This week’s Instagram Live saw Pedddle Founder Nicki speaking to Catherine at Future Retail about making money with your small business whilst remaining creatively fulfilled,, having faith in your business, setting pricing structures and more.
Catherine set up Future Retail, which helps businesses to grow their sales and offers coaching services. She also founded the Resilient Retail Club, an online course in starting, growing and scaling a profitable product business. To add to her many talents, she’s also recently been writing articles for Forbes magazine, including one of the future of British Retail and how Covid is affecting Christmas for retailers.
What does Catherine know about making money?
We’ve spoken to Catherine many times before, as she’s shared her expertise on setting sales goals for markets, growing sales from a small business, and product pricing issues – so she knows a fair amount about making money within a business!
Creativity and making money aren’t mutually exclusive; there’s no reason you can’t be a creative person with a creative business and make money from your brand too. Read on to find out more…
Believe in your business
Firstly, you need to have faith in your business. There’s no point putting your blood, sweat and tears into creating products without making it financially viable too – have faith that you can do both, being creative and making money.
It’s great to have a side hustle, but why not make it something you can profit from for a living too? Loving what you do is great, but there’s no reason you can’t be profitable as well.
Often, the difference between small businesses that succeed for years and those that fold after a few years is that those people are willing to push through and keep growing. Learn from what does and doesn’t work, watch what sells and what doesn’t, don’t be afraid to discount things to get rid of stock, and most importantly, hang on in there.
REMEMBER – If something doesn’t sell then it’s no reflection on you as a creative. You need to keep the cash flowing. There’s no shame in discounting ranges or product lines to keep things moving. There’s a phrase Catherine uses – ‘there’s no price you can set to avoid criticism’. There will always be someone who thinks your prices aren’t right. Also remember that there’s such a thing as ‘reassuringly expensive’ – people expect to pay more for quality products.
What can we put in place to make a business profitable?
Planning is key. The two key things are a) that you make enough money every time you make a sale and b) that you don’t spend all of your money on your stock.
Catherine often speaks of the ‘stock monster’ – you think ‘if I buy this in, it’ll make more sales’, or ‘if I buy in bulk, it works out cheaper’. However, what is the point in buying a year’s worth of stock? You’re literally sitting on cash. Getting the balance between current stock and making sales is vital.
You can have a high turnover but still not be profitable, for example if you invest too heavily in stock. Think about it like a flowing mechanism – always keep an eye on the numbers and don’t sit on cash.
Have a goal.
Have an idea that you want to make X amount of money, then work out how many products you need to sell to make that. This works for both selling at markets and forecasting for the coming months. This gives you a target and helps you plan stock levels accordingly, and will help you set profit margins too.
Catherine’s Resilient Retail Club discusses sales plans in this way, and will help you to create a sales plan. Once you have a sales plan, you can create a stock plan and plan all of the other things that influence sales – but a sales plan must come first.
Once you set clear goals to achieve, you know exactly when to celebrate too! So many of us let huge milestones pass us by, but it’s high time you gave yourself a pat on the back!
Optimise your business.
Optimise all the time – if your best sellers are flying out, raise the prices slightly and monitor whether they still sell. Monitor and work on your profit margins regularly.
Ask yourself:
- What are your best sellers?
- Are your best sellers high or low priced?
- Are you clearing as you go? Don’t stockpile! If you have excess stock or things that aren’t selling, get rid of it – discount it and move on.
- Could you bundle the things that aren’t selling well to get rid of the stock?
- Can you raise any profit margins slightly, or cut any production costs?
How should we price products?
- Be competitive – don’t outprice yourself but don’t undersell yourself either. There’s no point undercutting your competition – you need to be competitive for quality products, and provide value for money.
- Check the competition – compare your business with people who are producing similar quality products. Do you want to be in line with them, or produce higher or lower quality products than them? Just because you find someone similar doesn’t mean you need to price the same, but it’s good to get a rough idea of what people will pay.
Profit margins are key
The healthier your profit margins are, the higher your profits will be – and the less you have to sell to achieve your goals. Having lots of products that take time to make and all have different price points can be harder, so it’s important to see what sells, what is most profitable and strike that balance to find your top sales of the month and spot trends etc.
If you’re looking for further guidance, check out our blogs on setting sales goals for markets, growing sales from a small business, and other product pricing issues.
Get a Money Making Mindset
As we’ve said before – just because you’re creative doesn’t mean you can’t be business-minded! If you want to make your creative business your main source of income, that is absolutely achievable!
There seems to be a general level of guilt in the creative industries, and making money and being too ‘corporate’. It is absolutely OK to talk about money sometimes, so don’t feel bad for raising the issue or raising your prices! You deserve to be paid well for the things you create and provide.
We all work in this industry as it is something we love doing, but that does also have to pay our bills and put food on the table – and we should be proud of this.
Making money from other income streams
Covid has forced us all to adapt and change the way we make money this year, whether it’s working from home or re-thinking the sources we can make money from, especially with markets and events being closed so often. Have the confidence to think outside the box and sell your products in a different way.
Write down 25 different ways you can grow your sales. You’ll start to run out of common ideas and really have to think about how you can reach out to your audience in different ways.
For example:
- Do you sell through your own website?
- Have you used an online marketplace, such as Etsy / Folksy / And So To Shop?
- Have you tried an Online Market instead, such as one of Pedddle’s online markets? We’re focusing a lot more on these kind of collaborations in 2021, so watch this space!
- Have you tried writing blogs? It’s a great way to push content out, get better SEO and you could advertise other makers, do ‘how to’ blogs and talk about your work – there’s loads of ideas you could try.
- Consider online workshops, colouring pages and kits – crafting is really big right now as entertainment, monetise it!
- Partner up with another local business and create local gift bundles to sell in your local area
- Can you deliver in your local area and market this as a unique angle, and monetise on the #ShopLocal movement?
We’d love to hear from you if this IG Live or blog has made you think twice about how you profit from your business. Feel free to DM us on Instagram!
You can watch the full IG Live chat here: