I think a lot of crafts businesses tend to hit one of two ceilings when trying to grow – you either hit a marketing ceiling or a production ceiling.

Because the solutions to breaking beyond those ceilings are drastically different, it’s important to recognize which one you’re running into in order to move your business beyond its current stage.

The marketing ceiling

Do you find yourself with more product than you know what to do with?  Are you drowning in materials?  Do you constantly make, make, make but are frustrated because you can’t seem to sell, sell, sell?

If this is the case, that inventory exceeds demand, then you’ve hit a marketing ceiling.  When you hit a marketing ceiling, it means you either aren’t doing enough marketing, or the “marketing” you are doing is ineffective.

The first thing you need to recognize is that the solution to moving beyond a marketing solution is not more making.  I think a lot of makers, particularly those who sell on Etsy, fall into the “make and list” school of marketing.  You think, “if I just keep making more stuff, and I just keep listing more stuff, then eventually it will start to sell.”

But listing stuff online (or taking piles of stuff to a craft show) is not an effective marketing strategy.  (I would argue that it’s not even marketing at all.)

So if you find yourself with more inventory than sales, I challenge you to put down your tools for a week and focus on your marketing plan.

The production ceiling

Do you find that you can never make enough products to keep up with demand?  Do you go to craft shows and sell out consistently?  Do you have a long lead time for products in your online shop?

If so, then you’ve hit a production ceiling.  Your business can’t grow because you physically cannot produce anymore product, which means you can’t bring in any more revenue.

Dealing with a production ceiling actually has two solutions.

The first is to raise your prices.  I’m constantly amazed by the number of clients who tell me that they are so stressed out, they spend hours and hours making product, only to sell out at every craft show they do.  When I ask them if they’ve considered raising their prices, most haven’t even considered it.

Raising your prices in this scenario is actually good old-fashioned supply and demand economics.  If your production (the supply) can’t keep up with demand, then the market dictates that you raise your prices.

Yes, you might sell less products when you raise your prices.  But you can potentially earn the same income (or more) with less work, so the tradeoff is worth it.

However, there are times where your prices seem to be working.  Where you do make a comfortable profit from each piece, and raising prices isn’t the right solution.

In that case, you’ll need to hire additional help with production to break through the ceiling.  Help with production can take many forms, from hiring independent contractors to do piecework to hiring an employee that may handle more aspects of the production process.

I was incredibly humbled to watch this video interview that Tara recently conducted with Julie Boyles of JJBoyles.  (I’ve embedded the video below so that you can watch as well.)

Can Rob Kalin Scale Etsy? Tara Gentile interviews Julie Boyles from tara gentile on Vimeo.

In the video, Julie talks about scaling her business by working with independent contractors.  She mentions that when she was trying to figure out how to do this, there really weren’t resources to help her get started.

Which made me realize this is an area where I’ve been lacking on Crafting an MBA.  I think I do a good job of helping those struggling with the marketing ceiling, but I don’t talk enough about how to scale production for your business.

To be fair, I talk about it less because it’s something I’m only now figuring out for my own business.  In January, I hired a 30-hour a week employee to manage production, and we’re finally settling into a rhythm I’m comfortable with.  But it has still left me with a lot of uncertainty about the direction of my jewelry business and how I want it to grow.

I’m incredibly interested in the topic of scaling production for many reasons, top among them is that I am interested in how crafts businesses can create meaningful employment and help improve the economy.  I am also interested in learning how other crafts businesses make the leap from the “one person at home” model to a full-scale production studio, because this is the kind of business I hope to build.

I also want to make sure I’m serving the needs of my audience here on Crafting an MBA.  To that end, I have a few questions for you.  Which ceiling is your business running into – marketing or production?  And if it is production, where are you stuck when it comes to bringing in or seeking outside help?  And finally, what dreams do you have for your business?  Are you happy as a solopreneur or do you have dreams of a bigger craft empire?

