Creating a scalable handmade business sounds like an oxymoron in every sense. However, there are many ways to achieve scale even if you are small and have labor-intensive production. If you are thinking about opening or have an existing Etsy, Amazon, or any business where you'll be involved in production, I have some advice for you. Instead of trying to plan tentatively in case you fail, spend more time figuring out what you're going to do if it works. Have a plan for being able to take on additional volume so you can harness every opportunity that comes your way. Did I tell you about the time I got 100k listing views in a day, only had 10 in stock and couldn't fulfill what would have been thousands of dollars in orders? Yeah, let's not relive that. Instead, learn from my mistakes and have a plan that enables you to scale quickly and economically at the onset. After all, if you don't think you're going to kill it, who will?
1. DON'T AIM FOR PERFECTION
To be honest, this one is still a struggle for me. It's not uncommon to find me on a Friday night obsessing over how symmetrical the 'e's are on a "turn off your straightener" mat, but unfortunately, the quest for perfection does more harm than good. It's as simple as this: perfection does not exist in the absence of a customer experience. It is entirely subjective and you can waste a lot of time and money making something people may not actually want or need. This is one of the core principles of The Lean Startup; instead of funding and building a product that is perfect by assumption, start out with a minimum viable product to learn as much as you can about demand using the least amount of resources possible. From there you make small improvements to reflect the marketplace while remaining nimble as demand changes. This does not just apply to tech platforms; trying to achieve early handmade perfection can make your switching costs too high when necessary changes need to be made and you'll stunt your own growth.
I know firsthand how painful this concept is for a handmade seller that invests a great deal of time, detail and pride into their craft, but you have to remember the expert is different from the end user. So when you're starting out, make your product good (and price/manage expectations accordingly), then use customer feedback to make it great.
2. STREAMLINE THE PROCESS
Before you can take on more volume, it is crucial to itemize your production process and identify what's broken. What's taking the most time, where are the bottlenecks, what are the biggest causes of waste or rework, etc. Look at every aspect of the process; from setup and creation to fulfillment and shipping. Measure the actual time spent on each step relative to the value they're adding to the customer experience and eliminate low-value high-labor steps immediately. Trust me, these small things really add up when you start to grow (and are harder to change the bigger you get). For example, my labeling & boxing process was one of the biggest issues I found through this exercise. I was printing labels on regular paper and having to individually cut/tape them while using boxes that didn't have the ability to self-seal. This doesn't sound like a big deal, but the time it takes to trim one label to a box-width rectangle, tape both sides of the box and then tape the label to the box was 1 minute and 29 seconds. After investing in a label maker and finding (free! see below) self-assembling boxes, this process became 22 seconds. Doing 5-10 orders a week, no big deal, but at Christmas, when doing around 500, that is a difference of roughly 9 hours of work, for one step of a 15+ step process. And during Holiday season, 9 hours in retail can be the fine line between jolly Christmas elf and Ebenezer Scrooge. Point of the story? Spending one day timing your process wing-to-wing will be very enlightening, I promise. Oh, and get a label maker if you're doing any online business, it will change your life.
USPS free boxes - don't spend a lot of money on shipping materials if you don't have to!
3. PICK TWO: SPEED, PRICE AND/OR QUALITY
In addition to relinquishing the idea of perfection of the initial product, you also have to be realistic about the priorities of the business as a whole. I think everyone goes into business hoping they can provide customers with all three of these things. I found out very quickly once I started to get more than 10 orders a week it can't be fast AND inexpensive AND of the highest quality. Instead of making assumptions about which two are most important for your market, listen to customer feedback and see if they want it cheaper, faster, or better; there's always one that screams louder than the other. When I started out, I priced the mats high just to survive but (personally) wanted them to be cheaper. I put a lot of effort into streamlining processes to bring my prices down, but my customers’ feedback indicated that I was cutting some of the things they liked best: one-on-one customer service, the hand-painted product, and the notes I’d write to each customer. I then realized that people are paying for an experience as much as a product. My goal shouldn't have been to make it cheaper, it should be to make it faster and to use the price to maintain the quality of the experience. I wasn't losing business due to price, it was due to speed, and I wouldn't have been able to grow if I focused all my efforts on making them cheaper.
