business

September/October brings change of season, and fresh starts and frivolity and seriousness too. So for a break from whipup realtime I am introducing a few weeks of guest bloggers to liven up your crafty experience. To bring you something fresh, and hopefully invigorate you to make and do and be and think! Its going to be a fun few weeks so come along for the ride.

Today I am really happy to welcome Nancy Langdon, co-author of Sewing Clothes Kids Love (flickr group here) (which we loved and reviewed). Nancy is also the designer behind Fledge and studioTANTRUM, North American distributor for Farbenmix, mother, small business owner and somewhat argumentative wife of the Professor. She does not have an MBA, but she keeps a diagram of Michael Porter’s Five Forces: A Model for Industry Analysis on her inspiration board under her sketches, magazine clippings and fabric scraps. Nancy today, along with a thoughtful and thought provoking essay on why the stay-at-home work-from-crafter has the same experience as someone with a MBA degree, has generously provided also has a free e-book with a pattern and instructions for making a newsboy cap from scraps – she explains more below.

True story: My husband and I were having one of those “discussions”. Nonsensical as it was and who knows how it started, but I recall it ending up here (maybe you are familiar with this marital back-and-forth): His work was more important than mine, while I am “just” the stay-at-home parent to preschool children, plus he was the president of his own company. Some points I had trouble debating, but that last one I could handle: With my computer and a credit card number, I went online and registered my own corporation. Just like that, I was president of my own company, too, thank you very much.

Now that I had a corporation in my name, I might as well do something with it. That bit of passive-aggressiveness has since turned into an active business. Several years later, a nice little sewing pattern designing and distribution gig, and a best-selling book under my belt, I am some sort of sewing muck-a-muck. But with that company, I am also a small business owner. And still a full-time stay-at-home parent: team manager, soccer referee, art education docent, playdate hostess, community activist and all the rest of it.

A 17 February Wall Street Journal article chronicling the difficulties some people were having reentering the workforce after many years at home has been on my mind lately. This article cites U.S. government research indicating that over 80% of the 2.3 million college-educated stay-at-home moms with children under 18 would like to return to the workplace at some time. For some of these parents, however, after a decade or more of being out of the loop, these otherwise highly qualified professionals were unfamiliar with the way business was being done today.

Confidence with emailing, social networking, word processing, accounting software is expected of all sorts of professionals: Lawyers, doctors, salespeople and CEOs alike. Knowing that the hip bone connects to the knee bone is not enough: Physicians need to understand that patients, through the Internet, are better than ever informed (and misinformed) of the latest research and treatments. Customers and clients talk openly about their experiences online. A single eye-roll from a disengaged salesperson can lead to a negative Yelp! review in minutes. Attorneys at law, who could once depend on a comfortable income just passing along information, now realize that Googling works for most people in answering basic legal questions and, therefore, their service scope needs to be more individualized. Secretaries have gone the way of white gloves and crinolines, and today’s Administrative Assistant is about as likely to type and fax a letter in the age of email as he would be to take a horse and buggy to work.

I will venture that if more of these stay-at-home parents had explored their crafty sides while undertaking the very important work of rearing children, they would be well equipped to hit the ground running in today’s workplace. The Internet has permitted crafters to learn, inform others and show off their handiwork. Very quickly, an “Atta girl!” or a “How’d you do that?” can turn into a business opportunity. Enough positive responses on an online forum, a flickr group or WhipUp.net article, can light the fire under the crafty crafter and a personal pastime evolves into a commercial enterprise. That was my experience. And I have seen it happen again and again. I’ll bet it happened to some of you. At the risk of singing to the choir, I’d like show you how a bit of crafting can become a homemade MBA.

