![How to plan and track the budget of your online handcrafted leather goods store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-8_d0368fd1-4a16-4c18-811e-ea3bc6fcf565.png?v=1715856396&width=1100)
If you don’t plan and track your handcrafted leather goods business budget properly, you're setting yourself up for failure.
When we developed our strategy pack for leather goods entrepreneurs, we saw a lot of business owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial sales.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your leather goods business's finances around and set you on the path to success!
Get the budget tracker tailored for leather goods shops
Most leather goods shop owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for leather goods shops
Here is an example of a (very) detailed budget for a handcrafted leather goods online store, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for workshop and storage space | $2,000 | $24,000 |
| Electricity | Power consumption for workshop equipment | $300 | $3,600 |
| Water | Water usage | $50 | $600 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $50 | $600 |
| Insurance | Property and liability insurance | $200 | $2,400 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Master Leatherworker | 1 | $4,000 | $4,000 | $48,000 |
| Assistant Leatherworkers | 2 | $2,500 | $5,000 | $60,000 |
| Customer Service Representatives | 2 | $2,000 | $4,000 | $48,000 |
| Marketing Specialist | 1 | $3,000 | $3,000 | $36,000 |
| Manager | 1 | $3,500 | $3,500 | $42,000 |
3. Raw Materials & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Leather | High-quality leather hides | $5,000 | $60,000 |
| Hardware | Buckles, zippers, rivets, etc. | $1,000 | $12,000 |
| Thread & Adhesives | Specialized threads and glues | $300 | $3,600 |
| Packaging Materials | Boxes, wrapping paper, labels | $200 | $2,400 |
| Tools & Equipment | Leatherworking tools and machinery | $500 | $6,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $500 | $6,000 |
| Social Media Management | Managing social media accounts | $400 | $4,800 |
| Influencer Collaborations | Partnerships with influencers | $300 | $3,600 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of tools and machinery | $200 | $2,400 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Licenses & Permits | Business licenses and permits | $50 | $600 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $300 | $3,600 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some leather goods shops make 5x more profit than you!
We have studied the strategies of the best leather goods shops in the world. Replicate them now!
What are the biggest expenses for a handcrafted leather goods online store?
Be mindful of these potential pitfalls. Here are five major costs every handcrafted leather goods store owner needs to consider, along with some tips on how to manage them effectively.
- Material costsHigh-quality leather and other materials can take a significant portion of your budget. Prices can vary based on the type of leather, its source, and market conditions. To keep these costs under control, focus on bulk purchasing, negotiate better deals with suppliers, and minimize waste by optimizing your cutting patterns. Avoid overspending by carefully selecting materials that offer the best balance between cost and quality.
- Labor costsYour skilled artisans are the heart of your business, but their wages, benefits, and training can be costly. This expense is always substantial because you need a talented team to produce high-quality goods. You can optimize labor costs by scheduling efficiently, cross-training your team, and monitoring productivity. However, be cautious not to underpay or overwork your artisans, as this can lead to high turnover and reduced product quality.
- Website and hosting feesRunning an online store requires a reliable website, which comes with hosting fees, domain registration, and maintenance costs. To optimize these expenses, choose a hosting plan that fits your needs and invest in a user-friendly, efficient website design. Overspending can occur if you opt for unnecessary features or an overly complex design that doesn't enhance the user experience.
- MarketingGetting the word out about your handcrafted leather goods is essential, but advertising can be expensive, whether it's online ads, social media campaigns, or influencer partnerships. Optimize this expense by focusing on cost-effective methods like the ones we recommend in our guide. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Tools and equipmentThis includes everything from cutting tools to sewing machines. These are costly because high-quality tools and regular maintenance are crucial for producing top-notch products. Optimize by investing in durable, efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets that you don’t really need.
How to spend less with your online handcrafted leather goods store?
