Cardboard Box Economics

Advice  for creatives starting out on the bumpy own business ride.

Designed for those who hedgehog when faced with money issues.

When you grow into a big bold successful business then employ someone to do this stuff properly.

In the meantime these strategies should get you through.

The advice is for the UK .

There we  are, now we are safe, now you can cope

This is all going to be in your language, you will completely understand and be able to apply it

What you don’t need to do and what to do instead:

You need some sort of book-keeping record but one you understand and feel master of. If spreadsheets mystify you, don’t use them.

Accounts are simple. They record how much money comes in and how much you spend on  the business. You need them to understand your business and to pay the taxman

Use an ordinary A4 blue* hardback notebook and a cardboard box. Keep both to hand and fill them in as it happens

* Thats a joke, don’t be silly it doesn’t have to be blue

In the book you put a heading  INCOME with the year and then put the month then every time  you  receive  money you fill in who from,  what it was for, and how much . Annotate this in any way that could be useful to you so  if you do a show  bracket the sales at that show and label it

On the opposite page do the same but head it EXPENSES and there you fill in what you paid out for, then how much.

Keep the numbers at the end so they are easier to add up and round them all  to the nearest £.

Then total that month. Keep your expenses and income separate just run totals.

In your CARDBOARD BOX put your spending receipts,  they are for the taxman.  At the end of the April to April  year bag them up, label and KEEP. If you work from home put your utility bills in here  as you can probably claim a portion against your tax bill.

This simple method shows you how you are doing, for a bigger view  do a YEAR ON YEAR account.

Take the monthly income totals and at 3, 6,9 and 12 months  total those. The next year  fill in those figures alongside and if the total is up or down on the year before put an up or down arrow. The arrows tell you everything. In the third year you do two arrows for the previous two years.

Remember that your expenditure total for the year needs to be taken off your income for the year as that is your profit. Working monthly on expenditure off income is misleading.  But do the totals monthly as you need to be aware how much you are spending, especially if it’s consistently above income as that way disaster lies.

 Accountants come later, you use them to save on tax, but for that you need a proper income.

Employ a book-keeper before an accountant  and don’t do that before you have a solid working business.

You need to do the books to begin with, so that you know what’s happening.

Keep records as above and phone your tax office after a few months when you have a business and tell them what you are doing and they will send you forms to register. They will also give you a phone number to get help with how it works and what your allowances are. Use that.

You don’t need a business account they are expensive.

If you  have a shared bank account open one in your name, possibly in a different bank but it should be a personal account.

Then join something like Paypal so you can take credit cards. You will pay them commission on each transaction but there are no other costs.

You need a situation where if you earn nothing, you pay nothing.

Don’t it’s not an investment.

Until you have a proven product and sales you should not buy in bulk, it might make your price look attractive but its a red herring because:

If you buy 100 widgets for £100 the cost of each widget is only £1  but only when you have used all the widgets. If you sell  just 5 widget using products the cost of each widget is then £20 See what I mean? Its cheaper to pay the higher individual cost.

Make to demand not to your expectations.

Don’t make product expecting high sales, that’s an expensive game

Establish a show fund

Right from the beginning put £30 a month in so when you are grown up enough for a big show you have the money which often has to be paid in advance. Return the stake  to the fund after the show or  as much of it as you have left. If you start with capital, lock £1000 into a show fund but don’t use it at all in the first year as you are too likely to crash and burn.

There are all kinds of pricing formulae and none of them work

Pricing handmade in the UK  is an art not a science

This is why :

An acceptable price  depends on who you are selling to

Different products have different price ceilings

There is a soft margin around prices which means you can put them up or down and make no difference to the sale so it always makes sense to push to the upper limit and formulae don’t do that.

Your circumstances determine what you need to charge

Labour cost  is always a nonsense as you don’t just make  you have to spend about 70% of your time trying to sell. That has to be paid for too

None of this stuff can sit in a formula you have to price , step back and think all the way round.

Your prices are more likely to be too low than too high.

Underpricing builds in failure.

How many you sell is irrelevant to profit.

If I sell 20 Lovelies for £2 profit each that is not as good as selling one Lovely for £42 profit.

Only consider wholesale if you enjoy repetitive making and can make a living from it.

Selling one expensive Lovely will take effort but selling 20 cheaper ones will not necessarily be easier.

So You Made It .

 You can do what you need to do to know whats going on and to make the right decisions.

It isn’t really such a big deal after all.

Now you will have to find something else to worry about.