I’d really appreciate it if you could take a minute to answer these questions in the comments, or you can email me your thoughts at megan(at)craftmba.com.

In the article, he calls for a return to Labor Day’s roots:

“There’s an opportunity on Labor Day to raise awareness that American workers still make things – really cool things.”

And I think nowhere is this more true than the craft and indie design movement.  We are the future of manufacturing in the US.  (Or so I like to think.)

So on Labor Day, I’d encourage all of us (whether you’re in the US in or not) to think about how we can spread the word about what we’re doing.  How we can show people that some of us do still make things, that making things brings value to our society, and that it’s worth supporting with your dollars?

Perhaps we can use Labor Day as the kick-off to stop preaching to the choir and start marketing outside our niche.

I’d love to hear what you think.  Check out the article and share your thoughts in the comments – as the new face of labor in the US, what can we do to spread the word?

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On a somewhat related note, I’ll be speaking at the next Ignite Baltimore on Craft as Economic Catalyst.  I’ve got 5 minutes and 20 slides to convince people that supporting craft-based businesses is good for our economy and our communities.  If you’re in the Baltimore area on September 30, I’d love to see you there!

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And one more little reminder.  The Marketing for Makers (and designers, crafters, and artists too) e-course starts next week.  There are still a few spots left, so head on over to marketingformakers.com to sign up now!

You gotta spend money to make money.

And while this is true, it’s actually much more complicated than that.  It’s not just about spending money.  It’s about understanding when and where to spend money to boost your profits.  When it comes to making a profit for your business, it’s not so much about about mindful spending, but about strategic spending.

Those of you who are trying to make a profit by not spending on the business, listen up!  Part of embracing a culture of profit is understanding that sometimes you have to make an investment in your business.

When money is tight, it can be tough to know where to spend money and where to scrimp, so I’ve put together some guidelines for strategic spending to boost your profits:

Rule #1: Get help for the things you don’t have to do yourself.

Time is money.  Yet for some reason, we have a hard time spending money when it could save us a lot of time.  (And more time was the number one response when I asked what do you need to grow your business.)  But if you take just one thing from this post, let it be this:

The fastest way to grow your business is to stop doing all the things that someone else could do as well as your better than you.

And the way to do this is to spend money to hire good people.

I’m actually making this my mantra for the rest of the year.  I’m looking for all the opportunities to hire someone to do the things I don’t have to do so that I have more time to focus on doing the things I do best.  Even though I have a basic understanding of HTML and CSS, I let Tara handle the redesign on Crafting an MBA.  And I’m going to have her redesign my jewelry business site too.  (She just doesn’t know it yet.)

And you’d be surprised at all the things you think only I can do this, when it fact there’s probably someone out there that can do it equally well.  I make most of my jewelry by welding.  And for a long time I thought, “I’ve spent years developing this skill, I can never have anyone else work on my products, no one can weld as well as I can.”  And while it’s true that most people (even most trained jewelers) can’t weld as well as I can, turns out there are some people who can.  One just happens to be one of my students, so I hire her to do piecework for me.  (With the eventual goal of being able to bring her on as a more permanent fixture of Team Megan Auman.)  And I’m looking into hiring a Virtual Assistant to handle some of the parts of my business I don’t do well and don’t enjoy.  (Like managing an email marketing campaign for megan auman and cozy/cuff.)

And hiring someone doesn’t have to be a huge investment.  Virtual Assistants and independent contractors can enable you to bring in help on a per project basis or for a few hours a week as needed.  Giving yourself permission to outsource aspects of your business can free you up to focus on doing what you do best – being the creative visionary that drives your business.  And that is money well spent.

Rule #2: Don’t spend money accumulating more supplies and materials.

