Business does not run on hopes and dreams, which is why the majority of businesses fail within the first six months of opening their doors. Additionally, most that survive their first year do not survive the first five. It is a little known fact that most businesses are working with their doors open for about five years before they turn their first real profit; most rely upon loans, second jobs, or even borrowing from family to get off the ground. While there are many options to stable new business-owners that may make opening their new business easier, many within the community suffer from cash flow problems, whether due to the economy, or mistakes made during youth. The option that is open to everyone, no matter what those issues are, is self-funding.
If you’re like most people, you don’t have a lot of money to invest in starting your own business, and this creates a cash flow problem. Like it or not, all businesses run on money, and when you are a businessperson, money is the Alpha and Omega of your life. Many artisans starting out will probably dislike that sentence, but you cannot eat on hopes and dreams. Building a business is expensive; expensive in time, expensive in energy, expensive in effort, expensive in emotion. Money is what makes the world go round, not because avaricious people want it(though they do), but because it is a measure of those four things.
“Money is the measure of value placed on a good or service; business is the art of defining that value.“ -Capt. Eryk Vallerand, Corporate Concept
Goods and services are produced by people, who spend their time, their energy, their effort, and their emotion on producing what is wanted by another. It is the basis of the Capitalist system, and it is how you, as an artisan, must face the world as you start your own business.
As a self-funding Artisan, you will have both the slowest and most stable start up of any businessperson. Most artisans leverage their skills rather than their funds, and so building an inventory is going to take time. When self-funding, this is always the largest expense you must deal with. Unless you have unlimited resources of both time and money, you will need to remember that you can only build your inventory a day at a time.
Starting Out: Getting what you need.
Once you have decided what you are planning on producing for a good or service, you must start to build inventory. Note: This is not a good guide for musicians, as most musician startup costs are all at the beginning and require less rotating inventory. It can help with your merchandise sales, but if you want to start your own Steampunk Band, start by asking another band. Purchase the raw materials you need from the most available supplier you can find, usually a local supply shop in your area (Hobby Lobby, a leather shop, etc.). They usually offer small quantities at reasonable prices; you can worry about buying bulk items once you’re established. Next step, start making.
The Folly of Every First-time Businessperson
It is summed up in these words: “I don’t have enough materials to start producing what I want to sell.” If you have said these words, you can join the ranks of about 90% of every business person at some point in their careers. The first thing that needs to be remembered is that just because you can’t produce in large quantity, doesn’t mean it’s not worth producing. There are countless ways to make the time you spend producing with minimal supplies worth while, and the most important part of that is experimentation and practice. Although those two words can garnish an article of their own, suffice to say, it is important that you use the time you have wisely by not sitting on a bunch of materials and not doing anything with them. Produce. If you have an opportunity, show off what you’ve made. You might just make a sale.
The time you take to put together your first year’s inventory may in fact take more than a year. Be prepared for this, and don’t get discouraged, as it is more important that you have enough money to eat while you build your inventory than it is you purchase a lot of raw materials at the expense of your well-being.
That being said…
It’s time to pare down on non-essentials
If you want to start your own business, especially self-funded, it’s time to take a frank look at your finances and look at how much waste you have in your monthly expenditures. Go to a fast food restaurant twice a week? You can easily make three meals for the price of one at any of them, have them be of better quality, and not be as bad for you. Those of you that are anime fans (don’t be ashamed) will be happy to hear that Japanese cooking is generally one of the least expensive and healthiest ways to eat regularly. For the price of a couple of cookbooks, you could save yourself a lot of money in food, by cooking something other than frozen foods and buying fast food. You might find your energy gets better too.
If you have subscriptions to games or publications that you hardly use or don’t need anymore, it may be time to revisit those items as well and nix them. Every penny you save can be put toward building your business. This is not to say that you should cut out on contracts or leases, just don’t add any more once these are up. If there are leases you can cut down on (rent-to-own non-essential furniture/electronics) or other items you don’t need (do you really read those National Geographics?) then that might be a good place to start.
Finally, funding the first Trade Show
Once you have gone through the time and effort to go to your first convention, which you all shall know as Trade Shows from now on, you must find a way to fund it. There is one real method to funding your first trade show: save enough to cover it, then reimburse yourself out of your profits. Remember, that you will probably cut a loss on your first two to three years of shows; this builds your reputation and allows you to get a pipeline of individuals that like your work. Most of all, when you put money from each sale into your cash box (don’t have one? Buy one! They sell them at Staples! Better yet, for the price of most decent costume pieces you can buy a cash register there!), do not consider it profit until you have covered all of your expenses.
You did use Artisan Math right? No Guilt Math is allowed for an Artisan; use Guilt Math and you will starve.
While an entire primer can be (and has been, many times) written on the subject of funding your business, these basics should help you get your self-funding venture off the ground. Keep your head high and your way clear.