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Wednesday, July 30, 2014         

AKAMAI MONEY


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Aspiring pro crafters should start small and build inventory


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Question: How does one become a professional crafter, to pursue an outlet for creativity and lawfully supplement household income?

Answer: I just had a GE (general excise tax) license before, but what had happened was, my partner, since she wasn't working, I guess I decided to incorporate (in 2007) so she could be part of the business ... also the reason I did it was for tax purposes and security (legal liability) reasons.

I was actually a music major in college, and in my freshman year I was in the Royal Hawaiian Band. That was my full-time job for five years. (She plays the clarinet.) I went to the university but didn't graduate because the schedule didn't work out — I also played for the Honolulu Symphony part time, for at least 20 years, as an extra. I went to Northwestern (School of Music) to study with Robert Marcellus, and when I was up there I took art classes. That's when I started making jewelry. When I came back I decided to do it full time and quit my band job (circa 1984).

Q: Given the state Department of Taxation's crackdown on the "cashless economy" including craft fairs and farmers' markets last year, it is obvious that one needs at least a GE license, but maybe not everybody needs to incorporate, is that right?

A: I would probably say "start small," just get a GE license and do the small school fairs. A lot of the (larger) fairs now are very expensive (to get into, as a vendor).

Start maybe at Christmastime. It's quite competitive these days. I would say maybe gear up for Christmas. Build your inventory, and choose half a dozen fairs from October to December, and go from there. From the beginning of the year, the Handcrafters and Artisans Alliance has many events at Kapiolani Park.

Q: What about bookkeeping? Should you hire someone?

A: My mom helped me (in the early days) and now my sister's doing the bookkeeping work for me.

Q: Since many, if not most, crafters are already employed at something else and do crafting on the side, does one need a business plan?

A: I had no business plan. Maybe I'm not a good example. (laughs) I followed the advice of my tax man.

I guess for what I was doing (making ceramic jewelry, at the time), I didn't really have overhead. I worked out of my parents' home, and my supplies, back then — a bag of clay was maybe $10 and you could stretch that bag of clay a long way for jewelry. My costs were very little. I bought a kiln for less than $400, maybe around $350, and I still have that kiln. (She now makes fused, dichroic glass jewelry.)

Q: Should a crafter set aside specific times to produce items, to increase their inventory?

A: I've heard this before, but for me, I'm not disciplined in that way at all, I'm such a bad example. (laughs) I have to be in the mood. If I have things to make (for an order) or if my inventory is very low, I know I need to really sit down and work, but my rule is, after dinner I don't work. Some crafters work through the night, but my hours are ... between 8 (a.m.) and 6 (p.m.).

Q: What type of handcrafted item has the largest profit margin?

A: I guess jewelry would have the biggest profit.

Q: How do you decide what to charge for your items?

A: I have no exact calculation. Of course, the time that goes into it — the materials I use and — "what can I sell it for at retail and what can I sell it for at wholesale?" Wholesale is half of retail.

Somebody said the cost (of your materials) times three. I kind of look at my piece and say, "I think I can sell it for this much." I'm sure people have other ways.

I know the ones who don't do craft fairs for their livelihood probably don't make enough, for their time. They're giving it away. Given the time it takes to make a Hawaiian quilt (they should charge more), but maybe they enjoy doing that.

Q: Is it important to join a crafters' organization right away?

A: The Handcrafters & Artisans Alliance is a pretty good organization. It's $75 a year, but then you get to participate in all their events. You need to have enough inventory. If you're just beginning, maybe you don't want to pay $75 and not do a show.

I have to fill accounts, so I'm busy all year instead of just at Christmas ... but the alliance has shows in the beginning of the year. January and February are good months because of a lot of tourists that come in from Canada, but in the summertime sales are tapering off and then it picks up during Christmas.

Interviewed by Erika Engle, erika@staradvertiser.com

Editor's note: "Akamai Money" seeks out local experts to answer questions about business in Hawaii. If you have an issue you'd like us to tackle, please e-mail it to business@staradvertiser.com and put "Akamai Money" in the subject line.






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