Thursday, July 22, 2010

Friday, July 16, 2010

Money Talks

Hi All,

Today's business post comes from a financial strategy guide.

Time and money

Give yourself a week to do a task, it will take a week—but give yourself two days, and it will take two days.

This phenomenon is known as Parkinson’s Law, which states: “Work expands so as to fill the time available for its completion.”

The same is true of spending and money.

When budgets expand

The minute you get a raise or even some birthday money, enter Parkinson’s Law: Your spending expands to consume the additional cash.


1.Shrink your numbers: If you give yourself $100 to spend on supplies each month, you will. Lower that limit and you'll surprise yourself by spending less.

2.Be skeptical about “needs”: If you get a $200 raise, don't justify spending it because you "neeeeed" a bigger car, new dishwasher, etc.

3.Keep percentages steady. I strive toward the 50/30/20 Budget (you may prefer the Save-to-Spend Budget plan). Because these budgets rely on percentages, as my earnings go up, my savings and spending also increase—but they remain in balance.

What's bloating your budget?

Don't guess: Read one month's bank statement and report back. Also, keep a log for a month re: everything you purchase. EVERYTHING, and the price.

Spend less. You're probably spending at least 80% of your cash on just 20% of your basic expenditures (i.e. rent, groceries, utilities). Simply paring down the items in that 20% category could alter 80% of your spending. (Hint: Parkinson’s Law can help.)

Save more. Now look at your spending on non-essentials. What if 20% of the "extras" you buy are yielding 80% of your satisfaction and fun? Identify the key 20%, then cut back other, less-rewarding expenditures (a.k.a., get more bang for your buck). Voila: Sudden savings.

It’s Business, Not Personal. If 20% of your clients are bringing in 80% of your income—a common scenario—focus 80% your energy on those winners, and consider dropping those that bring in mere pennies. (Amanda also talked about wasted effort here.)

Business 101 - Part V - Inside Gal - Sales: Setting Goals

Hi All,

I have taken a few momments to evaluate my shop today. This is something that I like to do mid-month. It helps to keep me on track and identify what my goals are and how to go about them.

The following questions I actually type up, print out and spend about a half an hour during my day thinking about. I file the finished "Monday Mid-Month Meeting Minutes" in my sales binder.

What can you do now to finish your month strong?
What are your goals and objectives for the coming month?
Start with the end in mind - work backwards and break your goal into attainable steps. What will you do?
Discern skills and tools necessary to obtain your goals.
Mehtods for tracking your progress.
Have a support partner - who can you talk to and bounce ideas off of re: small business and your goals?
Establish a 30/60/90 day game plan.

Also, YTD (Year-To-Date Sales) can be helpful. If you track your sales with the date and amount of dollars, this can help you with what to expect for the next year around.  Setting and attaining your financial goals will be made that much easier.

Hourly Checks - when I worked in sales we had a YTD Sales Goal each day. We would break down sales each hour by time and check the financial progress each hour, on the hour. This can really help to let you know how much you need to make in order to make your goal, go above and beyond it, or if you have beat your goal or not.

Wednesday, July 14, 2010

Business 101: Part IVb - Outside Gal: Keeping the Juices Flowing

Hi All,

As the outside gal, creativity is your strong point. Sometimes, tho, we all run into a brick wall. One way to battle this is to clear the cobwebs from your work space. It really gives you a fresh start. (Personally I find that it's difficult for me to create when my space it too messy or too clean. I like it *just right* I like to see what I have and what I can work with.)

I also feel that going through your supplies every now and again when you feel blocked can really be beneficial.  This is where the "Inside Gal" can come in handy. Clear off your design table. What do you have? Take inventory of your supplies. (Jot down price if you have it available.) What do you use on a constant basis? What have you *not* used in the last six months? Generally if you don't use it in six months, you won't ever use it. (Side note: this works for just about everything you own - wardrobe, personal effects, books, etc.) So? Sell what you don't use! Recently I sold a Making Memories Slice die cutting machine that I hadn't used since I purchased my Cricut. I discounted the machine and sold it in a bundle with some design disks on Craigslist. I was able to get cash for it, which I ultimately was able to put towards my business to purchase things that I *will* use.