Here are practical tips to help you, as a handcrafted leather goods store owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Source leather and other materials from local suppliers to reduce shipping costs and support sustainable practices. |
| Labor Costs | Utilize project management software to streamline workflow and ensure efficient use of artisans' time. |
| Utilities | Invest in energy-efficient tools and machinery to lower electricity bills. |
| Marketing | Run social media campaigns for your leather goods and collaborate with fashion influencers for organic reach. |
| Packaging | Opt for eco-friendly, minimalistic packaging and offer incentives for customers who choose no packaging. |
| Equipment Maintenance | Maintain a log for regular checks and servicing of crafting tools to extend their lifespan. |
| Website Hosting | Compare hosting providers annually to ensure you are getting the best deal for your e-commerce platform. |
| Insurance | Review your business insurance policies regularly to ensure they cover your current needs and compare rates. |
| Shipping | Negotiate rates with shipping carriers and offer combined shipping discounts to customers. |
| Product Photography | Invest in high-quality, durable photography equipment or hire a professional for occasional shoots to maintain a polished online presence. |
| POS System | Choose a POS system that integrates seamlessly with your e-commerce platform and offers low transaction fees. |
| Staff Training | Provide regular training sessions on new techniques and tools, and utilize free online resources. |
| Inventory Management | Implement inventory management software to track stock levels and reduce overproduction. |
| Technology | Invest in multi-functional crafting tools and utilize e-commerce management software for order processing and customer management. |
| Office Supplies | Buy supplies in bulk and go paperless where possible with digital order and inventory systems. |
| Licensing and Permits | Stay updated with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes efficiently to minimize fuel costs and consider using a fulfillment service for bulk orders. |
| Customer Service | Use customer relationship management (CRM) software to track interactions and improve service quality. |
| Returns and Exchanges | Implement a clear and fair return policy to manage costs and maintain customer satisfaction. |
| Product Development | Conduct market research to understand customer preferences and avoid investing in unpopular designs. |
| Workshops and Events | Host online workshops and events to engage with customers and showcase your craftsmanship without the overhead costs of physical events. |
Copy the tactics of the best leather goods shops in the world!
There are leather goods shops that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a handcrafted leather goods online store
Yes, some expenses for your handcrafted leather goods online store are just unnecessary. They don't contribute to increasing revenue or enhancing customer satisfaction.
| Store Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily impress customers and can significantly increase costs. |
| Premium Website Themes | Unless you are targeting a high-end market, most customers are satisfied with a clean, functional website design. |
| Excessive Product Variants | Offering too many product variants can complicate inventory management and increase production costs. |
| High-End Photography Equipment | Top-of-the-line photography gear is not always necessary; good lighting and a decent camera can suffice. |
| Print Advertising | Traditional print ads often have a lower return on investment. Don’t include them in the marketing strategy of your online store. |
| Multiple Packaging Designs | Having various packaging designs increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for design tools or analytics often go unnoticed by customers. |
| Exclusive Materials | Using rare materials can inflate costs and complicate supply chains. |
| Costly Office Furniture | High-end office furniture is not always appreciated by employees and can be a significant expense. |
| Custom Printed Stationery | Personalized stationery is a minor detail that most customers overlook, and it can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Shipping Options | Most customers are content with standard shipping, making expensive shipping options unnecessary. |
| Extra Storage Space | Maintaining more storage space than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Website Redesigns | Constantly updating the website design can be costly and disrupt operations. |
| Expensive Product Displays | Elaborate product displays are often ignored by customers and add to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by employees. |
| Excessive Team Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Marketing Materials | Frequently redesigning marketing materials is costly and often unnecessary. |
| Unused Promotional Items | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Crafting Tools | Specialized crafting tools are often unnecessary and add to costs without a proportional benefit. |
Stop working with a tight budget for your online handcrafted leather goods store!
Managing a budget for a handcrafted leather goods online store when funds are tight can feel like a nightmare. It's like being trapped in a cycle where any unexpected expense can overwhelm you.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your business.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of online stores just like yours. Get them now!
Make your online handcrafted leather goods store more profitable
We have studied the strategies of the best leather goods shops in the world. All their tactics are explained in our pack!