My dad owns his own machine shop, so I practically grew up understanding the principles of lean manufacturing.  But it’s something that we don’t talk about much in the crafts community.  Likely because most crafters don’t view themselves as manufacturers.  (Even though, as a friend of mine likes to say, “Manufacturing is just a fancy word for making.”)  Lean manufacturing is the idea that you keep supplies and inventory to a minimum, ordering and producing in such a way that you never have much excess material or inventory on hand.

And boy, does this go against the nature of most crafters.  We love the thrill of the hunt.  Finding that perfect material that we just might use someday.  Plenty of makers who wouldn’t dream of spending money to hire a web designer or PR agent will trot out the “gotta spend money to make money” statement to justify buying more supplies or materials.  There’s a reason the biggest sellers on Etsy are the supply people.

But the accumulation of more and more materials is probably one of the biggest killers of your bottom line.  Those piles of supplies and boxes of inventory are really just money that you can’t use to propel the rest of your business forward.  If you feel the need to spend money on materials, focus that money on buying quality or unique materials that set your products apart.  But that money spent on just buying more?  That could be put to better use on a fantastic website, a new marketing campaign, or a professional looking wholesale catalog.

Rule #3:  Focus on your primary revenue stream.  (And be consistent.)

I am a huge fan of pursuing multiple revenue streams.  But pursuing multiple revenue streams doesn’t mean each area has to bring in the same amount of money for your business.  And it definitely does not mean you have to spend evenly across each revenue stream. If you’ve got a limited budget, you’ll get the most bang for your buck by focusing that money on one primary area of your business.

If you’re primary focus is online sales, invest your money in a kick-ass website, a consistent brand identity, high quality photography, a brilliant copywriter, and a marketing or SEO expert to help you drive traffic.  If you love craft shows, invest your dollars in marketing and advertising in the areas where  you participate in shows.  If wholesale is your primary goal, don’t be afraid to invest in attending that big trade show or producing a high-caliber catalog.

Pick one revenue stream that you really want to see take off, and decide where you can spend money to drive traffic and sales.  Then give yourself a few months of focus (and cash) on that one revenue stream.  Stay the course, because most results aren’t instant.  If you keep jumping from one area to another, you’ll never build momentum.

And even though you’re focusing on one revenue stream, at some point you can usually roll out the efforts from that spending to your other revenue streams.  A consistent brand identity can carry over from your online store to your craft show booth.  And a fantastic website and savvy PR agent will attract not only retail customers, but potential wholesale accounts as well.

The key to creating profit in your business is understanding when to drive growth, and when to save to keep cash in the bank.  But to truly embrace the culture of profit, you have to become comfortable with the fact that sometimes you must spend money in order for your business to grow.

How strategic are you with your business spending?  Where do you scrimp and where do you spend?

But that same DIY spirit may now be impeding the growth of your business.

If you’re maxed out on time but want to see your business grow, it’s time to considering outsourcing.  Now, I know outsourcing has been a contentious issue here on Crafting an MBA.  But I’m not just talking about outsourcing production.  There are plenty of other aspects of your business you can outsource in order to help your business grow.  Here are a few to consider:

