business,  conferences,  inspiration

debt-free business

snapchatThis weekend I spoke with Diana & Katie about starting and running a handmade business. In my nervousness I rushed through my part and realized later that I left out some notes that I wanted to hit so I figured what better place to recap than here on the blog! That way all of you who couldn’t go to the conference can hopefully benefit from it as well!

The ladies on the panel all chose things that they were passionate about to speak on. My passion that I want to teach people is that you don’t have to start a handmade business with debt or necessarily run a business with debt. I’ve been in business for 10 years come October and have never once gotten a business loan or been “in the red.” Here are my tips for anyone wanting to start a handmade business.

startingIn 2003 I decided I wanted to start my business. I had made jewelry in high school but had taken a hiatus for a few (or 7) years. I attended a jewelry party with my mom and thought “I can do this!” so I did some research on the cost of materials and talked to the hubby. I told him that I needed $150 to start and he agreed. The rest is history! I bought some beads and had my first at-home jewelry party thanks to a friend that was very successful. After that I made it legal and set out to grow the business. As I said, after that initial $150 investment I never carried any debt.

Of course there are some businesses that need expensive tools or machinery when you start – but I honestly believe that most businesses can start small, without debt. Without needing a small business loan. If you do need to get a loan, I suggest that you be highly realistic about your needs and what you can afford. Don’t get a loan with high hopes of what your income could be, stay realistic and grounded. Growth will come.

planningI have to be completely honest and tell you that I didn’t do much planning for the business. I did research on the legal aspects of starting a business and paying sales tax, but beyond that there wasn’t much goal-setting or other planning that went into it. Please be sure when you start your business that you know the legalities of it – you need to know how to register as a small business or LLC and also when you need to start paying sales and income tax. There are many great resources out there like SCORE where retired small business owners will give you the advice needed and share their knowledge with you.

pricingThere are a few ways to price your items. The way that I price my items I believe is how a lot of businesses that deal with materials price their items. You take your cost to make the goods and then multiply it by 3-4 (or more). This leaves room for discounting for sales and wholesale while allowing a profit. I have seen businesses mark their items up to 10x the cost of goods – you have to find what works for your business and helps offset the cost of advertising and running the business as well. Another way to price items for someone who has a low cost of goods is to figure out what you want your hourly rate to be and use that as your guideline for pricing based on how long it takes to make each item. For example, if it takes you an hour to design and create an art piece, it will be priced at your hourly rate. There are other things to consider when figuring out price such as advertising, fees, packaging, free giveaways, etc.

reinvestAfter my first jewelry party I didn’t pay myself (or if I did it was very little). I accounted for the cost of the supplies, donated a percent to my church and reinvested the rest. I think it’s so important in the beginning to know that you’re not going to be able to start putting a bunch of money in your pocket. You’ll need to reinvest it back into the business to build inventory as well as advertise and get your name out there. Keep reinvesting until you have enough inventory to get you by. At this point in my business, I can just order replenishment as needed, knowing that the sales from the month will more than cover the expense. You’ll get there – it might take a little while (or it might not) – but you’ll get there. Keep at it!


This obviously is different for everyone. You might have a business where right off you need to pay yourself in order to get by. Just be sure to pay off your supplies and fees first and the remainder is profit. If you are able to reinvest, do that first and build inventory as I said. You’ll then get to the point where you have enough sales that you’re inventory is stocked, fees are paid and advertising has been done. At that point you can pay yourself with the remaining profit.

A little bit of encouragement for you…My first official year (2004) I did well. I did a lot of home parties and craft fairs, making a few hundred dollars (or more) at each. The next year (2005) my sales dropped by half. I still hadn’t found my footing in the online marketplace and by then all of my friends had hosted parties so I wasn’t doing as much. But I kept at it. In 2006 my sales increased by just about $600 over the previous year but by 2008 it had more than doubled. It’s grown every single year since then and in 2011 I was able to use the business as my full time income. I still feel like I’m trying to figure it out and I figure if I haven’t yet, then I never will. I‘ll just keep trying to find out what works for my business. Don’t give up. Success doesn’t come for everyone overnight. It took me a long time. You can do it!

{p.s. don’t forget that the Mother’s Day deadline is in just over a week!!}


  • Melisa

    Such great advise! My husband has had a dream of having a game store (board games). He did set up a website to sell online but life has gotten busy and he’s been on hiatus. We also talked about doing game parties. Your words are encouraging! I know when The Lord is ready he’ll open that door back up.

  • Andrea Worley

    This is such awesome advice. I started my photography business debt free and have been ever since. Buying equipment when I booked and got paid for a job, renting equipment till I could afford it, etc. Love hearing your story and your heart Amy, wish I could have heard your talk but I know you did awesome!

  • Jaime H

    I was THERE at that first party! It’s been such a neat experience watching you grow your awesome business. I’m so so so proud of you! 🙂

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