How to start your handmade business with no money

Often people think that starting a new business requires a lot of upfront investment, capital and ongoing financial commitment. On top of that, the small business statistics are not particularly encouraging when you find out that most businesses don’t make it through the first three years. Whilst this looks like a bleak prospect, it doesn’t have to be!

The good news is that most craft businesses can be started with little or no money. In this way, you can invest in your business gradually as your handmade business starts making money.
In this blog post, I’m going to share with you how to start a craft business with no (or very little) money to help you build your dream business.

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Start with a craft business that you know!

The chances are that if you want to start a jewellery business, you already have a jewellery making as your hobby. And I’m sure, over the years, you have collected and bought the right equipment, material and set up your little craft room or a corner. You already have the knowledge of your craft, the right equipment, set up and material.

You already know your suppliers, trends in jewellery and who you admire in your field. Sure, you will need to perhaps improve your techniques, learn how to use new tools, but you don’t need to spend money on learning something entirely new!
All this would be a huge financial and time investment if you were starting from nothing!

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Do your research well

If we stay with the example of a jewellery maker, you need first to research what trends are current in your craft niche – in our case – the jewellery market. You need to start thinking with your business head-on when you do this.

For example, if you love making intricate beads bracelets, which take a lot of time to make and the material cost is fairly high, can you really sell them at a price that people can afford, and you can live on?

Or if you make a particular style of jewellery, is there a demand for such products? Is there something that you can make, that’s also on-trend and in fashion now?

The clever bit about this is to come up with a product that you can easily make (e.g. you have the expertise), it’s affordable for you to buy the material and you can then make a decent profit on each product purchased.

Please don’t feel that a ‘profit’ is a rude word here! You absolutely have to make a profit on each product to make sure that you can re-invest it back to your business and of course to be able to pay yourself a decent wage from the start.

Reframe what you really need to set up your handmade business

If you are strapped for cash, you have no option, but to start thinking outside the box and be very creative about what you really need to run your business versus what you might like to have.

Don’t worry about the mainstream business advice or even about what your established competitors are doing.

So, what if the jewellery business in the next town that you admire so much, has a custom-made website, brick and mortar shop with staff and supplies wholesale jewellery to a chain of shops. The chances are that as glamorous and amazingly successful this sounds; it can also bring more problems.

The custom website needs to be updated by somebody who understands it, which means you need to pay more for every change you want to make. The jewellery shop rent can go up with no warning and the staff might become ill, leaving you without a shop cover.

The wholesale order probably works on very small margins, which means you need to sell a lot to make the same money as if you sell directly to the customers. It doesn’t mean that that jewellery business has a bad business model, but one that works for them. And equally, it doesn’t mean that the same model will work for you. Nor it means that you should apply the same business model for your business, just because it works for somebody else. Create your own path!

So, let’s think about how to set up your craft business with no or very little money.

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Decide on your workspace – studio or craft workshop

Designate a room or a corner in a room to your new craft business. Utilise furniture that you already have. As your business grows, you’ll be able to re-invest money into upgrading your workspace to perhaps a house extension, garden studio, loft or garage conversion to a craft studio.

Business marketing on a shoestring

Utilise all available free marketing, that you feel comfortable with. This very much depends on what craft niche you have, but Instagram and Pinterest work particularly well for creative businesses.

Tell everyone you know about your new business. Don’t try to annoy your friends with lots of self-promotion, but simply letting people know what you currently do. Next time when they or their friends need a jewellery gift, they will think of you! None of this cost any money and word of mouth is the best marketing anyway!

Maximise all free business tools and services

There are lot of free and low-cost services you can use when you are just starting your business. You can always upgrade to the more expensive better services and products later at any time. Check out your local council business hub for free courses and mentoring support.

Online tools, such as photo editing, website tools or e-mail marketing, usually have a free version, which has a fewer features, but it’s usually perfectly adequate to work with.

Utilise all your equipment & material

After you’ve decided what type of product you want to focus your business on, you need to be brutally honest with yourself and cull your craft suppliers’ stash!

What could you make with things from your stash to help you raise start-up funds if you need to? Alternatively, are there any items in your stash you could sell to raise some funds? You will need the space anyway, so why not make some money to re-invest them back to your new business?

Establish your online presence – Website, Shop or Blog for free

Having an online presence is practically a must for any business. But it doesn’t mean that you have to have all singing and dancing website that will cost you several thousand pounds or dollars.
There is nothing wrong with starting with the basic free version of widely available website platforms, like Wix, Weebly, WordPress or other platforms.

If you are not keen on learning how to design or manage your own website, you can just open an online shop on a craft marketplace, where you pay a small commission only when you sell something. This is completely risk free, saving you time and money too.

Another way of selling your products without a website is to sell directly via social media. There are many successful craft businesses that sell directly through a closed Facebook Group, that they created for their customers or through Instagram. Just post an engaging product description, great photo, price (including any P&P) and how people can contact you about the product and pay you.

Exchange services or products

I wouldn’t recommend approaching established businesses, but if you know somebody who is just starting out like you are, you might be able to help each other.

Be realistic about pricing your services or products when you are exchanging, making sure that both products and services are of a similar value. This is also a great way to network with new business owners and support each other on your new journey.

Originally written on 21 January 2021 and last updated on 11 December 2023