• Graphic design. Whether it’s designing a new promotional postcard to creating an entire branding and visual identity strategy, the right graphic designer can help take your business to the next level.  Projecting a professional image can go a long way towards making customers and press pay more attention to you and your business.
• Web design. If you aren’t comfortable with HTML, is it really worth your time to learn just to build your own website?  And sure, there are plenty of templates out there you can drop your images into, but then your website will look like, well, everyone else’s.  Your website is still your calling card to the world, and having a distinctive, professional looking website can do wonders for your business.
• Photography. Yes, it’s pretty easy to take shots of your newest items to sell on Etsy.  But what about hiring a pro to take some fantastic images of your products in use – clothing and jewelry on models, ceramics and paintings in the home.  These are images that you (or your graphic designer) can use to put together an impressive catalog, website, or other promo materials.
• Public relations. If you goal is mega magazine coverage, you might want to look into hiring a PR rep.  There are many ways to keep plugging away on your own to try to get press, but a PR rep comes with an established set of contacts at magazines and major media websites.  They’ll introduce your work to editors it might have taken you years to crack.
• Sales. Are you limited in the amount of time you can spend on the road?  Or do you find it difficult to sell your own products?  A sales rep might be a great way to help get your products into stores.  As with a PR rep, they often come with an established set of contacts.  Your choice in sales reps runs from independent reps to large rep groups with established showrooms, so be sure to find one that meets your needs.
• Bookkeeping and accounting. Understanding your numbers is key to generating growth, but if you aren’t good in that area, it can be worth it to bring in a little extra help.  (Can’t afford a bookkeeper – check out Outright.  I’ve been using it to track my business finances, and have to say I’m loving it.)  I really think that any serious business should have an accountant.  You don’t have the time or knowledge to know all the tax laws, and that little bit of money you save by doing it yourself might actually be costing you much more in the long run.
• Production. Outsourcing production doesn’t have to mean sending work overseas, or even having things produced by machine.  Perhaps you can hire another maker to do piecework for you.  It’s a great opportunity for someone whose business isn’t that far along to generate some extra income.  (I hire someone to do a lot of my chain making for me.)  And it can free you up to work on more complex pieces and new designs.

When you’re thinking about outsourcing, the idea is to ask yourself, is there someone who could do this better or more efficiently than I could?  By outsourcing tasks you aren’t that interested in or aren’t that good at, you are freeing yourself to do the things that will really help grow your business.  (Like creating new designs.)

Once you’ve made the decision to outsource, you’ll need to do your homework to find the service provider that’s a good fit for you.  For things like graphic and web designers, PR reps, and accountants, ask other maker’s for their suggestions. (Most makers will hold some things, like manufacturers, pretty close to the vest.)  When interviewing a potential contractor, be sure to ask for examples of their previous work and a list of other clients as references.  For PR and sales reps, you’ll want to know who they currently represent so that you can see how your line fits in.  And anytime you start work with a new vendor, be sure to get a contract up front that clearly outlines expectations, timelines, and fees.

If you can’t find any more hours in the day to work on your business, but you’d like to see it grow, outsourcing might just be the solution for you.

You’ll find more articles on growth all week long here on CMBA and over on Scoutie Girl.

Hi, my name is Emma Henderson and my company is called Showpony. I design fun accessories and home wares made from organic and fair trade cotton. Although all of my designs start off being hand made it is my aim to outsource more and more of the production of my products to fair trade organisations in India and elsewhere. I thought it might be helpful to share some of my experiences of making the transition, from in house production to outsourcing. I hope to show that with a bit of planning and determination you can start small but grow when necessary.

I’m sure that there are some of you who will love making everything yourself and revel in the delight of personally hand crafting every item you sell. If this is you I think you’re amazing! For me though it’s the designing where I get a real buzz. I love to make the first few samples and refine the design until it’s just as I want it. But beyond that I’d rather design more, and make less.

When I started Showpony I was determined to use organic fabrics and was becoming increasingly interested in working with fair trade suppliers, so I did lots of research into how I could make this possible. I got loads of samples, found out what different companies could offer, and what services they provided. There were fabric suppliers, printers, dyers, and stitchers. I found out costs, minimum orders, and got shipping estimates from suppliers all over the world, all in order to gain as much of an insight into the industry as I could.

However back in reality I was designing a new range of bags (my Vintage Shoppers) and I didn’t have nearly enough money to have them produced as I would have liked. The minimum orders were just too high to risk, so I did the only thing I could, I ordered the minimum quantity of my favourite fabric from all the samples, printed the designs onto it and stitched up the bags by hand.

What I realised then was that although I’d done lots of research into production and manufacture I wasn’t very clued up on how I was actually going to sell my products, so I did all I could think of. I took photographs and uploaded them to my Etsy shop, and this is where they stayed for almost 2 months. Suddenly though thanks to a few large blogs posting about them, I did start to get orders, a trickle at first but then more and more, until before I knew it I was selling, relisting, sewing like mad, taking wholesale enquires and starting to panic about how to meet the demand.

