Handmade In Australia Business Development

Business Development for handmade business.

Today I would like to share with you how I have taken a business that was rupturing money and running at a loss, while I was struggling on Centrelink, and turned it into a profitable business with staff and registered for GST in just 18 months. 

 

Although you may or may not be a mum or a female business owner, today I really want to focus on the impacts that these two factors have on business ownership.

 

If you don’t fit into either of those categories, I hope you can use your discretion and enjoy the content I am sharing with you as well.

 

The reason I want to focus on these two major factors is that 30% of small business are owned by women and there is still a substantial gender pay gap of 21.7% between male owned and female owned businesses, aside from that, I looked up a full-time nanny wage and it came in anywhere up to $60,000/pa. This means that not only do we receive less money in our work, but we’re also grossly underpaid for the rest of our tasks that we complete in a day while also trying to run a functioning business.

Now, it’s not going to be all doom and gloom...

Although women have many more barriers in starting a business, there are plenty of things that we can do to change the narrative around this.

For example, I am a full-time solo mum, my child is with me 24/7 because we homeschool and I do not have family in the country. We do not own a tv, she does not have an iPad and I still managed to create a successful business. I chose the sole-trader model with casual staff. It is NOT easy, but I have been running businesses since I was 16 years old and I decided that something had to give so that I could get off Centrelink after becoming a solo mum, and to provide the best life for us both during my little-one’s childhood.

There’s not so much of a hack as to what I did, but I attribute the biggest shift to when I started working closely with a man who had a background in building businesses up to multi-million dollar revenue. Gosh, was I in for a shock when we dissected my “business.” There were tears, that’s for sure! While I was going through this process I did more work around the “Sisterhood Wound” and the “Witch Wound,” both are fascinating concepts and helped me to shift my perceptions in lots of areas. I have to say that some days are hard, but I am grateful that he constantly challenges me to change my beliefs around what running a business means, what is possible and he continually educates me on how businesses work in the corporate world and what I am capable of.

As of recent data, approximately one-third of small businesses in Australia are run by women. This number has been growing steadily, with a 46% increase in the number of female business owners over the past two decades. Australia ranks 8th globally for the proportion of women entrepreneurs, with around 30% of total business ownership belonging to women¹

 

 

In Australia, the income gap between male and female small business owners is substantial. On average, female business owners earn significantly less than their male counterparts. According to data from the Workplace Gender Equality Agency (WGEA), the total remuneration gender pay gap stands at 21.7%. This means that for every dollar a male business owner earns, a female business owner earns approximately 78 cents.²

Before we go too much further, it’s time to think about why you’re doing this, why do you want to start a business?
Do you want to make some extra money?
Do you want to sell your art/craft?

Do you want to stay at home longer with your kids or top up your retirement fund?

Have a think about what success means to you.
Does it mean a certain weekly/monthly income?
Does it mean more time with your kids?
Does it mean having a brand with your face on it?
Does it mean winning competitions and awards?
Does it mean having a profitable business?
What does a truly successful “business” mean for you?

 

Success is subjective and can vary greatly from one person to another. Identify what success looks like for you.

From here you can align your business goals with your personal aspirations. Consumers are now more conscious than ever of their impact and business’ impact, so ensure that your definition of success includes sustainable and ethical business practices.

 

Why is this important?

If, for example, your goal is to make some extra money while staying at home with your kids, then it’s going to be especially important to do the maths. Most micro businesses struggle to profit in the early stages. If your main goal is to make money quickly, have a real look about whether this is the way to go. Nearly all businesses will need an initial investment. Find yourself a good accountant and figure out how much capital you need and where it's going to come from.

This starting point gives you the answers and direction to see how far you develop your business or whether you keep running it with a hobby mentality (you must still register the business if even if you want to just “do it for a bit of fun”.) Or whether you look at a different avenue for your revenue stream continue making your art for the love of it (which is totally valid too!).

 

Take some real time to reflect on your reasons for starting the business. This can provide clarity and direction and save a lot of heartache down the line.

Ensure your business aligns with your passions and purpose. Have a clear vision of where you want to take your business.