So clean out that clutter! You'll feel better, you might make some cash in doing so - AND you will be able to see and work with what you have, thereby creating more of a flow of the creative energy.

Business 101: Party IVa - Outside Gal - Meetings with Professional Clients

Hi All,

The Outside Gal has a lot to offer. This position is responsible for a number of different things, such as procuring new jobs, making sales, schmoozing with customers or future customers, and being creative. Usually this person will be the creative driving force behind the company.

Outside Gal

Keep a binder or a sketch journal of ideas. Take it with you wherever you go - you never know when inspiration is going to hit. I also like to keep a point and shoot camera on me as well, if I can manage it.

1.  Make some mock ups of your product and have a protective but nice presentation for it. Figure your total cost and profit on these items. Would you be willing and able to produce tripples or sets of these, if asked to?

2.  Decide on the types of established businesses and locations you think you'd like to do business with. Do some research on these companies. Who is the owner? What is the background information for this company? Get a telephone number and address.

3.  Give 'em a call. Ask for the owner - explain who you are and what you do and that you'd like to set an appointment to drop by and show some samples. Often times if you say that you're a local artist looking to gain support in your community, business owners will respond positively and be more likely to support you and your work.  Be pleasant, but firm. It is easy for people to just say no and hang up on the phone, so do not try to sell over the phone. Set a date and time.

4.  Be prepared. Bring business cards, a pad of paper and pens. Know your product, it's cost, profit, and the type of sales you would be interested in. Usually established companies prefer to purchase your product outright, paying you by check. Are you willing to accept a business check? BEWARE of consignment offers! Consignment means that you leave your product at the location, and if it sells you get the profit and the business gets a cut. This is dangerous because you risk damage to your product, among other things. You have to go in and check up on it every couple of days, which can be a hassle if you are not in the area or can't make it in every couple of days.

5.  Ask questions - what are the business' needs? What sells best at the location currently? Can you provide a better product at a better value to the business owner? Make your products fit the needs of the business. How much traffic does the business run? Listen to the business owner's needs and concerns and address them appropriately.

6.  Demonstrate your product! This is the deal breaker! Really wow them! Your product should have variety and a wide range, but still have a consistant style that is all your own.

7. Take notes if you can.

8. What if they can't/don't/are hesitant to purchase currently? Being flexible with price can go a long way. One technique is to jack up the price of your goods before you go into the meeting. Then, when price is being negotiated, or price is a make-it-or-break-it issue, offer a discount. It makes you look good AND still pays your cost and profit.  This technique is particularly useful when you're dealing with asians or middle eastern shop owners, who culturally, will haggle and barter and EXPECT to be given a deal. (No offense to anyone intended!)

9. Get contact information - phone number, e-mail, mailing address.  Give them your card. A few times I've had business owners decline to purchase simply because of funding issues. This doesn't mean that they are not interested! One of my best customers contacted me after she said she couldn't afford to purchase and wanted me to come in and do a monthly table show! WHAT A DEAL! It worked out better than if I had placed items in her shop!

10. Set another meeting - if they don't buy, set another meeting for a few weeks down the road.

11. After the meeting write down everything you can remember about the meeting - likes, dislikes, needs, desires, wants, preferances and traffic. Notice decor or feel of the location.

12. Send a Thank You note. People don't have to take time out of their day to meet with you. This is the polite, professional and proper thing to do. Add a personal touch, but keep it business-oriented and professional. Include a business card and maybe a coupon.

13. Follow up and stay in contact - contact is key. Shoot them an e-mail after a few days to keep your items in their mind. Be persistant, but do not stalk or be pushy. A pushy sales person is a sales person without a technique. (For more info on sales techniques, see the FABG entry.)

