1/12 Running a handmade business is a *labor of love*, right? ❤️ But passion alone doesn’t pay the bills! Let’s talk about something every artisan needs to understand: overhead costs. What are they, and why should you care? #handmadebusiness #smallbusiness #overheadcosts
2/12 Simply put, overhead costs are the expenses that keep your business running *behind the scenes*. Think rent, utilities, internet – the stuff that’s essential whether you sell one item or one hundred.
3/12 Unlike direct costs (like yarn or clay), overhead can be tricky to track. But ignoring them? That’s a recipe for underpriced products and a struggling business. Imagine selling jewelry, thinking you’re profitable, then realizing you BARELY broke even after rent and website fees 😬
4/12 So, what kind of overhead costs are we talking about? They can be fixed, variable, or somewhere in between. Here are a few examples specific to handmade businesses:
5/12 * **Rent/Mortgage:** (Workspace) – Probably a big one.
* **Utilities:** (Elec, Gas, Water) – Can fluctuate, esp. if you’re firing up the kiln all winter!
* **Internet/Phone:** Essential for online sales & chatting with customers.
* **Software:** (Website hosting, email marketing)
6/12 * **Marketing/Advertising:** Photoshoots, craft fair booths, social media ads – gotta budget for these!
* **Insurance:** (Liability, Property) – Non-negotiable.
* **Office Supplies:** (Packaging, printer ink) – Adds up FAST!
* **Education/Training:** Workshops to level up your skills.
7/12 * **Depreciation:** (Equipment) – Your pottery wheel won’t last forever!
* **Salaries/Wages:** (If you have help!)
8/12 Okay, so how do you manage all this and *maybe* even reduce those costs? Here are a few ideas:
9/12 * **Track EVERYTHING:** Spreadsheet, accounting software, notebook – whatever works! More data = better decisions.
* **Negotiate with Suppliers:** Doesn’t hurt to ask for a discount!
* **Bundle Services:** Insurance, internet – sometimes you can save $$.
* **Reduce Energy Consumption:** Turn off those lights!
10/12 * **Optimize Your Workspace:** Can you reorganize to avoid needing a bigger (more expensive) studio?
* **Shop Around for Insurance:** Get multiple quotes!
* **DIY Where Possible:** Marketing materials? Social media?
* **Analyze Your Spending:** Regularly review expenses!
11/12 * **Set a Budget and Stick to It!**
* **Consider Co-working/Shared Studio:** Especially when starting out, this can slash rent/utility costs.
12/12 Feeling overwhelmed? Tools like TrueCraft can help! It helps you automatically track material costs AND those often-overlooked overhead expenses, giving you a *true* picture of your profitability. Check it out and see how it can help your handmade biz!
