Tips For Small Business Owners Part Six: Don't Sell Yourself Short

By Toni Hetrick

If you are looking to run a successful business then you want to make sure that you are valuing your business appropriately.  It’s a common mistake to get caught up in the excitement of starting a business, and forget to sit down and really do your homework before diving in, head first.  It’s truly necessary to whip out the calculator and determine as accurately as possible what your total expenses are, in order to price a product for sale.  In the simplest of terms you want to make sure that you are turning a profit.  Remember your goal is creating a business, not funding a hobby.

You may have a natural business sense and find this post a little dull, but many people struggle with this for various reasons.  There are many people out there that fall in love with a business concept and don’t actually sit down to do the math to ensure they are pricing their products appropriately.  There is an overwhelming amount of information to research when starting a business, because of that, let’s look at a small scale business idea.   Imagine this scenario…..Sandy starts making jewelry.  Initially she makes some for herself and a few friends.  Before she knows it, she’s getting compliments everywhere she goes.  She can’t believe how people LOVE her jewelry.  Many admirers tell her she should sell her jewelry.  She’s quickly swayed into thinking this could be a lucrative business.  She rushes to the local craft store, stocks up on supplies and gets to crafting.  Sandy is filled with excitement and pride that people actually want to wear the jewelry she is making.  She takes a bundle of freshly made jewelry into work, her coworkers flock in like a pack of hangry seagulls.  The next thing she knows she’s overwhelmed by questions of, “how much for this one”, “oh and how much for these”.  She quickly answers $5.  In her mind she’s thinking it didn’t take her that long to make and that $5 is a fair price.  When in reality she has no idea how much it actually cost to make that specific bracelet.

Sandy may be fine with that price point, or she may have just made a mistake that is rather hard to recover from.  My suggestion is to try to contain that excitement and research before, like Sandy, you start quoting prices.  That research would include several aspects, but for the purpose of this post we’ll focus on pricing.  Unfortunately there is no one method on how to price products.  Personally I feel the most important task is to know your costs.  By costs, I mean the cost of ALL materials and labor, basically everything it took to make that product.  To break that down even further, if you are making a beaded bracelet you should figure out how many beads come in the pack and then how many beads it takes to make each bracelet. Use that to calculate the cost of each individual bracelet.

Next is a very difficult part, determining what you feel you need to make from that product.  Keep in mind, you may not make a huge profit off of one single item, and the profit will vary from one product to the next.  Sandy may have spent $100 total at the craft store on supplies.  She’s not going to make that $100 back on one piece of jewelry, but she will need to look at each piece of jewelry the amount of materials used to help determine a price for each and every item.  By the time she is done there should be a profit on that total $100 spent.  Depending on the type of product you make there is a reality that some things you just can’t recoup financially on the amount of time it takes to produce an item (EX: Quilting, Knitting, etc.).

While researching, get to know your competition.  Chances are, unless you offer something that NO ONE else does, your customers will compare pricing with the competition before purchasing.  You also need to have a good feel for the market in your area.  In some places, the market is much higher and you’ll see items selling for considerably higher prices than what you can seem to sell for in your area.  There’s definitely a learning curve with this.  You may need to adjust as time goes on, but it’s a fine line to walk.  You don’t want to undercut your prices and take a loss from the beginning, but you also don’t want to be so overpriced that people are steered away from your company for good.  Fortunately in today’s age it’s possible to do a little market research easily on social media for FREE.  You could always post examples of some of your products and ask or take a survey asking if people would feel comfortable paying however much for it.  This should help to some degree. 

I also want to caution you as far as offering discounts to people.  It’s very tempting to do, but I say BEWARE!!  If you sell someone an item at “cost”, or even take a loss on the item just to be nice, many times they will expect to get everything at that price and for all eternity.  You might be ok with that, and that’s completely fine.  I just offer cautionary advice because it can get overwhelming and it’s really hard to then raise prices and have to explain why later on.  Believe it or not, even close friends or family members can get huffy when they suddenly are expected to pay for something.  Crazy I know, but I’ve heard so many people complain about this.

I’m sure your head is spinning at the thought of all this.  Just know that you aren’t alone.  We’ve all been there.  If you have any questions feel free to comment below, or send an email.  If you liked this post please click the little heart below to show some love.  As always thank you for visiting the website. 

 

Tips For Small Business Owners Part 5: Getting Through Your First Vendor Event

By Toni Hetrick

Celebrate

So you’ve booked your first vendor event.  Congratulations and welcome to the vendor family!  Now what?  The more prepared you are, the better off you’ll find yourself.  Confirm with the event coordinator the size of the space you’ll be provided, and whether or not a table(s) and chairs will be provided.  In an earlier blog post I covered what tables and table coverings I use.  If you missed it you can find it here.  You will also want to confirm the start and finish times of the event.  Many times if the event starts at 9AM for the public to enter, then vendors will be allowed to set up earlier, like 7AM for example to set up.  There are many times that early breakdown is prohibited so keep that in mind and confirm as well.  These are a few simple questions to ask that will help you prepare greatly for the day of the event. 

Often baskets or specific items are raffled off at such events and as a vendor; part of your fee is a donation for the raffle.  You may be responsible for a basket of items or just one item that meets at least a minimum value set by the coordinator.  Make sure you confirm this, as nothing is worse than getting to an event and realizing that you were supposed to bring a basket and you don’t have one.  Remember the item you provide is a great way to earn a new customer.  You’ll want to put something together that highlights your company and what you have to offer.

Is this event themed?  If so you may want to target the merchandise you have available at this event to go along with the theme.  If there is no particular theme, perhaps there is a holiday approaching that you could gear a few items towards to help gain some sales.  At times it’s nice to offer a sale, package deal or coupon for the day of the event as well. 