Juicy Customer Segment

 Many craftspeople are convinced there is no money out there , but it still exists and here is a rich pocket who are more than prepared to spend.



This is the illustration that Grayson Perry did for the latest RA magazine, in it he depicts the typical  visitor to the Royal Academy summer exhibition. Heartlands British upper middle class.

Do these people buy art ? Is the Pope Catholic? You bet they buy art . The RA takes 30% commission, back in  2003  they were already making two million pounds from the show. These people buy and buy, they have London flats, country houses and seaside places and in each they want to express their immaculate up to date good taste.

Don’t imagine the rich aren’t still with us, they are still there, a bit more discreet, and so over their  bling years.  Now they Care. They buy handmade, they buy craft, they have craft every where. And when they havent had time to buy the real thing from an individual maker, they buy it fake from Cath Kidson 

 They want to play happy families and create idyllic memories. Rock, Southwold, Newport holidayers whose children go to boarding school and are looked after by au pairs. Mothers who work desperately hard to keep it all running and sit in their offices and feel guilty that their families are not being nurtured.  They hanker for  handmade because it represents time and that is what they havent got.


Handmade craft buyers are predominantly female.  Even if he pays, the motivation to buy is female.


They are females of all ages, but largely twenties to fifties The young female buyers are the surprise, but its easy to see what is going on, it’s all  about nesting. The rental flat gets decked out in handmade, weekends are  all  cupcakes and tea dresses. They drool over Kirstie Allsops Handmade Britain


It’s a mutation of  the naughties’ spirituality search, it’s trying  to find value, not financial value, but emotional value.

 The threat of losing your job, even if you do it well, is disheartening, the need to stay in a unfufilling job is also emptying, long hours drain energy. There is never enough time to do what you need to do, let alone to be who you want to be.

 There seem to be a group of people who stand outside these miseries, the people who live simply and make by hand.  Your customer  is wanting to buy into your world. They want to live your life vicariously.


Here are the rules you need


 This customer category expects  them,  they think buy cheap, buy junk


 They splash the cash but are mean about postage as they know the real cost


      Pander to their fantasy


These buyers are almost all women


        Share your life, they aspire to it, blog if possible but in small helpings


       Handwrite, don’t print , be personal;  no business speak


     They are time poor, if they want something custom-made they will ask for it


Online use PayPal or similar try not to use selling sites with lengthy sign ins for customers


They are buying into an ideal don’t spoil it


Heavy on nostalgia works well


So that it can be  bought guiltlessly as a household necessity

 £45 tea cosy made by Sarah Hancox of A Very British Affair nobody aims at the target group better


How good are you at attracting this group of buyers?   How well do you fit in?  Give yourself one point for every one of the above  you do okay and two points for each one you do very well.

Any thing over 12 and you have this licked, under 7 and you’re in trouble, get it sorted if you want to attract this juicy part of the market

Links to places that are  on message for this customer segment

Selvedge Magazine this is their own shop

Little a Designs online website

Craftsperson’s Seven Deadly Sins

So your business is up and running, BUT how many of these Deadly Sins are you committing?


REALLY? Yes really. You wanted to be a craftsman because you enjoy making, so you are making stock.

Once you have lots, you will go and sell it, until then you will make. Lots because you don’t want to run out  and find yourself turning customers away. Also customers need lots to choose from, the more you can offer the better chance you have of a sale.

BUT it’s just not going to be like that. You will sell some, or possibly none, not all  of what you have made. Stuff sells in fads, one day everyone wants one thing, another something different. If you carry a lot of stock of any item you will at some point be left with a lot of it as buying patterns change. Make to replace sold pieces or to create a new product

CHOICE confuses the customer, they find it impossible to choose so they don’t buy. Choose between three colourways and you have a favourite, ten and you struggle. You need impulse>choice> sale  to be simple not complex.

CONSIDER: Cost of materials; time taken to make; room needed for storage and its realistic chance of being sold within the next month. If you make ten, sell six, then the cost of the unsold four have to be borne by the six you did sell. The ideal is make one, sell one.

Overstocking: Innocent or Guilty?


When you were little the fun of nearly all the make-believe games lay in the setting up, arranging the shop, the teddy bear school, the train set . Dont play at setting up a business.

You don’t need to buy headed STATIONERY nor a thousand business cards, run your stationery off as you use it on the computer and buy low-cost 100 run business cards from someone like Moo cards Why? because what needs to go on your stationery will change rapidly.

