Entrepreneurs have a lot to learn in order to run actual businesses, and in creative industries there is the added element of stigma around putting a monetary value on art. In the world of crafting it is also common for people to expect many things for free. How do we then ensure our efforts take a firm into the realm of business rather than it remaining a hobby or charity?
Pricing Correctly
Anytime we put a price on a product or service, we actively shape our industry as a whole.
We tell us as business owners, our customers and our competitors not only what we think our creation is worth, but also how hard we must work and how many hours we must dedicate in order to put food on the table.
Not everyone in business wants to claim responsibility as a person, who affects the whole. This is problematic in places like Etsy where it becomes the norm for customers to chase the absolute lowest prices.
Think carefully before joining such a space, because while we may not like it, volume or bulk becomes the set standard. Can you keep up the pace with creating many copies for low prices to be able to not only cover costs but also pay yourself what you deserve?
What characterises Etsy in other words is its mix of people doing business: hobbyists and business owners, who need at least a bit of profit in order to exist in a sustainable way.
Hobbyists want the sale no matter what and are happy to lower their prices endlessly. Can you compete with that? Will it be a healthy environment for your business? Or is it more sensible to have a main self-hosted website, with Etsy being an added income stream?
Pricing is only the entry point to the main thing that will take a legally registered firm from hobby to business, so let’s get to this now!
Me And My Numbers
As entrepreneurs we must separate ourselves from our businesses. It will most likely remain a struggle if we attach ourselves emotionally to all activities in business.
A hobby by definition is a thing that does not make profit, whereas a non-profit organisation exists to remain stable but without making profit.
A business must make some profit in order to be sustainable in the long run.
This is where you may face the biggest challenge in terms of your choice of targeted potential customers, as they may be so used to getting everything under the sun for free that they will be impossible to sell to. You will also face obstacles when trying to convince people, who chase the lowest prices, to buy from you. Depending on your offerings, in the end it isn’t necessarily a very large group you could ever attract to your creative business.
I see a lot of entrepreneurs struggle with this, so most certainly it isn’t typical for creative industries only.
People respond to the stress by lowering prices, not getting best friends with their own numbers, and generally having a hard time making decisions that are taken from the perspective of their firm: “If I set my own person to the side for a second and consider my firm, looking at the numbers, what does my business need?”
Dreams Versus Reality
It is extremely hard to face facts sometimes, to set aside my own dreams and consider how the market works, the local and global financial situation, expected development, and what a particular decision would mean for the finances of my firm.
Just because I wish something would be a certain way doesn’t mean it is. My ego has no place in decisions affecting my business. I can still keep shopping as a consumer in other people’s businesses, but don’t have to offer everything in my own.
Working hard is only a first step, but working hard on the right things is key. This is where business skills comes into play. Many want to have their own business(es), but not as many want to step into life-long learning.
A thriving business is led by one or many, who understand that in order to make—and keep making—good decisions, we need new facts about anything that involves keeping a firm afloat. Social-media platforms come and go, thereby constantly changing the landscape that is digital marketing, and tools such as search engines or various services developed for business pop up and evolve.
Life-long learners, who adapt by taking the time to set a strong foundation as well as keep building it in a stable manner have much greater chances at success.
Wrapping Up
Find your own voice, stay true to it, and set prices so that they are fair to everyone. It will be a “No!” for some people, but a cheerful “Yes!” for others. Sadly, many entrepreneurs are so scared of the former that they never get to the point of understanding the latter.
Also remember that many of those, who want free patterns and such, never create anything themselves to share with others, so whenever someone complains rudely, my first reaction is to wonder whether they ever give in addition to taking.
I am here for the part where it becomes joyful to run a business. There is no shame in being able to put food on your table and pay bills. It isn’t necessary to explain this to your dream customers, but they have already understood how the world works.
And now I am curious about your thoughts on this. Are you a fellow entrepreneur? Customer? Please comment below!
Photo credit: Marek Piwnicki.
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