I recently said that I don’t relate to a lot of people who read my blog anymore because of how my own business has matured. In response, one of my readers encapsulated a sentiment that perfectly jives with what’s been bugging me about writing for those who haven’t yet made the jump from hobbyist to professionals:

“I have been rethinking this very issue of late and though I don’t have a business background, I believe the problem is what’s called a business model. We “mom/solo” enterprises were sold a bill of goods that if we worked 60 hours a week, wrote a blog, had a Facebook page and tweeted, etc. if we did what we loved and were passionate about, THEN the money would follow. It doesn’t. It’s not a business model that works. It’s a pipe dream that comes true for very, very few. It’s just the way capitalism and the free market works”

In short, YES! Who’s selling this fantasy and why?

1. Failed entrepreneurs
There’s an entire cottage industry out there of self-appointed business coaches who never succeeded at their own business but want to give you advice on your business. They tell you exactly what you want to hear; that if you just work hard enough and blog and Facebook, you too can get rich. This is usually said in flowery language and accompanies pitches to buy ebooks and ecourses and attend seminars on touchy-feely subjects like story telling or showing the real you to customers. The language is always carefully crafted so that it appeals to creatives who have no interest in dull stuff like sales and accounting and SEO. It doesn’t delve into the nitty-gritty of cash flow and supply chains and vendor relations — that stuff is dry and complex and doesn’t usually appeal to creative types, even though it’s the stuff you most need to know in order to succeed.

2. Marketplace websites that target wantrepreneurs
I see some culpability on the part of sites like Etsy as well. Whether intentional or not, they are in the business of selling the fantasy that anyone can start a “business” with just a little creativity. You don’t need a big fancy website or technical know-how or anything — just pay a few cents per listing and you’ll be in “business”. Anyone with an internet connection and a dream can do it!

People fall for these promises because they’re appealing. Who doesn’t want to make a living hanging out in their PJs all day and crafting? The myth is fed by smiling photos of Brooklynites in hip studios in Park Slope who’ve quit their day jobs and struck it rich. “You can do it too!”, is the promise. These stories never delve into what’s really going on there. How many hours does the person work? How much capital did they invest? How much revenue is their business netting after expenses? What specifically do they do all day? Who have they had to hire to help them grow?

When I talk to people who are really in business they all have their horror stories of subsisting on mayonnaise sandwiches, trying to decide if they make payroll or pay the mortgage on their house, investing their whole retirement savings. One of my entrepreneur friends lost his house this year to foreclosure in order to save his business. Perception-wise, I am sure all his customers see is a success, a guy who’s been all over TV and in magazines and is really making it. The sacrifices to get there are never really talked about. It’s the story you aren’t being told most of the time. It’s not a fun, glamorous job; it’s a difficult and exhausting job, and if there was more truth out there about what the job really is there would be fewer people applying for it.

So what’s the reality?

The reality is that creating and running a successful business is hard, expensive and time consuming. I’m telling you this as a business owner shifting thousands of units of product every month to retail and wholesale customers. My business partner and I regularly work 12 hour days on our business and I personally invested tens of thousands of dollars of my own money before we became profitable. (This is actually fairly modest start up capital, by the way.)

We don’t spend our days crafting. We spend our days managing people, making sales calls, managing the company’s finances, coordinating with vendors, and generally solving problems that make us want to tear our hair out. We spend less than 5% off our time doing creative work.

When people find out what I do for a living they often say “that sounds like so much fun, how can I do that?” My first question is usually “well do you consider yourself a creative person? I mean, do you like creating, drawing, crafting, etc.?” If the answer is yes I usually say “then you do not want to do what I do for a living.” The truth is, in addition to the need for time and money, you need a willingness to spend your time doing things you don’t especially like doing. No one likes dealing with the vendor who is ripping them off. No one likes calling that buyer every week and trying to sound upbeat and not annoying while you try to get a purchase order out of her. No one likes staying up til 3am proofing an order that was delivered from a supplier late and needs to go out tomorrow.