Dont even open a BUSINESS ACCOUNT. It will cost you a lot of money in bank charges to run. A self-employed sole trader can use their personal account and PayPal or similar to take credit and debit cards.

You are selling handmade so HAND DO as much as you can, it does not make you look unprofessional, it makes you look like a genuine hands on craftsperson.

Dont tie too much money up in MATERIALS even if buying in thousands does seem to do wonders for your unit cost,  as you need to use every last scrap to achieve it.

Overspending on set up:  Innocent or Guilty?


If you sell online but do not have a direct selling website with a shopping cart which you have daily control of, then  you have no website.

Being on Etsy or similar just won’t cut it. You need to have somewhere to tempt your loyal customers.  Why would you want that to be Etsy when they might well get waylaid by other craftspeople’s offers and spend there and not with you?

A website helps you consolidate as you gain customers. Do some computer web design evening classes, then BUILD YOUR OWN SITE. It won’t start great, but it will get better and better as you learn more and realise how to do things. Buying off the shelf by employing a web designer means his fitting your business to his design, whereas you will fit your design to your business and it will evolve with you.

It also means that all editorial and social media mentions have immediate sales potential through your website. Without a website you are always paying a premium to sell your work through commission or exhibitor fees. You need to break free of that as soon as you possibly can.

No website: Innocent or Guilty?


It is remarkable how few craftspeople really understand where they are in the simplest of terms. They do not know how much profit they are making or even their actual turnover.

It’s about EVASION, as if the profit police will come and lock them up. You have to know. The figures are your playthings, half an hour with a calculator a month will help you see what you need to do. Where is the money being spent and  where is it coming from? Is it better or worst than this time last year? Inside even the worst of figures sits some helpful stuff . The unopened bill destroys faster than the opened one.

 Poor Accounting: Innocent or Guilty?


Yeah that old bugbear. I am talking to the hand here. You are not going to listen. I don’t know why I am bothering .

I have heard every excuse in the book, “it’s not art”, “people can’t afford it”, “its only made out of paper”

So you would rather fail, than ask customers to pay more , can’t you see that is irrational? Yes you will lose sales if you double your prices, you could lose half your sales. Now please get a cup of tea, go and lay down in a darkened room and think about that. Think hard.

Got there? Worked it out? Yes exactly that would be great, you would get the SAME MONEY FOR HALF THE WORK .

Be experimental about putting your prices up, try three different prices on similar pieces and you will find your customers don’t automatically buy the cheapest. A Harrods buyer knows that Primark sell clothes cheaper but that isn’t what it’s about for them.

Always factor in time it took to make, not just in terms of how much you think your labour is worth per hour, but also look at it this way. If your selling line takes five hours to make and you can make for three days a week and you sell it for x then as you can only make six a week  it has to be sold at a least a sixth of a weeks income.

In pricing remember the SAS motto He who dares wins.

Cowardly Pricing: Innocent or Guilty?


Some makers are l shy and so they will do all kinds of things to not face their customers.

You have to get out there at the most basic level and risk a mauling. It hurts when the other stalls sell and you are a lonely island but it happens and you just have to be pig-headed and accept its the wrong place, and wrong people Try again.

You have to understand you are part of what they are buying into, your skill, your lifestyle, so share stuff, if you live in a little cottage in the deepest wood Tell them. BE INCLUSIVE.

Customer Shy: Innocent or Guilty?


When you start out your expectations are often too high, the sooner you bring them down to earth the better.  Be determined, but be realistic or else you are going to feel DISAPPOINTED and unsuccessful when you are actually doing quite well.

£20,000 profit from a sole trading craftsperson is really good, anything over £10,000 is very respectable. It takes time, be patient, you will make  lots of mistakes, just learn from them.

Ignore the monkey on your shoulder who says you don’t have a real job It is about life choices People envy your way of  life it looks great from the solicitor’s office.

Set your mind to I AM NOT YET SUCCESSFUL BUT I AM GETTING THERE. It can easily take five years for a business to bed down.

Unrealistic Goals : Innocent or Guilty?

TELL ME your guilty score in the comments and where I can find you online. I will respond with a piece of tailor-made advice for your enterprise

101 comments later :

I am calling a halt on the tailor made advice on this post as I  want to write new stuff now. Thank you if you  took up the offer and especially to those who came back with feedback on the advice they got.

I frequently felt that I was shooting from the hip and what I had to say would have made harsh reading for many, but finding someone who will really tell you what they think is near impossible and so I told it how I thought it was.