Etsy-preneurship

Everything You Need to Know to Turn Your Handmade Hobby into a Thriving Business

Jason Malinak

• Publisher: Wiley
• Year: 2012
• ISBN:
  9781118461730
• Edition: 1
• Topic: Commerce
• Subtopic: Activité entrepreneuriale

Turn your handmade hobby into a thriving business

Most Etsy sellers are confident in their crafting and artistic capabilities. However, many need guidance on the business-related intricacies of starting and maintaining a successful Etsy business. Etsy-preneurship helps existing and potential Etsy sellers understand the business fundamentals needed to become a small business owner on Etsy, including taxes, bookkeeping, marketing, finances, administrative tasks, daily operations, legal requirements, business plans, and improving your business skills. This book will help you make the jump from enjoying your handmade/craft/art hobby to running a profitable business.

• Etsy-preneurship offers step-by-step advice on what it takes to bring in extra income or even one day run a full-time business on Etsy
• Outlines the basic business skills and knowledge you need to run a business on Etsy
• Explains how Etsy makes entrepreneurship attainable for everyone

Each chapter even includes a downloadable business spreadsheet tool to help you put the steps into action. This book empowers Etsy sellers to turn their handmade hobby into a thriving business by employing foundational business concepts.

Chapter 1

Etsy + Entrepreneurship = Etsy-preneurship

The World of Etsy

Etsy.com is a place where e-commerce has a heart. Since 2005, Etsy has been, and continues to be, the place to buy and sell handmade, vintage, and craft supplies. It is a community of commerce—crafters, artists, entrepreneurship, hipsters, nerds, moms, dads, grandmas, grandpas, kids, and collectives all call Etsy their home. Etsy is where creativity and commerce are linked together, and opportunities for businesses are ripe!

According to its website, Etsy’s mission statement is “ . . . to empower people to change the way the global economy works. We see a world in which very-very small businesses have much-much more sway in shaping the economy, local living economies are thriving everywhere, and people value authorship and provenance as much as price and convenience. We are bringing heart to commerce and making the world more fair, more sustainable, and more fun.”

I personally know the power that Etsy brings to individuals who call Etsy their virtual storefront. Etsy provides freedom to succeed or fail in a business venture without breaking the bank. Crafters used to rely only on craft shows and boutiques to sell their products; while these are still important sales diversification revenue streams, Etsy opens the door to building something better. Etsy gives you a way to make sales around the world, build your business brand, and do it in a safe and encouraging environment. Selling on Etsy usually starts as a microbusiness, but can quickly grow into something more.

Etsy is booming! In just the one month of December 2011, more than 3.3 million items were sold on Etsy—with a value of $69.8 million! In that month, about 789,000 new members joined Etsy. The worldwide economy is hungry for commerce that is different. People are tired of giving gifts that are corporate-cookie-cutter look-alikes. Handmade and vintage is unique, original, and memorable. Behind every handmade and vintage item is a person—a person with passion and a story—not assembly lines, manufacturers, or corporate identities.

Etsy’s popularity is not slowing down. If you are or plan to be an Etsy seller, now is the time to claim your percentage of this market share. Creativity and quality are rewarded with success. Thousands of unclaimed craft and vintage niches are waiting for sellers to control, but creativity, crafting ability, and passion take you only so far—to be a lasting success, an Etsy seller must have a solid business foundation. Without a strong entrepreneurial foundation, Etsy businesses are not sustainable.

Entrepreneurship Is for You

Starting a business is not only for those individuals who have an MBA, hang out with venture capitalists, or are extreme risk takers. I firmly believe that most people should be small business owners at some point in their lives! Every person has creativity and untapped potential to make the world a better place through their respective businesses. In fact, I believe every person has a role in the global economy’s future success by starting and running his or her own small business.

Starting and running your own business is an exciting adventure—it shows your passion. Etsy sellers start their businesses for a variety of reasons, including:

• The need for a productive and creative crafting outlet
• To make additional money to pay off debt, save for a vacation, or achieve other financial goals
• To take the first step toward quitting their day job
• To work for themselves
• Because they love buying things on Etsy and think they can sell, too!

There are just as many reasons for starting an Etsy business as there are Etsy sellers. No matter what your reasons are, I’m here to tell you, “Go for it! You can do it!” I’ve helped thousands of sellers start legal, legitimate, and sustainable businesses on Etsy, and I’m going to help you do it, too. Starting and running a business can be a little intimidating, but the way to overcome this fear is with the proper knowledge, tools, and guidance. I take great joy in empowering others to create businesses that are sustainable, thriving, and provide joy for years to come. I will teach you the art and science of Etsy-preneurship!

Etsy-preneurship Defined

Etsy + entrepreneurship = Etsy-preneurship. This is the formula for the operational success of your business. Etsy-preneurship is the adventure you are about to embark on or are currently embracing.

Since 2007, I’ve been in conversation with every type of Etsy seller that seems to exist, selling everything imaginable, all unique and different. Not so unique are the business-related questions I am asked. Most Etsy sellers have the crafting side of their business down well. I am always amazed at the new items I see for sale on Etsy! You already have the “Etsy” part of the formula—amazing crafting, artistic, and design skills. Of course, there are components to this side of your business that you may want to improve on. If you are like most Etsy sellers, you are more confident in your crafting abilities than in your business skills.

The “Entrepreneurship” part of this formula includes the business foundations that make your creations soar! Over the years, through hearing and answering thousands of Etsy sellers’ business-related questions, I know what it takes to build a successful business on Etsy. I have created a model, or method, on which businesses can thrive! My motto has always been, “Helping your Etsy shop thrive!” I want to help your business thrive!

The Etsy-preneurship Model

The Etsy-preneurship model will help your Etsy shop thrive! The following topics will help you build a firm business foundation, which will create success for you and your business. Tips and tricks are helpful, but a rock-solid foundation will help you build a business that will last. Each chapter of the remainder of this book corresponds to the following Etsy-preneurship model.

Creating a Business Plan

If you do not have an initial business plan, you are setting yourself up to fail. A business plan gives you a fighting chance at success. Planning in your head is not good enough. The process of putting it into written words really does make a difference, because it often shows so-called good ideas to be impractical and helps develop weak ideas into blockbusters of success.

Bookkeeping

The first time you spend or receive your money related to your business, a transaction has occurred and the need for bookkeeping has begun. Etsy sellers who sweep this administrative task under the rug to worry about later are asking for trouble. Good, simple, and practical bookkeeping systems help Etsy sellers are able to better price their products, make smarter business decisions, and meet tax obligations that all Etsy sellers face.

Taxes

Death and taxes—you know the spiel! All Etsy sellers have tax obligations, even if they consider their business a hobby! The tax law may seem confusing, but it is manageable in bite-sized pieces. I will help you cut through to the parts that impact most Etsy sellers and explain the tax code in everyday language. As a CPA, the tax code is something I read regularly. It isn’t always fun, but it is necessary. Having a basic understanding of the tax laws that face your business will make you feel more confident, especially when an IRS agent is sitting across from you asking about your Etsy business during an audit!

Finances

Running a successful business is dependent upon making good financial decisions. The way you manage your cash, bank accounts, PayPal account, and budgeting is just as important as performing your craft with great skill. I will reveal financial tips to help your business thrive, as well as the financial nightmares that you can easily avoid with a little foresight.

Legal

There is only one way to run your Etsy business—legally! Knowing the law gives you confidence to run a business well. There are legal implications regarding how you form your business, contracts you enter, and business insurance. Intellectual property (copyrights, trademarks, patents) are a hot topic for Etsy sellers. The law protects you, your business, and your creations. Legal knowledge empowers you and your business.

Operations

Operations are the day-to-day activities that make up your business. Consistency and standards are your friends when dealing with shipping, producing your products, photographing your products, managing your Etsy shop, managing your inventory, scheduling, and more. Solid operations set clear expectations for you and your customers to rely on. Stable operations that are sustainable will help prevent you and your business from burning out.

Marketing

Just because you list your product on Etsy does not mean it will automatically sell. Sometimes this happens, but it is not the norm. Marketing is where creativity gets to shine, but without the proper marketing framework and disciplines, your business will be all over the place and without focus. Marketing is an art that requires a little science to make its impact most effective.

Etsy Community: 40 Etsy Tips, Tricks, and Nuggets

The Etsy community is special. Most of the corporate business world is a dog-eat-dog environment, but the Etsy community is different. Etsy sellers help other Etsy sellers—yes, even direct competitors sometimes help direct competitors! Relying on the communal tips, advice, and wisdom from those who have gone before you and are in the same journey with you is a treasure chest of gold nuggets! Together, we will begin digging into these tips, advice, and wisdom and explore where to find more.

Practicing Business Self-Development

The fact that you are reading this book shows that you value developing yourself and your business. You must grow personally in the components you already know about business. This does not happen magically, but rather with intentionality. Business self-development is the water, fertilizer, and fertile soil that will help your business grow faster. It will also help you avoid costly mistakes. Together, we will look at the most helpful resources available for Etsy sellers.

Next Steps and Advanced Application Studies

Finally, you will be encouraged by the stories of a few Etsy sellers, and you can plan your next steps toward creating a thriving business. I have also included two advanced application studies that can help both newbie and experienced Etsy sellers improve their business by looking within their own shop and at the Etsy marketplace as a whole.

My Etsy-preneurship Story

My wife, Katie, started selling on Etsy in 2007, thus beginning her Etsy-preneurship story. She loves babies, had worked with babies in her job, and naturally started making baby-related handmade products. She sewed burp cloths, baby bibs, diaper bags, and the cutest little baby girl dresses and jackets! She started her Etsy shop as a way to be able to work from home and not take on a full-time job. During this time, we were saving money to purchase our first home, with hopes of soon expanding our own family with little ones to use all these cute things, too!

During this time, we learned our way around Etsy: buying raw materials, making products, taking pictures, writing product descriptions, pricing products, shipping products, and all the other fun Etsy activities (posting in the forums, Etsy blogs, and Etsy teams). It did not take long to realize, “Whoa, we are starting our own business here! What about the legal requirements of running our own business? What about the tax implications? What will we use for a bookkeeping system? Oh, we need a business plan, too! And wait, we don’t even have a business-only bank account! What will our day-to-day operations look like?” This is where my Etsy-preneurship story begins.

I have an undergraduate degree in accounting and a master’s degree in accountancy from Baylor University. I am a Certified Public Accountant (CPA) and Certified Treasury Professi...