Beginners Guide to Starting a Handicraft Business

Starting a handicraft business can be challenging, but it can also be rewarding as you gain experience and build up your skill set in this new craft industry.

 

One of the most common ways is starting a successful handicraft business where you make items and sell them at a retail shop or on your website.

 

Follow these steps below to start your handicraft business smoothly:

 

Step 1 - Research the Market and Competition

Step 2 - Choose your Product Line 

Step 3 - Take the Legal Step

Step 4 - Select your Target Niche

Step 5 - Set up your Store

Step 6 - Source Quality Materials

Step 7 - Hire Manpower

 

Step 1 - Research the Market and Competition

 

Market research is a key part of any business. 

 

It will help you with the following:

 

• Decide whether you should start a business or not.
• What type of products to sell?
• What price range to set? 
• Understand the market.
• Develop strategies.
• Plan Marketing and Distribution Strategy.

 

The market for handicrafts has been growing steadily in recent years. 

 

This is due to various factors, such as the rise of social media and art appreciation among millennials. 

 

As a result, there is a lot of opportunity in this industry, and more people are now looking into building their own businesses in it.

 

For conducting market research, many factors need to be considered. 

 

Such as the type of product, where to sell it and how to market it.

 

Competition

 

The most common competitors are other artists and individual artisans who sell their own products. 

 

The market is highly competitive, and it can be hard to stand out from the crowd.

 

But, the best way to beat them is to make sure that your products are of higher quality.

 

Beating the competition is not easy, but it can be done with a little effort. 

 

You need to make sure that you are always improving your products and offering something unique for your customers.

 

Step 2 - Choose your Product Line 

 

Handmade items are becoming more popular these days and so are the opportunities for people who love crafting to make a living out of it. 

 

Accordingly, there is no one right product that will work in all markets and different types of customers. 

 

You need to find what you can sell, how you can sell it and what variety you can offer.

 

There are many different types of products that you can sell in this industry, and some of the most popular include: - 

 

• Crafts (paintings: painting, watercolor painting, sketching, mixed media paintings)
• Fashion (clothes, gowns, coats, sweaters, hats, scarves, belts, shoes, purses, bags)
• Jewelry (bracelets, necklaces, rings, earrings, chains)
• Pottery (vases, dishes, mugs, bowls, plates, sculptures)
• Handmade Furniture (chairs, tables, desks, cabinets, beds, dressers, nightstands, bedside tables) 

 

Handmade crafts don’t always have to be expensive and luxurious. You can also sell items such as key chains, mugs, and magnets.

 

Step 3 - Take the Legal Step

 

To start a handicraft business, you will need the following legal registrations:

 

• Business registration
• Tax registration
• Import and export license (if required)
• Intellectual property protection

 

Business Registration

 

A business without registration is just an idea you are still working on. Therefore, do not skip this step if you want to be safe on the legal part as well.

 

Not only this but there are many benefits that come with registering your business in India.

 

Such as,

 

• Recognised Entity
• Increases Business Reliability
• Ease to get loans
• Benefits of Government Schemes
• Helps in Legal Conflicts, etc.

 

With this in mind, you can register your handicraft business as:

 

• Private Limited Company Registration
• One Person Company
• Limited Liability Partnership
• Sole Proprietorship
• Partnership Firm

 

The decision to choose the best business structure is a crucial one. Thus, you will need someone who knows about it in detail. 

 

In fact, you do not have to look for them everywhere. Just fill out the form on your right, and an Expert from StartEazy will reach you on call within 24 hours.

 

Tax Registration

 

Along with business registration, you must also apply for GST Registration in the following cases:-

 

• Voluntary Registration
• If Importing or Exporting
• To list products on an online marketplace
• If your turnover exceeds Rs. 40 lacs (Rs.20 lacs in special category states) in the financial year. 

 

Import and Export License (if required)

 

An IEC Code is required if you plan to import any raw materials from other countries or you wish to sell your handicrafts globally.

 

It is mandatory for authenticating your shipment and allowing it to go through customs clearance smoothly.

 

The application process is very easy, and you will get the certificate within 48 - 72 hours after applying.

 

Intellectual Property Protection

 

Intellectual property protection basically means protecting your brand name with trademark registration. 

