When you are just starting out with your handmade business that too as a side hustle, it is highly likely that you don’t want to invest much initially. Honestly, there is no harm in starting your handmade business on a budget. When I started out my handmade business, it was actually with a very decent investment of INR 2000 only since I was not sure if I want to take it up long term.
But here I am making 5 figure income every month from what started with such a small investment. Keep this in mind that it’s not always about the big numbers of investment that will help you start you handmade business. But, it’s all about how strategic and mindful you are of your decisions. Now, if you are a person who is more into watching videos to learn new things, then I have these tips covered in the video below.
But if you are more of a reading person (just like me :P), then continue reading this article as now I am to share 5 tips that can help you start the handmade business while keeping your initial investment low.
A very short disclaimer here: I have definitely increased the amount of investment in my business as my profits increased over the years. This article will help you to start with less investment, but to expand further you will require further investments depending on your profits (more coming on this in the article below).
And now we are heading towards my 5 very important tips to help you start your handmade business on a budget!
Tip #1: Enjoy the availability of free services
The internet is full of some amazing tools and resources that can help you in not just getting started with your business but also giving it a professional look. And trust me you can easily find so many tools that are easy to use and give you amazing results that too for free. When you are able to find some great free alternatives, a lot of your initial expenses are cut down and your investment budget is reduced.
Some of my go-to free tools for my business are:
- Google Drive
- Business Suite
Apart from this you can also decide if you want to go for a paid website or not initially. For me Instagram and Facebook are my two top platforms (which of course are free to use) in terms of sales. Apart from this, Instamojo is a great platform that help you set up an e-commerce platform for free.
Tip #2: DIY approach to the rescue
DIYs are definitely always knows for their budget friendliness and this approach can actually help you save quite some money when you are starting out with your business. There are multiple things that you can initially do on your own, like, logo designing, website development, content curation and editing and so on.
Now definitely you need to understand that their might be few things that are not your cup of tea and you should get them done outsourced. But if you are on a low budget, always see what are the activities that you can take up on your own and save those bucks to invest in something that you cannot pull off on your own.
Once you have started making profits and have financial capacity, you must start hiring professionals to help you create and manage a brand for you.
Tip #3: Price appropriately
We all are aware that when we charge for handmade products, we are not just taking cost of raw materials into consideration, but other costs like labor, time, R&D and logistics. But apart from that your pricing strategy also plays a big role because if you are able to make good profits, you are able to reinvest them in your business easily.
Now, let’s discuss a bit briefly about the disclaimer that I mentioned above. Another positive effect of generating more profits is that it gives you the bandwidth of investing in better and superior tools as well as resources. Always ensure that when you start making profits you set aside a percentage of it and reinvest that in your business.
And the most important thing here is to get your pricing strategy right. It may take some time but you should ensure that you have a sound pricing strategy in place for your business. Also, I have discussed about some of the costing mistakes that you should ignore in an earlier article and you can read that here.
Tip #4: Take advance payments
When you start your business, try to take as many orders with advance payment as you can. Advance payment is not only important to provide you the security in case of any cancellations but also helps you in paying for the raw materials without extra investment. When you already have cash in hand from the customer directly, you don’t need to invest a lot from your own pocket.
For example, you get INR 700 from your customer for a particular order and you need to invest INR 300 in raw materials for the same. If you don’t take any advance you have to invest from your pocket and it increases your investment budget. Now if you have taken an advance you can easily use that money for investment and nothing goes from your pocket.
I always make sure to take advance payments as it helps me in recovering most of my costs in case someone cancels or returns the product at end moment.
Tip #5: Don’t compare yourselves with others
The biggest mistake that leads to people spending more than what is required is when they compare themselves with others. Initially you may not need every fancy tool or equipment that is available out there for the crafters or artists especially if you don’t have huge budgets. Yes, tools and equipment reduce your time of making and manual efforts but you need to see are they really required during the initial months of your business.
A lot of times people buy a certain tool just because someone they look up to has that product. But you need to ask yourself is that tool and equipment actually that necessary at that point of time.
Maybe the person you look up to has a different way of working and needs that particular thing, maybe they have bigger budgets than you, maybe they have more orders to process and it reduces their labor cost. But you need to say are all those things same for you. You need to judge whether you need a thing or you just want it.
I hope you have got some things to keep in mind that can help you reduce your initial investment to start your handmade product business. If you want some more tips on how you can start your handmade business on a budget, I would recommend you check this blog post of mine as well.
Ps. Do share if you know about any other ways that helped you keep your investments in check in the comments section below. I would love to hear your take on this.