What starts out as a few sales on Ebay to pay for craft supplies morphs into an Etsy shop with a loyal customer base. And it becomes time to be a big-girl businesswoman. So the journey begins. And these are the things you will need to appreciate along the way:

- An understanding of the determinants of group behaviors and cultures in an online, interconnected world: Reviews on forums and blogs create instant feedback loops that the business-minded crafter better be on top of. Because of the feedback functions of Internet commerce, selling crafters are prompted to offer excellent service and quick communication. The Internet is instantly global, so you’ll need to be aware of all the things a world wide marketplace requires: Sensitivity to cultures, currency risks and language usage issues (I once spotted a cute pencil case on Etsy with a special place for “rubbers”, the British English word for “erasers”. Yeah, awkward.) Happy customers talk and word of your good work gets out. But unhappy customers talk, too. In fact, unhappy customers tend to talk more. Some may call the Internet the Virtual World, but it is based on the real world, and your real world values will surface. My experience? It has probably been about five years since I left one individual with less than a warm and fuzzy feeling. And, oh yes, that individual is still making her opinion of me and my work known to as many people as possible. If I’d only ignored the taunts back then or used more winkie emoticons ;-) Hatchets just don’t stay buried on the Internet, do they? Smilies and winkies all around :-) ;-)

- Establishment of productive relationships with suppliers, employees and strategic partners: As much as you may be running your own creative endeavor, working in virtual teams and in networked communities is essential to your success. On my Streetcar called Designer, I have relied greatly on the kindness of strangers (my apologies to Tennessee Williams). Collaboration with crafters around the globe is possible and probable. Make-it-or-break-it relationships are built with suppliers, collaborators and customers. More than that, one-to-one relationships with early adopters and opinion-makers is accessible to all, so better learn to take advantage of all that is available.

- Creation of a mission and vision and aligning and motivating self, suppliers, customers and partners behind that vision: My mission is this: “Have fun. Make Money. Do Good. Give Back.” I have found similarly minded others, and others have found me similarly minded: We find mutual benefits and our goals align naturally, organically. (I interrupt this blog post for a quick shout-out to Sabine Pollehn and the team at Farbenmix: Thank YOU!).

- A bit of Marketing: The entrepreneurial crafter will want to consider her how her product is presented: That’s called merchandizing. She’ll turn to flickr and learn how to photograph her products more appealingly. Using email blasts, Facebook and blog postings you get the word out. Using online polls and discussions, you gauge customer wants and needs. Pulling actionable information from the responses you gather is part and parcel for marketing science. Definition of a marketing mix and implement measures for determining return on advertising investment: The craftpreneur will need to get the word out: marketing and advertising.

- Hand-in-hand with marketing is your PR: You are asked to do online interviews and guest posts (Howdy! Whipper Uppers!). You buy an ad here and there on different blogs and forums. There is a famous quote that goes “It pays to advertise”. There is also a famous quote by turn-of-the-last-century department store merchant John Wanamaker that goes, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. With a bit of Internet savvy, there are ways to see how effective your online advertising strategies are. There are bits of Internet Big–Brother magic, especially on Yahoo! and Google, that marketers use to trace the paths customers use to make purchases. We all dislike Spam, Internet and otherwise: But if Spam is served from someone I know and trust and to my taste, I might just bite.

- Identification of niche and mass opportunities and their ROI: I cannot think of a community that reacts faster to new trends and current events: Are Japanese “bento” lunches all the rage at your elementary school? Etsy has the one-of-a-kind handmade bag no one else does. Silly Bandz traveling up your children’s arms? Silly Bandz rolls and holders are found only on Etsy. Hurricane Katrina, Haitian earthquakes and, more recently, the floods in Pakistan have Etsy and Ebay crafters raising money to do good. Again and again and again, a lonely crafter will touch on the greater Zeitgeist and the mass culture soon adopts the look, the creation, the cause. I’ve done it. Sabine Pollehn of Farbenmix has done it. Many, many of you have, too. A focus on return on investment will move the crafter to successful business owner. Development of a brand, brand identity and associations.

- Protect intellectual property: Although many of us have nudged the Zeitgeist and been at the genesis of a new trend, most of us have not reaped the lion’s share of the benefits from our creative inspiration, have we? The time comes when you achieve enough acclaim that it makes sense for you to copyright your work and register trademarks for your commercial identifiers. Perhaps in your creative meanderings, you come up with something so novel, that you should apply for a patent. There’s a fine line between sharing a bit of your sandwich and someone eating off your plate, so better stick a fork in it before it’s all gone.

