What Have You Learned About Your Business Through the Budgeting Process?

compiled by Kirsten Coughlin


WHAT'S YOUR OPINION?

Each month, The Crafts Report invites readers to respond to the Public Opinion question. Responses are published in the magazine.

The question for the July 1999 issue is:

What holiday marketing strategies work for your business?

Please respond by May 1, 1999.

Send responses to:

In my profession of costume designing, both for online and for the Renaissance faire business, budgeting is crucial. There are so many things I have learned from past experiences that I now take into account. From production to marketing, displays and taxes, following a solid budget plan is essential to the continuation and success of my business.

Based on my earning potential, I learned not to spend more than I have, nor to buy more than I need, as I am a one-woman operation. My budget is based on cash flow. Taxes collected are left untouched until it's time to pay them. Credit card purchases are limited to absolutely necessary times such as pre-paid special orders or travel expenses. All sales are recorded and categorized according to wholesale, retail and mail order. Good accountability and consistency has made my budgeting much easier.

Last, but not least, I balance my checkbook regularly. I can't stress that enough to other business people. It can throw me way off if I'm not consistent with posting.

There are specific limits I have put on my advertising which have greatly helped. For instance, no more speculative commercial ads or radio promotions. No unnecessary charitable donations for so-called "visibility" or "it's tax deductible" reasons. This takes time away from productivity and potential earnings. I have targeted a fun market and focus my efforts within specific networks -- from online-related, professional associates and memberships in organizations with members who have interests similar to mine.

Time- and money-saving tips, such as buying in quantity at wholesale prices, help keep my stocked supplies from running out too soon. Less frills to customers on speculation of potential sales has also helped. For instance, if someone wants several swatches from me to be acquired from another fabric source for a costume they haven't even decided on, it's usually a lost cause. That usually means they want me to find these swatches and price the fabric for them, free of charge. This no longer happens, as I now require payment on any additional services involving my time. From consulting and shopping to special ordering, it's essential to be compensated. I wouldn't have said this three years ago before I learned to say "no."

It will suffice to say I have learned better business management and focus through good budgeting. This has given me more time to concentrate on the creative aspect of my work. I have also seen an improvement over the last three years due to more time spent on research and less on failed speculations. This makes my profession more fun and rewarding.

Rozani Navas-Smith
Rozani Designs
via e-mail

I have never done a formal budget outside of my original business plan, which I did four years ago. My store is a combination stained glass studio (myself and a couple part-time helpers) and retail art glass store.

I keep track of general yearly trends and place financial restraints on myself when purchasing. I know what I can afford to buy when placing orders at wholesale shows, and also for purchasing materials.

Christie A. Wood
Art Glass Ensembles
via e-mail

Budgeting is everything, but it is important to develop a clear understanding of money matters specific to the business of making one's own work. The budget should be tailored to the specific needs of the business and allow for flexibility and balance with the creative work process.

What I really have learned through budgeting is that most of the time, all you need is less than what you think, and to get you going you don't need much.

For me, it's vital to evaluate every single step I take, to know my limits and commit to a plan (in my head or on paper) of action. No hard-pushing really, just enough to keep it flowing.

A budgeting plan can help, along with a business plan, attentive to creative and professional growth. In other words, budgeting as a sort of balance between business and creativity, where "small is beautiful."

Emanuela Aureli
Jeweler
Oakland, California

Kirsten Coughlin is editorial assistant of The Crafts Report.

MAY 1999:

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