What kind of business structure do you want?
Do you want to be self-employed? Do you want to sell at markets? Do you want to sell at consignment shops? Do you want to wholesale? Do you want to focus on eCommerce? Do you want to have staff in the future? Do you want to grow into a Pty Ltd company?

All of these questions are going to be crucial for when you put your business and marketing plans together as well as when you set your pricing.

Keeping safe in the online world:
The business world is changing so fast with the online space. A few things to keep an eye out for are:

Plagiarism – now not only do we have interpersonal plagiarism, but we also have AI and larger corporations who are stealing designs and artwork.

Modern Pyramid Schemes - A good consultant is just that “a consultant” they will come and support you directly in your business to meet your goals. Keep your eyes open when your feeds become bombarded with “gurus” whose business’s have made them millions of dollars, and now they’re going to show you how to do it in a short course format.

 

Do your research, a simple ABN search will give you lots of information on their original businesses. What was their original 6 or 7 figure business? Are they GST registered?

Keep an eye out for businesses that sell you a promise with no back up. Whether you’re looking to sell at markets, in consignment stores or elsewhere, you need to be able to “do the maths” this means that you need to keep vigilant and make sure that anywhere you’re spending your money has done their own research, their business should be selling your product, not selling a stall or a shelf, always ask lots of questions.

 

Every market and shop should have data on the following:
Foot traffic, average spend per sale, what items sell, the store’s demographic.
They should also have a decent marketing plan. It is best practice for you to ask these questions before investing in anything.

 

A great example of this is pbcEXPO. They collect lots of data and supply it in an easy to read infographic to all potential stall holders. This shows you that they are experienced and care about their stall holders.

 

Remember it’s ok to not invest if you don’t feel comfortable in the decision.

 

Generally in the larger business world consignment doesn’t exist, usually a store will have done their maths and made sure that from their sales profit they can purchase wholesale from their suppliers.

 

You can choose which model feels right for you.

How do you actually start a business? Probably one of the most crucial questions of the day!
Now you know what kind of a business model you would like start using the safe resources that are out there for you, they’re FREE!

If you’re on Centrelink you can speak to them about joining the NEIS program, you get a business mentor, a cert III. or IV in Business and 39 weeks of Centrelink payments plus rent assistance, while you get your business started.

I cannot stress this enough, no matter what you want to sell, you need to know: how a business works, how to run a business, how to find customers and how to sell to the right customers. You cannot skip this step, without costing yourself a lot of money and time or getting sucked into ads which promise you the world.

I’m going to list a few simple do’s and don’ts below. Keep these in mind for next week’s Q&A session, as we’ll be able to go into them further there.

Do stay in your lane.

Do what you’re good at and what you love. Don’t try to diversify, do delegate!

 

If you want to start a business to make money, and can draw, but can’t sew, don’t start the business out by buying a sewing machine – find someone else to sew (we’re out there!), find a high-end printer and keep making your amazing art, the art that you love and that fills your cup!

 

Do the maths.

Understanding the financial aspects of your business is crucial. Regularly review your finances, set realistic budgets, and track expenses diligently.

 

Learn about what the differences between turnover, gross profit and net profit – it's very important to learn the distinction. Businesses can fail without realising by simply not knowing the terminology, which will change your maths! A mark up on a product is not gross profit!

 

 

Remember It’s a Numbers Game

 

Business success often comes down to numbers. From sales to marketing metrics, keeping an eye on the numbers helps in making informed decisions.

 

Track your metrics, identify key performance indicators (KPIs) and track them regularly.

Adjust your Strategies and be prepared to pivot your strategies based on what the numbers tell you.

 

Realise That Not Everyone Needs Your Products

 

It’s essential to understand that not everyone will be your customer. This realisation can save you time and resources and save your feelings too.

 

Focus on your target market rather than trying to appeal to everyone.

Develop marketing strategies that resonate with your ideal customer base.

 

Know When to Quit

 

Knowing when to quit is as important as knowing when to persevere. Sometimes, quitting can be the best decision for your personal and professional growth. On a personal note, I have quite this business about 5 times so far.

 

Regularly assess the viability and profitability of your business.

Have a clear exit strategy in place if things aren’t working out.