- Evaluation of economic conditions: Maybe the regulatory environment changes and new regulations throw a wrench in your works. Things like CPSIA, which casts a wide regulatory net over all childrens’ products, including handmade products, may require you to organize with others for political change. Without knowing what to call it, you are battling what the business guru Michael Porter called “Barriers to Entry.” Depending on the economic climate of the moment, you will adjust the focus on the your product to be sensitive it its value, luxury, exclusivity and/or environmental friendliness.

- Accounting and Management: As you chug along, craft and sell, craft and sell, pretty soon you’ll encounter a whole exciting world of admin. Admin, admin, admin. If you are taking in money, you will need to keep the IRS well-apprised of your activities, your bookkeeping better be by the book. You may also need to consider incorporating or forming an LLC to limit your risk. You may consider your risks and buy some insurance. So many things to consider. With success, you may find that you can’t juggle everything and start to find others to do some of the work, maybe some of the administrative work, maybe some of the logistics, maybe even some of the crafting. And now you are outsourcing services or insourcing by becoming an employer: Whodda thunk you would be the boss lady? And such a paper-pusher to boot?

- Finance: When you’ve done things right, your business will grow and change. You may find it’s time to upgrade and invest in a better sewing machine, produce your very own fabrics or buy a vintage letter press, which may involve a bank loan. Better give that business plan a thorough going over before sitting across from the loan officer. Making a workable finance plan is key.

Familiarity with the paradigms and effects of networked technology: Things like CPSIA, which casts a wide regulatory net over all childrens’ products, including handmade products, may require you to organize with others for political change.

Technology: Crafters make or at least administer their own Web sites, forums and groups. How many of you have spent a good many hours setting up online payment systems, formatting blog templates and searching through lines and lines of html for just that one misplaced backslash? Revenge of the nerds: We’re all computer geeks now.

And there is much more to this list, including Cash flow valuation, Capital budgeting, Risk analysis, Monitoring and Resource allocation. Sister, if you’ve done even half of what is listed up there, you’ve covered most of what is taught in any standard MBA program. Just because your annual revenue is probably less than what a Fortune 500 CEO spends during a single lunch in Manhattan, doesn’t mean that you haven’t had to do and consider all the aspects of a business that she does.

What? Don’t believe me? The headers in bold above are adapted from the curriculum of the Harvard Business School MBA program (which, by the way, runs a cool 46 grand a year for tuition alone). Feeling intimidated by all the business-y thing-a-ma-words? If you don’t have the time and 46 thousand dollars to run over to Harvard for schooling in business administration, there is help out there. The Small Business Administration is one of many good places to go (www.sba.gov). As far as things like the Small Business Administration and the IRS go, my opinion is, it’s my government, why not let it work for me? I’ve picked up the telephone several times and spoken directly with government employees who understand the nuts and bolts of the things I struggled with. While you may be an expert at a welted fantastic and a double stockinette, your government knows you may need a little help understanding what exactly a use tax is. Those free phone calls and emails have saved me time and money and (knock on wood) kept me out of trouble.

Frankly, the ROI in the handcrafted world is generally rather small. I’m probably not taking my own advice very well, because my own cash flow valuation is pretty paltry. The riches are found for me more in the richness of the experience. The rewards are found in feelings of accomplishment, community and family, and not so much in Euros and cents. Not for most. Nonetheless, I will argue, that in addition to the rewards in your personal growth, a crafting business benefits your career skill set, as well. I came of professional age about 1990, before the Internet boom and during a significant recession. The sheepskin in my hand was no ticket into the profession of my choice. The mantra of Generation X was, be flexible and build a career, not a profession. I want to encourage stay-at-home parents to work on their careers: If you can think like a professional, you are a professional. When the time comes to find that briefcase hiding behind the kids’ old sporting equipment and head off to job interviews, you, the business-minded crafter can confidently and truthfully add many of the above skills to your résumé. (And we’ll keep it just between you and me just how fun you’ve had).

Being a stay-at-home parent requires you to wear many hats. Moving from hobbyist to craftpreneur requires even more. So why not wear this one, as well? For you, friends, a little free e-book of a newsboy cap to make from your scraps. I call it the “One-of-the-Many-Hats-I-Wear Hat”. Juggling as much as we do doesn’t leave a lot of time for blow-outs and curling irons: A bad hair day is a good hat day, right?

And then go ahead and cross stitch your business degree from the School of Hard Knocked Hand Knits. Enjoy!

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