 

Trademark registration allows companies to prevent others from using their logo on products without permission and take legal action against them if they do so.

 

Step 4 - Select your Target Niche

 

The Indian market is saturated with handicrafts and art items, which can be found everywhere. It makes the competition tough for new entrants in the market.

 

A niche can be defined as a specific area of interest or focus which helps you stand out from your competitors and make more sales. 

 

Here are some tips to help you identify your target niche for your business:

 

• Who are the consumers? 
• What do they want? 
• What is their purchasing power?

 

Many people in India are fascinated by the art of handicrafts. 

 

They love to buy handcrafted items, especially those that are handmade with care and attention.

 

The target customers for a handicraft business in India include:

 

• The upper-middle-class Indians who have a taste for quality and luxury items
• The middle-class Indians who want to make a statement about their love for the country’s culture and traditions
• The lower middle-class Indians who want to spend on their own culture

 

Mainly, the target niche for the handicraft business in India is increasingly shifting towards urban and semi-urban areas.

 

They have a growing demand for unique and handmade products.

 

However, there is still a lot of untapped potential in the industry.

 

Step 5 - Set up your Store

 

There are many different ways to set up a handicraft store. 

 

Some people think that the best way is to start with a storefront, while others prefer to have their products online.

 

The best place to set up a handicraft store is in a busy area. 

 

It will help you attract more customers and make it easier for them to find your store when they are looking for something new and unique.

 

While making this decision, here are some points to consider:

 

• Online stores have lower overhead expenses because they do not need property or employees. But, they do require payment processing and shipping services.
• Retail shops (200 -400 sq ft) require a space with footfall and in a visible location. It also offers more inventory variety and customer interaction.
• Wholesale shops (600-800 sq ft) require more space and offer lower prices on products than retail stores do. But, they have to sell their goods through other retailers.

 

Where to set up a handicraft store?

 

• In a garage or basement (Best for Wholesalers)
• In a small storefront in a neighborhood (Best for Small Retailers)
• In your home (Best for Online Sellers)
• On the side of the road (Best for Medium or Large Retail Stores)

 

Step 6 - Source Quality Materials

 

There are many sources of quality materials for the handicraft business. 

 

Some of them are listed below:

 

• Local markets: Local markets in India can provide you with a wide range of materials that you can use for your business. They might be more expensive than the sources in other countries but they have a certain charm to them that makes them worth it.
• Online stores: Online stores offer a wide variety of products at affordable rates. You will also be able to find some unique and rare items here that you won’t find anywhere else. For Example:- Boontoon.com
• Craft fairs: Craft fairs are another great place to source quality materials for your business. Most craft fairs have vendors who sell their wares at affordable prices, so it is a good place to look if you want to buy in bulk. 
• Antiques: Antiques and Vintage shops are other great places to find materials for your business. These stores typically offer a wide range of materials at reasonable prices, so it is a good place to look if you want to buy in bulk.
• Garage sales: Garage sales are a great way to find gently used materials for your business. Most people do not like to sell their old materials, so they will often leave them out in their garage for people to take. You can find great quality materials at a fraction of the price that you would pay at a store.
• Thrift stores: Thrift stores are another great place to source good quality materials for your business. It is especially true if you are looking for a vintage or handmade materials, as these are typically not for sale. 

 

Step 7 - Hire Manpower

 

The handicraft business in India is a growing industry. As a result, many people are looking for jobs in this industry.

 

Here is a list of some tips that will help you find the right people for your handicraft business in India:

 

• Find out what skills the candidate has and what kind of work he/she is looking for before you make an offer.
• Make sure that the candidate has experience with your type of handicraft business.
• Make sure that the person has good communication skills and can work well with others.

 

Accordingly, there are a number of people required for a handicraft business in India. 

 

Some of them are: 

 

• Designers 
• Craftspersons 
• Laborers 
• Technicians 
• Marketing staff and managers 
• Office staff, typists and receptionists
• Supervisors and coordinators
• Accountants and auditing staff
• Sales staff
• Shipping staff
• Store manager and assistant managers 

 

The requirement will depend on your scale of business. For example, if you start with an online store, you won't require much help initially. You can either manage on your own or ask for help from family and friends. 

 

On the other hand, for a retail store, you will need around 2-3 people initially as you go big you will need more gradually.