 

 

This last one can be hard to digest! I am now on business number 8+ various incarnations of this business. And that’s ok! I have learnt a lot in the last 18 years, I have failed and lost a little money and a bit of dignity, but if you do any research into the most successful business owners of our time you will see how many time they failed before they made it!

It’s all well and good to know what to do, but what about what NOT to do?

Here are a few of my collected favourites:

What Not to Do:

 

Call yourself a CEO

 

While it might seem empowering to take on the title of CEO, especially in a startup or small business, this can sometimes backfire. The title of CEO often carries a heavy connotation and may not reflect the operational reality of your business. Here’s why you might reconsider:

 

In a small business, grand titles can create unrealistic expectations or even alienate potential clients who might perceive you as inaccessible, CEO is a title that has a specific meaning, so if you are calling yourself that without being an actual Chief Executive Officer, then people may struggle to trust your integrity and authenticity.

“A chief executive officer (CEO) is the highest-ranking executive in a company. A CEO's primary responsibilities include making major corporate decisions, driving the workforce and resources of a company toward strategic goals, and acting as the main point of communication between the board of directors and corporate operations. CEOs are elected by the board and its shareholders.”

 

Emphasising your practical role within the company, such as “owner” or “owner operator” can feel more approachable and accurate. This approach can be particularly important in industries where women are still fighting for equal footing and respect.

 

Don’t make people ask you twice to take their money

 

Nothing turns potential customers away faster than making it difficult for them to purchase your products or services. Identifying the buying signals and fill in any gaps to confidently solve a customers needs with your product or service.

 

Learn when to stop the sale short if your potential customer stops engaging and put your time and effort into other customers – remember, not everyone is your customer.

 

Don’t talk about your business in the third person

 

When discussing your business, avoid referring to it in the third person. This can create a sense of detachment and impersonal interaction. Instead: use “we” or “I” to establish a personal connection with your audience, making your communication more engaging and relatable.

Personal language fosters authenticity and trust, which are crucial in building customer relationships.

If you’re writing posts on socials, it can look disingenuous if you talk about a business in third person and may get you banned from groups once caught.

 

Don’t ignore customer feedback

 

Customer feedback is a goldmine of information that can help you improve your products and services. Neglecting it can lead to stagnation and missed opportunities. To avoid this:

 

Regularly solicit and review customer feedback and use active listening – leave your ego behind.

Be willing to make changes and adapt based on constructive criticism.

Accept that sometimes you really don’t make the best decisions, it’s ok to acknowledge this, learn from it and move forward with better practices.

 

Women often bring strong empathy and communication skills to their businesses. Use these strengths to connect with your customers and respond to their needs effectively, but try not to take the keyboard warriors too seriously.

 

 

Here’s a little bonus on how to lose sales:

 

Sales are the lifeblood of any business, and losing them can be detrimental. Here are common mistakes that can lead to lost sales:

 

Overpromising and Underdelivering: Always ensure that what you promise in your marketing and sales efforts can be realistically delivered.

Lack of Follow-Up: Failing to follow up with potential clients shows a lack of interest and can push them towards competitors.

 

There’s a lot more I could go into, but these are some great starting points, no matter whether you haven’t started yet, or if it’s time to review your business.

I hope you are able to go away today, grab yourself a pen and paper, or open up a new text document, copy the questions above and get started dissecting what business means for you and where you want to go from here.

If you got this far, then thank you for reading, you can shoot me an email and let me know your thoughts.

 

Paisley.

 

 

 

 

 

 

 

 

 

¹ [Research ranks Australia 8th in world for proportion of women entrepreneurs](https://womensagenda.com.au/business/research-ranks-australia-8th-in-world-for-women-entrepreneurs/)

[2023 Australian women's small-business champions revealed - Inside Small Business](https://insidesmallbusiness.com.au/latest-news/2023-australian-womens-small-business-champions-revealed)

[Female small business owners are leading the way in Australia](https://womensagenda.com.au/latest/female-small-business-owners-lead-the-way-in-australia/).

 

² [Gender pay gap data | WGEA](https://www.wgea.gov.au/pay-and-gender/gender-pay-gap-data).

 

3 https://www.investopedia.com/terms/c/ceo.asp