Setting up shop: Things to consider when starting your craft business

I'm ready! Let's get started! I want to make things! I can't wait to make my first sale!
Those are the first thoughts I have when I consider the official launch of my crafting business. Maybe yours are similar.

I'm as eager to get started with business as anyone else who wants to be self-sufficient with their income. But here's where I have to be reasonable: You're probably not going to make any money the first week. For that matter, you may not even get your first set of items up for sale!

So what gives? I thought the whole idea was to start selling the stuff we're making? Well, it is. But before you get started with the listing and selling part, you need to do some ground work to make sure you're ready for the outcome.

One day's worth of orders. I was so unprepared!

One of my most successful craft ventures was selling Christmas ornaments with my sister to help raise money for my maternity leave. My leave from work would be unpaid, which meant I had to find a way to scrape together an extra 6 weeks worth of income by doing something on the side. It was wildly successful, and I was wildly unprepared. At 8-and-a-half months into my pregnancy, I spent every hour I wasn't working my day job scrambling to complete over 100 hand-painted ornaments, as well as wrapping, packing, boxing, sealing, marking and shipping each one. It was wonderful and raised the money I needed in less than two weeks, but I was unprepared, so it was a nightmare, as well.

Never again.

You're starting a business. Have everything ready before the doors open.

There's a lot of little things that you may not think of when starting, things you lose track of because of excitement. But making sure everything is in order before you start means everything will be more fun and easier to manage. If you spend the first few days of your new venture taking care of the business side of things, it'll save you a ton of time and frustration in the long run, too! So what kind of things do you need to focus on first?

Make sure you can ship your products reliably.
If you're like me, you're mostly selling online, which means everything leaves your house by way of the mailbox. Before you sell anything, stop to consider how it's getting to its new destination.

• Have you ordered boxes or padded mailers?
• Do you have bubble wrap, wrapping paper, packing peanuts?
• Do you have enough tape?
• Are you shipping your items in gift boxes or bags?
• Do you have enough for everything you've made?
• Are you printing postage from home?
• If so, do you have an accurate postal scale?
• Do you have enough printer paper for invoices, packing slips and postage?
• Do you need a paper cutter for any of those?
• Does your printer have enough ink?

All of these are things you need to consider before anything goes up for sale. Running out of any of these unexpectedly can make everything more difficult and more costly than it needs to be. You can get a case of 25 bubble mailers at Office Depot for $20 and tax and have them instantly, but you can get 250 from uline.com for $21 and shipping if you think ahead. So in the first week, be sure to create an office inventory of shipping materials you'll need and make sure you'll have it on hand!

Keep taxes in mind and plan accordingly.
Sorry, folks, but selling from home doesn't mean you can skip out on income taxes. You'll officially be considered self-employed, and have to mind your taxes accordingly. You'll want to make sure you have your paperwork in order before you start. You will need a file cabinet and folders for your invoices, receipts and spreadsheets.

If your business requires you to buy materials from places that charge sales tax, consider applying for a state tax exemption. Presenting your exemption ID to local retailers means saving a few pennies on your supply costs.

Keep all your receipts for any business-related expenses. These can be anything from cost of materials being used to the cost to rent a booth space at a convention or craft show. If you're selling on Etsy, Etsy's fees can be claimed on your taxes as venue costs. If your receipts are printed on thermal paper, like you get at most big box retail stores, be sure to make a photocopy and staple the original receipt to it. Accidental exposure to heat can cause thermal paper receipts to become illegible. I know people who have kept sensitive receipts in the freezer, just to be sure, but that's not necessary for your business. All receipts should be stored in acid-free containers or folders, too, to help prevent discoloration.

Different states have different laws, but there is a minimum income threshold before you have to pay taxes on your earnings. In Tennessee, I don't have to report my earnings until I make over $400 with my home business, but I still keep funds set aside until tax time for just in case.

Consider sales tax, as well. Tennessee requires me to collect sales tax only on sales made in this state. Etsy adds state sales tax to the total for me, but if you're offering items at a flat cost while at shows or craft fairs, that cost will be coming out of your pocket at the end. Plan accordingly and keep careful records of how much sales tax you've collected through the year and where you need to send those collected funds.

And then, of course, we have one of the most important things to worry about.

Start making products well before your launch.
While you can still make sales by only having a few things in your Etsy storefront, their algorithms favor shops with a lot of stock. I've heard many people say that having 100 items is the sweet spot, and that their sales don't increase too substantially beyond that point. To get started, though, you probably need to have about 20 items ready to list when your shop opens.

Why? Well, your storefront just looks better if you have things for shoppers to browse, rather than seeing everything you offer at a glance. The longer people look at your page, the more memorable it becomes, and the more memorable it is, the more likely shoppers are to share your shop with friends or buy something, themselves.

While preparing your shop you'll also want to make sure your product photos and presentation are high-quality and uniform, but we'll address that next, when I'm tackling the task for this venture!