But, Meredith, I don’t have $50,000 laying around and I can’t work 80 hours a week! I have kids and a day job! Making sales calls gives me panic attacks!

I totally get it, but given those facts you’re probably not going to be able to develop a mature and highly profitable business. You might be able to pull in some extra spending money, but you’re probably not going to quit that day job or build a seven figure enterprise.

So if you’ve found yourself stuck and frustrated and don’t understand why you’re not making a zillion bucks on your craft, take stock of what’s really going on. Are you sufficiently capitalized? Are you putting in the requisite hours? Are you taking on the unappealing but necessary tasks? If the answer is no and you aren’t going to change any of that, accept that what you’re doing is for fun or to make some spending money. It’s perfectly okay to do that and it’s a lot less frustrating than spinning your wheels and feeling like you’re “failing” at something you aren’t even really doing to begin with.

One of my readers commented about “that horrible catch-22 where my husband can’t cut his ‘real job’ hours until the business is making more, but the business can’t make more until he cuts his ‘real job’ hours”. This is a pretty common situation and it’s where I was when I decided to focus on my own business full time. Here are three things I think you must do to make the transition work.

1. Have cash reserves
There’s no way around this, you are going to have to assume some risk. If you don’t want to do that or can’t do that you are not going to be able to quit that day job. Don’t expect investors or strangers on Kickstarter to give you that money when you are taking no risk yourself and not putting up your own money. Things might get bumpy here and there once you go to work for yourself full time and you need to be sure you can pay your bills if that happens. Consider options like a home equity line of credit (interest rates are lower than a credit card and the interest is tax deductible in the US), retirement savings, or personal savings. I suggest having access to about 6 months worth of income at a minimum. It’s possible to get outside investors or a business loan but with no collateral or capital of your own on the line that can be pretty difficult.

Make a list of your monthly expenses. How much do you absolutely HAVE to make to survive? What could you cut back on if you had to? Be sure to account for costs like health insurance (if applicable) and taxes. Once you have this information figure out how you’ll fund 6 months of those expenses with zero income if you had to. If you can’t get access to that much cash now focus on a plan to save it up.

2. Have a specific plan to replace your old income
I can’t stress the word specific enough. How exactly are you going to earn the money and how are you going to somewhat accurately make those projections? Don’t say “sell stuff”. What exactly are the sales goals you need to make? When I decide to work 100% on Ex-Boyfriend we made a list of every upcoming pop up retail event we were definitely doing and what we expected sales to be (having done many of those events in previous years). We made a list of every wholesale lead and account we had and what we expected those to generate for us income-wise based on order history and current talks with those customers. We looked at our online sales from previous years and where the sales came from (ads, SEO, media placements, etc.) and made projections about where we expected online sales to be this year based on past performance. We had lots of specifics on costs and sales history that allowed us to forecast expected income.

We set goals that were reach, expected and bare minimum so we knew what we wanted to do, expected to do and absolutely had to do sales-wise to replace income that was being given up from another source. Every step along the way we were comparing our projections with the reality. Sometimes we made the reach goal, sometimes we made the bare minimum. Rarely (though it happened) we didn’t make the bare minimum of expected money from an income source. On average though we made our reach and expected numbers, which is what needed to happen.

If you find yourself struggling with the specifics of how exactly you’ll earn the requisite income, you aren’t ready to quit your day job.

3. Have a cut off number/date
Have a back up plan for what you will do if you aren’t meeting the expectations set up in step 2. How low can you allow the cash reserves to get before you have to get a new job? At what date must you be profitable by to continue with your plan?

If you aren’t making your sales goals you will have to find work again, you want to make sure you don’t allow your cash reserves to dwindle so far down that you’re desperate and destitute. It’s important to always compare your goals and projections with reality to make sure you’re staying on track.

Most business websites will talk at you endlessly about online marketing. How to do advertising, how to do SEO, how to optimize for mobile, etc. Let me preface what I’m about to say with this: These are all worthwhile things. You absolutely can see tremendous benefits from all of these tools and it’s good to know about these things and understand how to use them and why you might want to invest in them.

