The idea behind b.haven seemed simple: create fun stuff in my head, buy materials, make the stuff, sell the stuff and rejoice in being one of the lucky ones who gets to what she loves and make a living. I would use eco-responsible materials, never buy fabric from China, purchase as many things from local businesses as possible, make EVERYTHING by hand, and donate a good percentage of my profits to a different charity every month. I would work harder than anyone else ever has at something like this, and get better with every print. I would have wholesalers lining up for my splendid ideas and do a fair amount of custom work. I would make people smile...
Yes, I was naive. Yes, I knew that I was being naive, but until proven otherwise, I saw no reason to worry about what I didn't know. What I didn't know...wow, it was/is a crazy long list! I am not feeling sorry for myself here (usually a signal that one is about to feel sorry for themselves), but I do believe there are things you may want to know if you are contemplating doing something like this. Here's what I've learned:
- Taxes kill me. Of the money coming in, about 40% of that goes just for local, state and federal taxes. For example, I pay sales tax on the materials I need to make the things I sell. I sell those things, and then I pay sales tax on the things I've sold. Hmmm, that kind of sucks.
- My prices are too low. Geez. I really wanted to make my work accessible to folks who may not have "extra" cash to spend on items that make them happy. While great in theory, I'm now struggling with low cash flow. Low cash flow (i.e. I have no money until I sell something) means I cannot afford to buy materials enough to solicit wholesalers, who typically buy in larger quantities. Plus, I am hard pressed to offer much in the way of a wholesale discount, because I'm at bare bones pricing as it is. (Insert the action of my slapping my forehead with my palm here.) I will never be able to sell my items for the same price as those items that are mass-produced or made in China. Why did I think I had to compete in that market, you ask? Because that is what you buy, silly pants! Think about it.
- I underestimated shipping costs. I HATE paying shipping when I purchase things online so I wanted to keep my shipping costs low. While yes, the shipping costs are accurate, they do not reflect the box, packing material, tape, and the time it takes for me to trek to the post office. I lose "profit" on nearly everything I ship. Especially if I send it overseas.
- I am the only one. Kind of funny that this was some big revelation, but you don't realize what that truly means until you are living it. If I don't do something, it does not get done. Things fall through the cracks (like buying toilet paper for the studio), and end up accumulating into a seemingly insurmountable mass of menial tasks. No, I would not rather take out the trash than draw, print, experiment, and produce, but who else will do it? If I forget a follow-up call, there is no one else to blame (geez, I hate that).
I still love creating the things I do. I love the fairs I've attended and the shops I've sold in. I do not love the business of the business. If I had my way, I would give away everything I make to anyone who likes it. Why, do I have so little value for my things, you ask? No, absolutely not. If I can brighten your day with what comes out of my head and hands, I'm crazy happy!
So, a balance is needed. I've gone over my budget with a fine-toothed comb...uh, make that a fine-tipped pen, and it looks like I will have raise my prices a smidge. The only other major place I can trim costs is in taxes. I think I will request an itemized list of items that my tax dollars go for, and then cross off the things I don't want to contribute too. Think that will work?
Always learning the hard way,
Ms.b.haven
p.s. And yes, I am now grooming dogs a couple of days a week to make end's meet. There's no place for ego in entrepreneurship. :)
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