When you figure out which two are best for your product/market, aim for small but continuous change. I couldn't overhaul my processing time for the hand painted business overnight, it took me around 4 months to get through a serious backlog and shift my processing time from 3-4 weeks (!) to 2-3 weeks, which at the time was a major improvement. One month was a LONG time and if you were one of my customers that kindly waited that long, God bless you. Now we're at 5-8 days, but more on that later.
4. LOOK INTO A MANUFACTURING PARTNER
While I worked to get my hand painted processing time down further, I decided to address the timing issue by diversifying my product offering. I heard loud and clear from my customers that I was losing business because people needed last-minute gifts, but hand painted mats take time. So, during the holiday season I started offering screen-printed versions of my popular styles that were pre-made. Interestingly enough, overall sales grew, and 70% of my orders were still for the hand-painted mats. The pre-made ones were not stealing share; they brought on an incremental customer base that had a different set of needs. And, what started as a temporary fix to help during holiday turned into being a completely transformative business decision. Not only does it allow me to meet more customer specs, but the printed mats also allowed me to fulfill bulk wholesale inquiries and broaden my distribution. Inevitably, you'll have to pick and choose which parts of the process to source and which parts are the most important to do in-house to maintain the integrity of the brand, and the sooner you can find reliable, ethical and affordable partners, the better.
I need to do a whole separate post on manufacturing partnerships, but for now, if you're looking for manufacturing help- Makers Row, ThomasNet and now Etsy are all great resources for finding domestic manufacturers (which I'd recommend not only to support local businesses, but the minimums in US factories are often more favorable to small businesses).
5. DON'T BE AFRAID OF HIRING/CONTRACTING HELP
This took me so long to figure out (sorry Mom!!!). When I first started, I had another job I had no intention of leaving and was convinced this would be temporary (again I was trying to not fail instead of planning for success). My mom was helping me paint while I was at work and I was painting on nights and weekends. My poor parents were driving around to every mid-Atlantic store that carried my first generation rugs because they were out of stock (add supplier diversity to the list of things I didn't understand). I waited until the point of a total meltdown until I found people, which I do not recommend. It is nearly impossible to delegate before you are organized yourself. I think I was scared of what I didn't know and the idea of involving labor seemed so complicated, but you don’t have to hire full time employees right away. I posted an ad on Craigslist and got over 150 email responses (to paint rugs?!). I don't think I even realized that a freelance, flexible, artistic job was so appealing for a lot of people to do on the side. I had phone interviews, met a handful in person, and brought on 2 painters to start, who have referred friends ever since. It's been a blast getting to share Be There in Five with others and being able to provide flexible jobs for people in my community.
So how do you go about this? First, do #2 on this list and make sure you're clear on what activities you should delegate that would free up your time so you can focus on growth. Then, make sure you understand the difference between independent contractors and employees to figure out what will work best for your business. For contractors, there are great resources for writing up agreements (like here on LegalZoom) but in general when you're involving other people, I do think it's important to find a small business lawyer (or a kind friend with a J.D.) who can help you understand labor nuances. Be clear on expectations and quality control from the start, and know you'll get out exactly what you put into training. While it may seem like a lot of effort at the beginning, you'll end up learning way more in the end by having new sets of eyes on your product.
These options are what have worked for me over the past two years, but I certainly didn't deploy them all at once. Business ownership is all about looking ahead while not getting ahead of yourself, if that makes any sense. My advice would be to prepare yourself with the knowledge and resources to act quickly when the time comes. You don't need to set up the entire infrastructure before it's necessary, but you can at least know where to go so you don't end up crying in an Uber to a suburban Wal-mart at 1am. I don't know anybody who would do that though.