![How to plan and track the budget of your handmade products brand [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-4_07b82131-8564-43b2-8154-91a7eb95a622.png?v=1715856429&width=1100)
If you don’t plan and track your handmade products business budget properly, you're setting yourself up for failure.
When we developed our strategy pack for handmade product entrepreneurs, we saw a lot of artisans 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 handmade products business's finances around and set you on the path to success!
Get the budget tracker tailored for handmade brands
Most handmade brand founders don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for handmade brands
Here is an example of a (very) detailed budget for a handmade products brand, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for workshop and retail space | $2,500 | $30,000 |
| Electricity | Power consumption for tools and lighting | $300 | $3,600 |
| Water | Water usage for cleaning and production | $100 | $1,200 |
| 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 |
|---|---|---|---|---|
| Artisan | 2 | $3,000 | $6,000 | $72,000 |
| Sales Associate | 1 | $2,500 | $2,500 | $30,000 |
| Marketing Specialist | 1 | $3,000 | $3,000 | $36,000 |
| Manager | 1 | $3,500 | $3,500 | $42,000 |
3. Materials & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Raw Materials | Wood, fabric, metal, etc. | $5,000 | $60,000 |
| Packaging Supplies | Boxes, wrapping, labels | $500 | $6,000 |
| Tools & Equipment | Hand tools, machinery maintenance | $300 | $3,600 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $100 | $1,200 |
| Office Supplies | Stationery, printer ink, etc. | $100 | $1,200 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $500 | $6,000 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| 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 |
| Uniforms | Staff uniforms and aprons | $100 | $1,200 |
| Licenses & Permits | Business licenses, permits, etc. | $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 | $100 | $1,200 |
Some handmade brands make 5x more profit than you!
We have studied the strategies of the best handmade brands in the world. Replicate them now!
What are the biggest expenses for a handmade products brand?
Be mindful of these critical expenses. Here are five major costs every handmade products brand owner needs to consider, along with some tips on how to manage them effectively.
- Material costsThese can take up a significant portion of your budget. You're dealing with raw materials that can vary in price based on availability, quality, and market demand. To keep these costs under control, focus on bulk purchasing, sourcing from reliable suppliers, and minimizing waste. It's easy to overspend by buying too much or opting for premium materials that don’t significantly enhance your products.
- Labor costsYour artisans and craftsmen are the heart of your brand, but paying for their wages, benefits, and training can be costly. This expense is always high because you need skilled workers to maintain the quality of your handmade products. You can optimize labor costs by scheduling efficiently, cross-training your team, and monitoring productivity. However, be cautious not to underpay or overwork your staff, as this can lead to high turnover and reduced product quality.
- Rent and utilities for your workshopPrime locations come with high rent, but they can attract more foot traffic and potential customers. Utilities like electricity, water, and heating are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient equipment and lighting. Overspending often occurs when you choose a location that's too large or too upscale for your needs.
- MarketingYou need to spread the word about your handmade products, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. 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 equipment costsThis includes everything from crafting tools to packaging materials. These are expensive because quality tools and regular maintenance are crucial for producing high-quality handmade products. Optimize by investing in durable, efficient tools and maintaining them regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your handmade products brand?
Here are practical tips to help you, as a handmade products brand owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Source materials from local suppliers to reduce shipping costs and support the community. |
| Labor Costs | Utilize project management software to streamline workflows and ensure efficient use of time. |
| Utilities | Switch to energy-efficient lighting and equipment in your workshop. |
| Marketing | Leverage social media platforms and collaborate with influencers to showcase your handmade products. |
| Packaging | Opt for eco-friendly, cost-effective packaging and encourage customers to reuse or recycle. |
| Equipment Maintenance | Maintain a regular schedule for equipment checks and servicing to avoid costly repairs. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider a shared workspace to reduce costs. |
| Insurance | Review your insurance policies annually to ensure they meet your current needs and compare rates. |
| Shipping | Partner with reliable shipping companies and negotiate bulk shipping rates. |
| Tools and Supplies | Invest in high-quality, durable tools that will last longer and reduce replacement costs. |
| POS System | Choose a POS system that integrates with your inventory and accounting software to streamline operations. |
| Staff Training | Offer regular training sessions and utilize free online resources to keep your team skilled and efficient. |
| Waste Management | Implement a waste tracking system to minimize material waste and recycle whenever possible. |
| Technology | Invest in multi-functional tools and software that can handle various tasks to save on costs. |
| Office Supplies | Buy supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce overproduction. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Product Photography | Invest in a good camera and lighting setup to take high-quality photos in-house. |
| Website Maintenance | Use a user-friendly website builder and keep your site updated to avoid costly redesigns. |
| Customer Service | Train staff to handle customer inquiries efficiently and use chatbots for common questions. |
| Trade Shows | Participate in local trade shows and craft fairs to gain exposure without high travel costs. |
Copy the tactics of the best handmade brands in the world!
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Expenses that are just useless for a handmade products brand
Yes, some expenses for your handmade products brand are just unnecessary. They don't contribute to increasing revenue or enhancing customer satisfaction.
| Handmade Products Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily attract more customers and can be a drain on the budget. |
| Premium Raw Materials | Unless you are targeting a high-end market, most customers are satisfied with good quality, mid-range materials. |
| Excessive Product Variants | A large variety of products increases inventory costs and leads to more waste. |
| High-End Crafting Tools | Top-of-the-line tools are not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your handmade products brand. |
| Multiple Branding Styles | Having various branding styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving product quality. |
| Premium Subscription Services | Expensive subscriptions for design software or magazines often go unnoticed by customers. |
| Exclusive Materials | Using rare materials can inflate costs and complicate supply chains. |
| Costly Display Furniture | High-end display furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Tags | Personalized tags are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Packaging Materials | Most customers are content with simple, eco-friendly packaging, making expensive materials unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Product Updates | Constantly updating product designs can be costly and disrupt production. |
| Expensive Display Centerpieces | Elaborate display centerpieces are often ignored by customers and add to the cost. |
| High-End Crafting Supplies | Luxury crafting supplies are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Branding Designs | Frequently redesigning branding materials is costly and often unnecessary. |
| Unused Promotional Materials | 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 Equipment | Specialized crafting equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your handmade products brand!
Managing a budget for a handmade products brand when funds are tight can feel overwhelming. It's like being trapped in a cycle where any unexpected expense can throw you off balance.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, pinching 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 resources to invest back into 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 handmade product brands just like yours. Get them now!
Make your handmade products brand more profitable
We have studied the strategies of the best handmade brands in the world. All their tactics are explained in our pack!