Email Marketing

If you’re working on building a mailing list, this is an opportunity to grow that list.  There are multiple tactics that can be used to obtain client email addresses, but one that I find to be very successful is doing a giveaway at a vendor event.  Have your own personal giveaway in addition to whatever the event coordinator has planned.  This giveaway would be held specifically at your booth, and the items would be just from your company.  It doesn’t have to be anything significantly large, but something to draw attention, people love winning something.  In order to enter to win, part of the information people must provide is their email address.  I make sure to either explain or have it posted on the giveaway that they will be joining our mailing list. 

How will you take payment for the items you sell that day?  If you don’t already have a method of accepting credit/debit cards, I strongly suggest getting an account set up.  I used PayPal for years; however I recently switched to Square.  I was happy with PayPal, however my website host (SquareSpace) partnered with Square, and it was in my interest to make the transition to Square.  Naturally, there will be people who pay in cash, so make sure that you have money there to make change.  Bring plenty of ones.  The time you only have a few ones, you’ll have people paying you with bigger bills all day long and you definitely don’t want to lose a sale just because you couldn’t make change. 

Pack some snacks!  It’s possible that this is going to be a very long day.  Between loading your vehicle, driving to the event, setting up, lasting through the entire event, packing up and driving back home, you will more than likely be exhausted by the time the day is over.  Some events are large enough to have food and drinks, while others will not.  You want to make sure you have some snacks packed to keep you energized throughout the day.

As you can see there is a great deal that goes into presenting your business to the public at vendor events.  These are just a few of the things you will need to think about before your first event.  I hope to provide additional tips in future blog posts.  Until then, I hope you found this post helpful.  As always, thank you for visiting the website.  If you enjoyed this post be sure to click the little heart icon below, to show some love. 

 

Tips For Small Business Owners Part Four: How To Handle Creeping Competitors

By Toni Hetrick

I’ve spent considerable time deciding whether or not to write this post.   This topic arises frequently in different social media groups that I belong to, and from what I see, the stances vary.  Initially, when I see someone’s post they describe the way in which they’ve been approached and then ask for advice on how to answer/handle such situations.  I’ll take this opportunity to voice my opinion for what it’s worth, and offer you the reader, the opportunity to open conversation on the topic in the comments below. 

First I’ll provide an example so that you know for sure what I’m speaking of.  Imagine that you are a crafter.  Your specialty is anything vinyl (t-shirts, signs, decals, etc).  When you decided to begin your business, you spent a significant amount of time researching all the avenues of the business.  You have money invested in equipment and merchandise and have learned from your own successes and failures.  Yes, you viewed hundreds of hours of youtube tutorials, but you performed those searches on your own, you didn’t simply ask someone, “hey how do you do this?”  Now imagine you are approached by someone and they blatantly tell you they want to start a business doing the same exact things you do, and they want to know your secrets.  Let’s say you are set up at an event, and that person picks up item after item asking, “Where did you get your blanks; where do you purchase your vinyl; where did you find this image?”  At what point is this person no longer simply curious of your trade?  At what point do you seal up like a vault?  What do you say to someone in this situation?

Here are my thoughts.  I am all for helping people out.  I would eventually like to do tutorials on different items that I feel I’m very confident in creating, to provide assistance to people at the beginner level.  HOWEVER….. I have worked so very hard to get where I am, that I also find myself feeling defensive at a certain point.  Just like in the example above, I’ve spent thousands of dollars on supplies and equipment in addition to hundreds of hours of research.   I’m not going to just hand over all my information.  To the people who feel it’s acceptable to approach a stranger or even an acquaintance and tell them that you basically want to copy what they do, have a little respect. 

I also understand that the crafting world has experienced a bit of an explosion over the last few years.  Especially with the popularity of tools such as the circuit and silhouette, so many people have begun making their own items and in turn starting their own businesses.  I salute you all and LOVE shopping from small businesses.  Because of this surge in crafting, each and every one of us has to keep up to date on what’s popular and adjust accordingly.  There will always be competition and I’m fine with this.  But if you are trying to compete with another business, please stand out on your own.  Take the initiative to do some research on your own.  Perhaps the techniques that I use to make something, work great for me, but not for you.  Again everyone is different, but I want my company to stand out and be as unique as possible.

Now for what I consider one of the most difficult tasks, how do you respond to such questions?  Personally, I try to stay cordial with everyone.  I don’t want to argue with someone if I don’t have to.  Frankly, who needs extra stress in their life?  Insert the famous, “Ain’t nobody got time for that” quote.  I prefer for people to only associate good interactions with my business.  For me, I would keep my response minimal and perhaps a bit cheeky?  If someone asks where I get my merchandise or blanks, I may say something like, “I purchase from several companies.  If you do a little digging you can find decent companies to buy from in bulk.”  I feel that was short, somewhat informative and yet I didn’t provide info on where I actually get my merchandise.  As far as the techniques used to make something, again vague responses would be my method.  “As far as technique, it really varies on what I’m making and how I want it to look.”  Hopefully, the spy catches your drift and realizes they aren’t going to get much info from you.  I suppose if that person persisted in attempting to interrogate I would just have to politely yet sternly let them know how hard I’ve worked that I can’t share that information, they’ll have to do the research on their own. I mean Colonel Sanders recipe is still a secret after all these years, right?

I understand this post may not have been incredibly insightful, however I’m hoping it helps provide confidence to like minded individuals that you aren’t alone.  The next time you find yourself in this situation, perhaps you’ll remember this post and feel more comfortable with the interaction.  As always, thank you for visiting the website.  Feel free to share your thoughts in the comments below.  If you liked this post please click on the heart to show some love.