What I Wish I Knew Before Starting a Small Handmade Business

Starting a small handmade business sounds pretty straightforward. Make something you believe in, create a website, post a few pictures on social media, and start selling.

I quickly learned that making the product is actually the easy part.

Running a small business—especially when you're the person doing nearly everything—means becoming a manufacturer, marketer, photographer, bookkeeper, inventory manager, salesperson, website administrator, customer service representative, shipping department, and product developer. Sometimes all before lunch.

I started Soft Skin Naturals because I enjoyed making plant-based skincare products and believed there was a market for them. What I didn't fully appreciate at the beginning was just how much I would have to learn about the *business* behind those products.

Here are some of the things I wish I had understood sooner.

Making a Great Product Isn't Enough

This may have been one of my biggest lessons.

You can make a wonderful product. You can use quality ingredients. You can package it beautifully. You can price it competitively.

And it can still sit on the shelf.

Customers have to find it first.

That means learning about product photography, websites, search results, social media, email marketing, craft fairs, farmers markets, online marketplaces, advertising, packaging, promotions and probably a dozen other things I haven't mentioned.

I've learned that creating the product and selling the product are two completely different skills.

As a maker, it's very easy to spend most of your time developing new products because that's the enjoyable part. But at some point, you have to stop making and start marketing.

A Sale Isn't the Same Thing as Profit

There's something exciting about hearing that notification that you've made an online sale or watching someone pick up your products at a market.

But if someone buys $30 worth of products, you haven't made $30.

You have ingredients. Containers. Labels. Packaging. Credit-card processing fees. Website expenses. Marketplace fees. Advertising. Shipping materials. Postage. Booth fees. Insurance. And plenty of other expenses.

Those costs add up surprisingly quickly.

One of the most important things I've learned is that revenue isn't the number that tells you whether your business is succeeding.

Profit does.

Today, I'm much more interested in what I keep from a sale than simply how many sales I've made.

There Are Expenses You Don't Think About in the Beginning

When you're figuring out what it costs to make a product, it's easy to focus on the obvious things.

If you're making soap, for example, you calculate the oils, butters, essential oils and other ingredients that go into the bar. Then perhaps you add the label and packaging.

But running the business creates another entire category of expenses.

There's the website. Domain name. Email marketing. Business insurance. Market displays. Signs. Tables. Payment-processing fees. Shipping supplies. Advertising. Booth fees. Office supplies.

Individually, many of these expenses don't seem significant.

Collectively, they can make a very big difference.

I wish I had paid closer attention to all of these costs from the beginning rather than simply asking, "How much does this product cost me to make?"

The better question is, "How much does this business cost me to run?"

Pricing Is Harder Than It Looks

Pricing handmade products can be uncomfortable.

You calculate what something costs to make, look at what competitors charge and eventually settle on a number that feels reasonable.

Then you start worrying.

Will customers think it's too expensive?

Should I lower the price?

Should I offer a discount?

Should I offer free shipping?

But lowering prices without understanding your numbers can create a different problem: you can become very busy without actually making much money.

I've learned that pricing needs to account for much more than ingredients. Your price has to help support the entire business.

That doesn't mean charging whatever you want. Customers ultimately determine whether your product provides enough value for the price.

But competing simply by being cheaper isn't a strategy I want for my business.

Not Every Place You Can Sell Is a Place You Should Sell

When you're trying to grow a small business, it's tempting to put your products everywhere.

Your own website. Etsy. eBay. Farmers markets. Craft fairs. Festivals. Local stores. Social media.

The thinking is understandable: the more places people can find you, the more you'll sell.

I've learned that it isn't quite that simple.

Every sales channel requires time, inventory and often additional fees. An online marketplace may provide access to thousands of potential customers but also put you next to thousands of competitors. A large festival may bring huge crowds but also come with a substantial booth fee.

The important question isn't simply, "Can I sell here?"

It's, "Is selling here profitable enough to justify the time and money I'm putting into it?"

Sometimes the answer is yes.

Sometimes it isn't.

And sometimes you don't know until you try.

Some Things You Try Won't Work

This one can be difficult.

You can spend hours creating a product, photographing it, writing the listing, promoting it and waiting for customers to discover it.

And nothing happens.

You can pay for an advertisement that doesn't generate sales.

You can attend an event that isn't nearly as profitable as you expected.

You can create a promotion that customers largely ignore.

It's tempting to view those experiences as failures. I'm learning to look at them differently.

Every experiment gives me information.

If people see a product but don't click on it, perhaps the photograph or title needs work.

If they click but don't buy, perhaps the price, shipping cost or product description is the problem.

If something repeatedly fails despite changes, maybe the market simply isn't interested in it.

Small-business owners have to become comfortable with testing, measuring and changing direction.

Your Customers Will Teach You About Your Business

One of the interesting things about selling in person is watching how people shop.

They pick products up. Smell them. Compare scents. Ask questions. Put something down. Pick it back up.

You start noticing patterns.

The products you thought would be the stars aren't always the ones customers gravitate toward. Sometimes a product you almost didn't bring becomes a bestseller.

Those interactions are incredibly valuable.

I've learned to listen carefully to the questions customers ask because those questions often tell me what isn't clear about my packaging, signage, website or product descriptions.

Customers are constantly giving you information.

You just have to pay attention.

You Have to Know When to Stop Doing Things

Small-business owners hear a lot about persistence.

Keep going. Don't give up. Stay consistent.

That's good advice—up to a point.

Persistence doesn't mean continuing to spend money on something that isn't working.

Sometimes the best business decision is to discontinue a product, stop an advertisement, leave a marketplace, change a promotion or decide not to return to an event.

I've become much more willing to ask:

"Is this actually helping my business?"

If the answer continues to be no, I don't think stopping is giving up.

I think it's running a business.

You Can't Do Everything at Once

When you own a small business, there's always something else you *could* be doing.

• You could create another product.
• Post on social media.
• Update your website.
• Apply for another market.
• Improve your photographs.
• Write an email.
• Research packaging.
• Analyze your sales.
• Work on your bookkeeping.

The list never really ends.

One of the things I'm still learning is that being busy isn't necessarily the same as making progress.

Sometimes the most productive thing I can do is decide what *not* to work on.

What I Would Do Differently

If I were starting my handmade business again today, I would spend less time worrying about having everything perfect and more time building simple systems from the beginning.

I would track product costs carefully.

I would track where every sale came from.

I would evaluate markets and advertising based on profitability rather than just sales.

I would resist adding too many products too quickly.

And I would spend more time learning what customers actually want before deciding what I think they should want.

Most importantly, I would remind myself that a small business doesn't have to become a huge business to be successful.

Success depends on what you want the business to do for you.

I'm Still Learning

I certainly don't have everything figured out.

That's actually one of the reasons I wanted to start writing about small-business ownership.

There are plenty of articles telling entrepreneurs what they're *supposed* to do. I'm more interested in talking about what actually happens when you try it—the things that work, the things that don't, the numbers behind the decisions, and the lessons you sometimes learn the expensive way.

I'll be sharing more of those experiences here as I continue building Soft Skin Naturals.

Because if there's one thing owning a small business has taught me, it's this:

Making something is only the beginning. Learning how to build a business around it is the real journey.