Daughter setting up a craft business, advise, pointers appreciated.

Torkijo

HI, our Daughter is about to turn 16 and wants to turn her crochet passion into a business selling her creations, can anyone point us to a checklist or anywhere to get an idea what we need to do legally.

So far we figure we need to look into:

Insurance for events, 

Product testing,

Tax?

Taking payments,

Online stores - Etsy vs Instagram vs Ebay etc.

Help really appreciated as her Autism makes her full on and we are a little out of our depth on some of these things.

Cheers

T

elsien

Business plan? 

Working out what it’s going cost her in materials, her time,  fees for any selling platform plus profit to see if it’s worthwhile.

Plus research into what are already out there to see how much of a market there would actually be?

Could  her energies be directed towards that while you look into some of the other stuff for her?

elsien

ETA – I’m not sure what you mean by insurance for events?  If she’s paying to have a table for an existing event would their insurance not cover that? 

She might want to look on here as well to see if there’s anything relevant for her.
https://www.youthemployment.org.uk/careers-advice-help/choices/starting-your-own-business/#:~:text=Can%20you%20start%20your%20own,Yes%2C%20you%20can.

pramsay13

Speak to Business Gateway or similar. 
Is this going to be a side hustle to go with education or is this hopefully going to be a full-time business which is possible but extremely difficult. 

lincroft1710

elsien said:

Business plan? 

Working out what it’s going cost her in materials, her time,  fees for any selling platform plus profit to see if it’s worthwhile.

Plus research into what are already out there to see how much of a market there would actually be?

Could  her energies be directed towards that while you look into some of the other stuff for her?

This is an excellent post.

My memory may be at fault (it often is, I'm old) but I think there was a post on the Boost Your Income board where one or two posters were saying their craft sales were at a very low level. Would your daughter be upset if her products were slow to sell?

Rather than event insurance, you need to think about product liability insurance.

DullGreyGuy

elsien said:

ETA – I’m not sure what you mean by insurance for events?  If she’s paying to have a table for an existing event would their insurance not cover that? 

Most events will require the stall holder to have Public Liability insurance. Product liability is also sensible given she is manufacturing products but for SMEs product tends to be embedded in PL. 


Is this intended to be a serious business or pocket money? As with any business, you need to workout how you are going to find your customers in the most cost efficient way possible. Secondly, you need to be realistic about pricing... less than half your time will be spent making, much more will be marketing, dealing with enquiries, runs to the post office, buying supplies etc etc. So if it takes you 2 hours to make a hat that means you need to factor in 4 hours of time when pricing. Next sell bobble hats for under £10 so are you going to be happy making under £2.50/hr or do you know you're going to market them so people are willing to pay £50?

martindow

Many craftspeople and artists find it very hard to make a living from selling the things they make as people will not pay sufficient to cover the hours put in.  Your daughter needs to look at retail price, the time she takes and the cost of materials to see what the hourly rate is.  She can then decide if it is viable as a business.

Some people enjoy the process of making and are happy to see any sales as covering the cost of their materials rather than making their fortune from it.

pjs493

Google Simply Business - they provide reasonable quotes for Public Liability Insurance. If your daughter plans to do small craft events coverage of £2million will be sufficient, larger events may require cover up to £5million. For my small business I pay in the region of £70 a year, although it's due for renewal in a few weeks so might have increased a bit since last time.

If she expects to have a turn over of more than £1000 a year she will have to do a tax return to declare any profits. if the idea is for it to be more of a hobby, there may be little in the way of profits, but some of her expenses can be written off against any tax bill. There are several ways in which she could set up her business but if its more in the realms of a being a hobby or little side venture than being self employed is probably the easiest way to go about it. 

My husband and I registered our small business as a Limited Company, but this was because we had plans to expend our little side venture into bigger things in the future, there were other reasons too from a tax perspective because we were worried that if we set it up as a partnership it could tip my husband over into the higher tax rate if we made too much profit. As a Limited Company his only risk of this was if we paid out dividends.

I set up a business bank account using Mettle by NatWest and use Square as a point of sale method for taking card payments. They take a small fee from every card transaction and their app allows me to input stock etc. I also use it to input cash transactions and find it really helpful as a way of recording what I make in a given day at an event. It also links to the website that is also by Square so everything crosses over and updates when we make an online sale or an in-person sale.

I can't comment on third party online stores such as Etsy as I've not used those. The vast majority of my sales come from events that I attend with occasional online orders or people contacting me directly via our Facebook or Instagram pages to make direct orders. We also get some word of mouth sales in this way and people getting in touch after buying one of our products, loving it, and wanting to purchase more.

Torkijo

Thanks all, thiswill definitely be a side money making hobby whilst she is still at College, after that we will see, but I do not think it will make enough as it is to support her but thats a couple p fyears away so its about the  making and getting some money for materials plus somespending money really.

Thanks for the above tips, lets see how she goes with them.