Sunday, July 11, 2010

Business 101 - Part III - Inside Gal

Hi All,

To every successful business structure there is a pattern: an inside gal and and outside gal. That is, there is someone who handles the books and money aspect of things, and someone who creates as well as goes and actively seeks customers, business opportunities, and generally schmoozes with possible future customers, thereby creating the driving outside force of sales.  Often times, as a small business owner, we find ourselves having to juggle these two hats, and most of the time having to stack them on top of each other.

Inside Gal
First things first, organization is KEY! Set up a seperate folder system or drive on you computer specifically for your business. Procure Microsoft Office Excel; and a tabbed and labeled binder.

The Binder

In this binder you should keep the following:

1.  Any formation documents for your company - if you are large enough to have formed your business with the state, you will have these. Even if you are just a D/B/A, you should consider drafting these documents. It helps to solidify the fact that you are an operating business in your own mind, as well as clearly define to yourself who you are and the services you provide. Guidlines for drafting the Certificate of Formation can be obtained from the Secretary of State.

2.  Any renewal information or name change information - Again, not *necessary* for small D/B/A's, but it's nice to have.

3.  Standard Forms - If you have forms such as an e-mail request form for craft shows or a standard Model Release, you should keep the hard copy here.

4.  Receipts and Pricing - As the Inside Gal, it is your job to know the cost of everything.  Keep your receipts so that you can keep pristine records. If you paid five dollars for a bag of thirty beads, but you only used five of them on a project, do the math to see how much money you spent to make your entire piece. Do the math for all supplies involved. When figuring your price, do not count for the time of making your piece - of actual "crafting". (This is where a lot of people go wrong.) Your pricing should be based strictly upon the cost - the money you expended to purchase supplies. After you have figured the price of each item you use, add it all together. Double your total, and, if you still think you could sell it for more, then list it as such. (This pricing technique takes into consideration listing fees, paypal fees, promotional purchases and renewal purchases for working online.)

Don't forget to keep your shipping rates rational for the piece you are mailing. This is an extra expense to your buyer, and if it is unreasonable, it can break the deal.  If you are doing a craft show, simply add the cost of shipping into each piece - after all, you hauled all of it to the show!

5. Business Plan -  Basically, this is who you are, what you are doing, and how you intent to go about it. If you ever expect to get a loan for your small business or have investors, it is typical that the people you would go to for such funds will require a business plan.  Since this, in itself, presents such a challenge for some business owners, click here to view some great tips re: business plans.

6.  Design Ideas - This is optional. I keep mine in a separate binder as well as keeping a sketching journal.

7.  Receipts and Convos for Your Transactions - I like to keep detailed records of what and who I sell to, their likes, dislikes, and any conversations I've had with my client. I take notes and write down everything I can remember about them, and then I file these in my binder. It's nice because Etsy records all your sales so it's easy to just print them off and file them away.

***

EXCEL/BOOKKEEPING
Draft a worksheet in Excel that lists all of your items, their cost, what and when you listed them, how much you listed them for, the discounts offered, who and when you sold them to (address included) and the final profit on your pieces. Fill this sheet in as you go. With this information you can see who and where you are selling to and how often. It also offers all your information at a quick glance. Additionally, you can take this information and plot a line graph to see the flow of your sales.  This becomes important for the following years with regards to YTD sales and setting goals, which I will discuss in following posts.

Hope you found this helpful!

Saturday, July 10, 2010

New Gift Set!

Hi Everyone!

Remember the "bundling" topic I posted a while ago? (Gift Sets) Well, I took my own advice! Check it my new gift set here.

Later!

Tuesday, July 6, 2010

Photographing Your Projects

Hi All,

I hope you all had a safe and wonderufl fourth of July!