However this is where my research really paid off, as soon as I could meet the minimum order I was able to look through my samples and quickly order some blank bags, and I began printing directly onto them. Sales continued to grow and a couple of months after this I was delighted to be the featured seller on Etsy. Once again I saw a huge spike in sales and with Christmas looming I started to think about moving to the next step up the production ladder.

Thankfully, having done my research I knew that the company I was already buying the blank bags from could arrange to have them printed for me in a fair trade co-operative in India, and I had priced my work accordingly to these quotes. So I sent off my designs and put in an order for the minimum quantity. Since then I’ve ordered lots more and am now developing the bags again with a different producer in India.

Building my production up this way had obvious advantages. I was able to keep control of my finances by only ordering more materials when I could afford it and when I was sure there was demand. By being able to grow the production at my own speed, and having a clear idea about my next steps I was able to fulfil orders and even take on some larger accounts with distributors.

But working this way can have its disadvantages.  When I started printing the designs onto blank bags I was able to reduce my prices quite dramatically because I wasn’t spending so long making all the bags from scratch but while this was good for the majority of buyers some who had purchased the more expensive bags only a few weeks earlier were not so pleased. I’m sure though that with better explanations of my processes this sort of upset could have been avoided. Another issue was that the look of the bags changed a bit with each stage. So on some occasions I was getting press from blogs who had old images that didn’t quite match what I was now selling in my shop.

These problems are understandable as a product develops throughout its lifespan and for me any negative effects have been far outweighed by being able to get a product manufactured in manageable stages.

I’ve repeated this process with subsequent products and its been really effective. With my tea towels for example, I’m generally able to keep up with orders printing them myself onto blank tea towels. But when a large chain store contacted me about placing a big order I knew exactly where to go for manufacture, this meant that I could fulfil the order in the time scales they wanted and guarantee quality as I’d already had samples printed by them.

My advice would be even if you are just starting out with a new product it really pays to have a plan for how you can gradually increase production of that product this will help you meet demand and keep your profits up.

Finding these manufacturers is not easy – especially if like me you want to limit your search to organic suppliers and fair trade producers but persistence does pay off, and what I always try to remember is that if it was really easy everybody would be doing it.

I’ve also compiled a list of resources worth checking out if you are thinking about looking for a manufacturer for some or all of your processes:

If you’re unfamiliar with the available processes and techniques, I recommend you check out several books to familiarize yourself with what’s available.  Two of my favorites are Making It: Manufacturing Techniques for Product Design by Chris Lefteri and Manufacturing Processes for Design Professionals by Rob Thompson.  Both cover a wide range of techniques, and showcase products that can help inspire your own design process.  Note: Both links are Amazon affiliate links, but I wouldn’t recommend them if I didn’t think they were fantastic resources!

If you’re trying to hunt down a manufacturer, I would recommend making a stop on ThomasNet.  Its an extremely comprehensive resource for manufacturers and suppliers.

More and more manufacturers are adding a web component to their businesses that make it easy to upload a digital file and order parts.  A few to check out include eMachineShop, Big Blue Saw, Redeye, and Quickparts.

As manufacturing becomes more personalized and smaller scale, there starts to be more overlap with traditional craft fields.  Two recent magazine articles sum up this trend:

• “The New Industrial Revolution” in Wired magazine looks at the rise of DIY manufacturing and how the way computers aided the spread of information now transfers to the creation of physical goods.
• The current issue of Make magazine features a special section called “Your Desktop Factory” which looks at ways you can bring 3D manufacturing into your own home or studio.

I’m curious to know if any of my readers have looked into having all or part of a process outsourced? Have you had any experiences looking for a manufacturer?  Is this something you are considering for the future?  Please read the post over at Design*Sponge and let me know if you have any questions!