Now all of that said, in the last 6 months I’ve paid a lot less attention to online marketing. I haven’t spent a ton of time on our SEO, I haven’t been running a ton of ads, I haven’t been desperate for more Twitter followers. Despite this digital neglect our company has grown tremendously this year (even though we focused on those things more in previous years).

What the heck? How are you growing if you’re not blowing up the internets with your marketing?!

When 2012 started my partner and I talked about what we wanted for our business and none of the things we said had anything to do with the internet. We said “I want to be on TV/movies, I want to do events and I want to be in the fucking mall”. (We say “fuck” a lot around here.)

Just about all businesses have limits to their resources. The bigger you are the higher the limits are, but we pretty much all have them. We didn’t feel like we had the resources to do everything under the sun to grow the business so we settled on picking 3 things that we were going to hammer away at this year and really focus on them. That meant backing off some of the resources we’d sunk into online marketing in previous years.

Why did you pick those 3 things?

We really have one primary driver in our business, we want to be famous. We want everyone to know and love our brand. We want to be everywhere and have an army of loyal fans. So we had to pick priorities that served that goal. We didn’t just want sales, we wanted converts.

Wholesale was definitely our top priority this year. We picked it because we know when people see our products they fall in love. Our reasoning was the more stores carrying our line, the more people will see the products and fall in love and the more products we’ll sell. We felt like there was no substitute for being able to see our products up close and touch them and try them on.

Events were priority two, but the thinking was the same. If we just show up at festivals and comic cons and other pop up retail events and set up shop people are going to buy the heck out of our products.

Both pop up retail events and being in stores offers immediacy with the product that selling online doesn’t offer.

The media placements were our third priority, and we chose that as a priority because we wanted to create a sense of legitimacy around our brand that would appeal to wholesale buyers and consumers. We wanted to make people understand that we’re a real brand. We’re in the media, we’re on your favorite TV show, we’re in stores! We are not fly by night hobbyists working out of our mom’s basement.

What happened to your online sales and overall revenue?

While overall revenue increased quite a bit this year, online sales didn’t grow a ton. We definitely made more money via pop up events and wholesale. We still made money with online sales but it wasn’t our primary source of income like it had been in previous years.

Should I ditch online marketing too?

I wouldn’t say you should scrap online marketing altogether, we certainly didn’t. I will say you should pick three things for 2013 that are priorities for you and think carefully about what those things should be. Maybe online really is a goldmine for you and you should boost your efforts with online marketing. Certainly don’t choose to stop focusing on digital marketing simply because you don’t like it. What you focus on should be dictated by what drives revenue and growth for your business.

Pick your top goals for 2013 and let that dictate how you’ll spend your resources.

If you visit Smaller Box regularly you may have noticed the posts haven’t been as frequent and I haven’t sent out newsletters lately. Why is this?

1. I’ve been super busy with my own business
For the longest time I had been balancing my work on my clothing and accessory label with tech work. I did it because I was making tons of money doing tech work but it was also keeping me from making as much money as I knew I could be making with Ex-Boyfriend. I finally gave up tech work entirely and have been 100% focused on Ex-Boyfriend, working 60-80 hours per week along-side by business partner and husband Matt Snow.

We’ve had laser-like focus on the wholesale side of our business and started partnerships with some pretty major retailers. Our eat-sleep-breathe obsession is getting our products in just about every US mall in the in the next 12 months. This hasn’t left me much time to do anything else, which brings me to my next point…

2. I’m not sure how to write for Smaller Box these days
Most of my readers are in a different place with their entrepreneurial endeavors. A lot of my readers are running one woman shows and have no desire to be huge or build a multi-million dollar brand. I’m not disparaging that choice, but it’s not where we are with our business.

In the time since I started blogging here the questions and business situations I hear about haven’t changed and I can’t give the same answers I gave a few years ago knowing what I know now. I used to encourage everyone to make their situation work and I can’t keep doing that.