Stunning photographs can be hard, but you don't need a fancy uber expensive camera to get premium photographs (I know - I'm a photographer!) You don't even have to hire a professional photographer! All you need is: 1. A nice quality point-and-shoot camera with a macro feature; and 2. knowledge of light and how to manipulate it. (Also, you don't need an expensive program like Adobe Photoshop, either. I like to use a free program called Irfanview to play with my photographs - it's simple and easy.)

Let's talk about light. Leonard da Vinci spent years studying light. He would drape fabric and draw what he saw and how the light played off of the fabric and where the shadows and folds occurred. Eventually, da Vinci's study of light led to a style of shading technique called chiaroscuro, which allowed da Vinci to paint a broader range of light than he actually saw. This, in turn, provided da Vinci and his viewer with a more 3-D shape, more realistic in depth and tone.

La Belle Ferronniere,
Leonardo da Vinci, 1490-95.

How does this effect your etsy shop photographs? The study of light and how it plays off of your pieces is important because photography is painting with light. Spend a little time figuring out how your setup and the light plays off of your subject and which side it is best lit from - front, back, either side, or top. Take a LOT of photographs of each subject. You'll never get the shot you really want in only a few snaps,and it's better to have more to choose from than not enough. It's key to understand what your light source is, where it is in relation to your piece; and when - as in, time of day, if you're using natural light. (I prefer to photograph between noon - four pm, but the sun is the strongest from noon to two pm.)

Natural light is best to photograph your projects, art, jewelry or otherwise. Sometimes a bright overcast is better because the clouds filter the light and project it evenly on the subject. Direct sunlight will also make your jewelry sparkle! Although, sometimes it can be beneficial to not photograph in super bright direct light, it depends on the situation. Play with it a little bit and see what works for you.

Typically I like to take the piece outside and set it up on a table or railing and photograph it there. Other times, if I can't take it outside, I'll set the card up right next to a window where I get the most natural light. In these cases I like to use a simple, plain bright background that contrasts with the card to make the colors pop.

If you decide to photograph inside, using a non-natural light, you may be disappointed with the results. You may get a yellowish tinge and will have to drastically lighten your photo to get the desired results.

[Inside, yucky lighting]

You *can*, however, purchase light bulbs that immitate natural light and may be suitable for photography - known as Full Spectrum Light Bulbs, they supposedly help with Seasonal Affective Disorder and Depression as well.

Here are a few more examples of different lighting scenarios:

[Inside, direct natural light with background - early afternoon]


[Outside, direct natural light - mid day]


[Outside, direct natural light, late in the afternoon.]
Notice the shadow in back, as opposed to the previous photo. The lighting is also softer.

If you can't photograph outside, there are several options that are open to you. One is a small lightbox that you can purchase (or make yourself) for just this purpose. Often times the lights come with these lightbox studios when u purchase them, but you can also use bright household swivel study desk lamps, or purchase a light at JoAnn's. (I've seen some lights specifically for beading or needlework that look like they'd be good.) Portable studios run anywhere from $35.00 to $350.00 - it really depends on how much money you want to spend.
[portable studio]


[My result from my portable studio]
If the light box is the type of set up you prefer, but you don't want to spend money, I have known people to make their own. This is a simple, easy and cost-effective way to start off getting high quality photographs.  See the Light Box Tutorial here.

There is also another way to photograph. You can take a box and a large background paper (some people like to use printed background papers to make their pieces pop, but I find the print can be distracting and fussy) and clamp the paper to the box and the top. Then place your piece in front of the box with the paper. Use a desk lamp with a swivel arm to light the piece and snap away! This is how Kristina Werner lights and photographs her cards.



Try to photograph in the same location at a similar time each time you photograph. Take a lot of pictures of a lot of different pieces all at once. I have found that this really helps the overall cohesiveness of the shop.  It adds the same feeling to each of the photos and ties the shop together.

I hope you all enjoyed this. Please let me know if you have any questions.
Till next time!

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