the day (4 hours exhibition time and 1 hour of setting up/packing away time). Mary-Jo pays herself a wage of £3.00 per hour, it will cost her £5 in fuel to get to and from the venue and she plans to spend £3.00 on refreshments for herself during the event. All of these costs are operating costs that will need to be charged to the business. In order to plan the day, Mary-Jo will need to set herself a sales target so that she will know when she has at least covered all of her costs from attending the event. An easy way of working out what the target should be is to lay the costs out first as follows;

Stall Fee                            £15.00
Fuel                                   £5.00
Refreshments                    £3.00
Time at Fair                      £15.00     (£3.00 x 5 hours) 
Total Operating Cost        £38.00

Now the Sales target can be set by dividing the operating cost and the net profit from the baby blanket. The calculation is as follows;
Total Operating Cost £38.00 divided by Net Profit £1.50 = 25.3 Rounded to 26 blankets
Mary-Jo will have to be very confident that the event will be well attended and that her selling face to face skills are strong in order to sell £390 worth of baby blankets to make that all important Net profit for the day, which would need to be;
Sales (Revenue)                      £390.00
Less Cost of Sale (26 units)    £195.00
Gross Profit                             £195.00
Less Expenses;
Labour Costs (26 Units)         £156.00
Operating Costs                      £38.00
Total Expenses                       £194.00
Net Profit                               £1.00


By understanding the Gross, Mark-up and Net profit margins of your craft business, you can then decide if the business stays as a second job/hobby. Or if it really can become your main dream job with the rewarding benefit of working for yourself and the luxury of planning when you work to create that all important work/life balance.


If you have any accounting queries please email us at info@procraftersguild.com and we will pass them onto Helen.


Helen is a member of the PCG and you can visit her here www.facebook.com/spacentralltd