Creating a successful business requires a much steeper time and financial investment than most people are prepared to make, and that’s the real reason many businesses don’t grow or fail entirely. I can’t cheerlead the cause of starting a business with only a few hundred bucks in your spare time because it’s not something I believe in. I think it’s a road to heartache and frustration and I can’t encourage it. Yes, you do hear success stories about people who made those start up conditions work, but it’s not the norm, it’s not something you should count on.

I am hoping to still get posts in when I have the time, but at this point I really only feel like I can cover topics that are relevant to where I am with my business currently and it may be topics that aren’t relateable to hobbyists. Hopefully it will still be material that will interest some of you and maybe bring in new readers who are in the same stage with their careers that I’m in now.

We just released a video showing how we designed our Liquid Courage tees and posters. Check it out below:

You can do something similar with your own creative process. Show your fans how your products are made so they can appreciate the work that goes into the finished pieces you sell.

I wanted to bring up a topic I hear a lot about on some design forums, but that gets little discussion from makers, and that’s spec work. Spec work means doing work on the speculation that you’ll get paid. I’m against you doing it and I’m against you asking other people to do it.

First of all, spec work comes in all sorts of forms. Sometimes it’s someone outright asking you for it. You’ll hear a story like “I’m starting a new business and if you do my website for free I’ll give you 1% of the first months sales” or “I want a new logo so I’m having a contest, best logo design wins a free prize”. Design contests are pretty much all spec work. You’re going to do design work and they’re only going to pay you if they decide they like the finished product.

Imagine if the entire economy worked this way. What if I decided I was only going to pay my dentist if I felt my teeth looked sufficiently white after a cleaning? Imagine if I told my divorce attorney “I’m only paying you if you get me 75% of the assets.” Other professionals don’t work under these conditions and designers/artists shouldn’t either.

Here are two of the most compelling reasons to avoid doing and asking for spec work:

1. It devalues design
If you’re one of those people who’s always pissed when someone criticizes your pricing or complains about how artists are underpaid, you should be the last one to do spec work or hire on spec. There’s a very good chance of the artist/designer doing work and getting paid nothing, which is about the worst deal you can get as an artist/designer. Even if you are looking at entering a design contest for a well known brand because you want the bragging rights or exposure, please know that neither of those things pays your bills.

Anyone seeking spec work is showing no respect for the artists’ work or time and thinks that you should work for free. Don’t encourage this mentality by actually doing it. It only perpetuates the belief that design/art is ubiquitous and no one need pay for it.

2. Good designers/artists don’t do spec work
While there are exceptions to this rule, generally speaking good designers and artists won’t do spec work. They usually value their own time enough to not get involved in that kind of work and they have enough paying customers to actually keep their schedule full of work that is paying them.

What this means for you is that if you are trying to get work done on spec (for example holding a logo design contest) you’re not going to get the most talented people submitting work. People willing to take on spec work might be too inexperienced to know better or not really be skilled/talented enough to get enough paying customers to occupy their time. Even if you have a good designer doing spec work, you’re not going to get their best work since you’re not really working with them. The best contracted design (whether it’s a logo or t-shirt design or new website) comes from a client working directly with an artist or designer and going through feedback and rounds of revisions.

If you need design work done check out portfolios on sites like Coroflot or Behance. Look for a portfolio that represents the kind of work you want done on your project and then contact that artist or designer about doing the work for you. If you can’t afford their rate wait until you can or keep looking for someone whose rate you can afford. Accept that this is a cost of doing business and be willing to pay for design work that you need done so you can get a product that serves your business the best.

You’ve probably heard this before but it bears repeating:

“If a customer has a good experience with a company they will tell one or two people, if they have a bad experience they’ll tell ten people.”

I can’t emphasize this point enough because I see the good and bad at work all day and if you own a business it’s important to think about this.

To begin with, at Ex-Boyfriend we strive for 100% customer happiness and we’re probably pretty darn close to that. This doesn’t mean we’re perfect, but when something goes wrong for our customers whether we are to blame or not, we try to fix it. If the postal service loses a shipment, we replace it on our dime. If we mail out a wrong or defective item to a customer, we don’t have them bother to mail it back unless they want to. If they want it off their hands, we send a prepaid postage label. If they don’t feel like mailing it back, we still replace the item fast and free of charge.

Does this sometimes mean we lose money on an individual transaction? Yes. But the rate at which this happens is very low, far less than 1%, and what we get in return is extremely happy customers who love us and tell people to shop with us and buy from us again and again. We are okay with losing a battle here and there if it means we’re winning the war. What we want with our customers is a long term relationship and that means treating them as we we’d want to be treated if we were the customer.

This all might sound like no-brainer stuff but you’d be amazed at how often I run into the opposite attitude when I’m a customer. A few months ago I decided to never buy anything ever again from a supplier I’d been buying from for years. I’ve spent at least $100 with her on every transaction and probably ordered from her at least half a dozen times before. The orders were always great, the replies to email were always fast. So what went wrong? The postal service lost a shipment she sent me. When I told her it was never delivered (even though the USPS marked it as such) she told us since the delivery confirmation says it was delivered she wasn’t replacing it and if we wanted our stuff we could buy it again at full price.

Was it the supplier’s fault our idiot mail carrier likely left a box of product unattended on our doorstep in the middle of Baltimore city and it was probably stolen 2 seconds later? Nope. But it’s not my fault either and the bottom line is I spent about $150.00 on a shipment I never got and I was pissed. This supplier was willing to do nothing to help us or try to make the situation right. So that was the end of her consistent business from us and the end of me telling other businesses to buy from her. Was it worth not replacing our $150 shipment that probably would have cost her less than $50? I wouldn’t think so. But this is the kind of short-sighted thinking I see from other businesses all the time.

Most of my suppliers and vendors aren’t perfect. Most of them screw up sometimes. The reason they continue to get their share of our company’s six figure operating budget is because of how they handle their mistakes. The vendors we keep are the ones who fix problems at their expense instead of leaving us on the hook.

Whether your customers are other businesses or consumers, making them happy can have a huge impact on future business. You’ll never know how much referral or repeat business you lost from pissing someone off. It’s not something you can measure. What I can see from doing our best to please our customer is the emails we get every day raving about our amazing customer service and how much our fans love our products.

Got a customer service story to share? Post in the comments below!

“If you don’t understand why this is awesome, then get out of my office!” – overheard from a customer who bought a diver riding shark messenger bag

My partner and I recently decided to stop applying to craft shows. The reasons are many-fold, but we’re not giving up on doing pop up events. We actually make a ton of money at them, it’s just a matter of picking the right events for our business. Lately, we’ve focused on doing comic cons, with a few other niche festivals here and there. Here’s why we’ve fallen in love with comic cons.

1. No Juries
Comic cons aren’t juried, so there’s no hipster police to appease. My partner and I have no real desire to put a bird on it, we like our space cats and pterodactyls and we’re not going to change that. When our monthly sales goals are at stake, we can’t leave that kind of thing to the whims of craft show organizers.

2. Bad Weather? No Problem!
Since comic cons are indoors we never have to worry that it’s going to be too hot, too cold, too rainy, etc. If anything bad weather works in our favor since it’s all the more reason to come indoors.

3. Gigantic Targeted Audience
Comic cons draw a big crowd that appreciates our absurd and nerdy style. Cons we attend draw anywhere from 30,000 to over 100,000 people. The best part is it’s pretty much all our kind of people. Comic con attendees aren’t looking for feather silhouettes and nautical stars, they want our space cats. We love spending the day with hordes people who get our sense of humor and are as excited about our designs as we are.

4. Surrounded by Pros
While craft shows tend to attract mostly hobbyists, exhibitors at comic cons are usually pros. When we’re working on set up or break down before and after the show we can trade stories with the other exhibitors and swap useful information about other events, suppliers, etc. It’s nice to be able to talk to other business owners who make their living doing the kind of thing we do.

Takeaways for you: I’m not suggesting all my readers start exhibiting at comic cons. If your products aren’t on the nerdy side, they’re probably not your kind of event. What I am suggesting is looking beyond just craft shows to see what other events attract your target audience. Consider other types of cons, festivals and events that draw a large crowd. Make a list of the types of people who buy your products and then look for pop up events that draw that audience.

Spring is in the air, and with the spring season comes several shopping occasions including:

• Mother’s Day
• Father’s Day
• Graduations
• Weddings

How are you going to get your products in front of more customers shopping for gifts for loved ones or a little something for themselves? How about a placement on I Shop Indie? I Shop Indie allows you to join forces with other indie designers to buy advertising and get your products seen on a bigger budget for a fraction of the cost. Here are the details on our upcoming spring membership:

How it works:
1. Designers wishing to participate pay a membership fee to belong to the co-op

2. The co-op dues are used to buy ad space that directs traffic to Ishopindie.com’s

3. That ads bring the customers, who see your lovely products featured on I Shop Indie

4. The customers find what they want, click and are sent to your online shop to make a purchase

What you get with membership:
1. 10 products on any category page of ishopindie.com.

2. One product featured right on the home page, which is the first page our visitors will see when they click on our ads.

3. 2 bonus items can be listed on the “sale” page.

4. Your products will appear on our I Shop Indie until June 30th

5. Your promotions, sales, coupon codes, etc. promoted to our monthly mailing lists, we have over 3,500 opt-in subscribers! You will be able to promote on our lists for our April, May and June issues!

6. Your news, promotions, sales, etc. promoted on I Shop Indie’s Twitter and Facebook accounts until June 30, 2011!

When/Where will I Shop Indie Advertise?
From April 15 though mid-June you’ll see ads for I Shop Indie’s spring season website on several high-traffic sites including Design Sponge, Design is Mine and A Softer World.

What Our Members Have to Say About I Shop Indie:
“I’ve had a lot of traffic, new people signing up for my email list and quite a few sales from the holiday promo, so thanks! Co-op advertising has been successful for me.”
Amber Coppings, Xmittens

“I’ve been very pleased with my participation in the I Shop Indie program so far. It’s been one of the biggest sources of traffic for my shop since I started and it’s led to some definite sales. ”
Mallory Whitfield, Miss Malaprop

“Thank you so much as I Shop Indie has gotten me press coverage with this journalist. Thank you so much. Much appreciated for everything!”
Charmaine Leung, Go Jewelry

How much does membership cost?
Membership will be $99. This includes a full year of appearing on the co-op site, 3 months of marketing on our newsletters and social media pages and all the traffic from our ads that will be running April through June!

Are there any discounts available?
Yes! Pro-rated pricing is now available. Contact me for details.

Space is going to be limited, so reserve early to secure your spot. You can sign up below and I’ll send you an invoice via Paypal.

When we started our business, we were hobbyists. We didn’t make much money and our expenses were minimal. We collected piles of receipts and stuck them in folders for doing our taxes at the end of the year. Fast-forward a few years later and we’ve had to become a lot more meticulous with our accounting and bookkeeping. Here’s how we do it:

1. Update Books Monthly
With a growing business and six figure operating budget, we’ve got to stay on top of what we’re doing with our money. Both for our own information and for tax purposes. As much as we hate doing books (yep, it’s boring and tedious), we make sure to update our books at least once per month. To ensure that we remember to do it, we set a recurring reminder on our calendars so we’re prompted to do it at the beginning of every month.

2. Use Accounting Software
We use Quickbooks online to keep our books in order. We like it because our accountant can easily be granted access at tax time and all our information is stored securely off-site. There’s no danger of losing our records if something happens to a computer in our own office. The cost is minimal and the user interface is intuitive.

3. Banish the Paper
The best thing we’ve done with taming our books is going paperless. Receipts can fade over time, and if you get audited it can go as far back as 7 years. That’s a whole lot of paper! Going digital with our expenses saves us space in our office and filing headaches. Every time a receipt goes into our hands we scan it with an iPhone using ScannerPro. This handy app scans our receipts and stores them in our Dropbox. This means every receipt we need is in one easy-to-access place and can’t be lost or damaged since it’s all stored securely off-site.