![How to plan and track the budget of your online handcrafted goods store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-8_94454a2a-6fc1-4496-8dc2-9189508bc4f7.png?v=1715856390&width=1100)
If you don’t plan and track your online shop's budget properly, you're setting yourself up for failure.
When we developed our strategy pack for online handcrafted goods shops, we saw a lot of shop 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 shop's finances around and set you on the path to success!
Get the budget tracker tailored for handcrafted shops
Most handcrafted shop owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for handcrafted shops
Here is an example of a (very) detailed budget for an online handcrafted goods shop, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Warehouse Rent | Lease for storage and packing space | $2,000 | $24,000 |
| Electricity | Power consumption for lighting and equipment | $300 | $3,600 |
| Water | Water usage for cleaning and maintenance | $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 |
|---|---|---|---|---|
| Craftsman | 2 | $3,000 | $6,000 | $72,000 |
| Customer Service | 1 | $2,500 | $2,500 | $30,000 |
| Warehouse Staff | 2 | $2,000 | $4,000 | $48,000 |
| Marketing Specialist | 1 | $3,500 | $3,500 | $42,000 |
| Manager | 1 | $4,000 | $4,000 | $48,000 |
3. Materials & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Raw Materials | Wood, fabric, metal, etc. | $5,000 | $60,000 |
| Packaging Supplies | Boxes, tape, labels, etc. | $500 | $6,000 |
| Tools & Equipment | Hand tools, machinery maintenance | $300 | $3,600 |
| 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. | $400 | $4,800 |
| Social Media Management | Managing social media accounts | $600 | $7,200 |
| Influencer Collaborations | Partnerships with influencers | $300 | $3,600 |
| Website Maintenance | Hosting, domain, updates | $150 | $1,800 |
| Email Marketing | Email campaigns and newsletters | $200 | $2,400 |
| Promotional Events | Special events and promotions | $250 | $3,000 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of tools and machinery | $200 | $2,400 |
| Licenses & Permits | Business licenses, permits, etc. | $100 | $1,200 |
| Contingency Fund | Emergency repairs and unexpected costs | $300 | $3,600 |
| Staff Training | Training programs and materials | $150 | $1,800 |
Some handcrafted shops make 5x more profit than you!
We have studied the strategies of the best handcrafted shops in the world. Replicate them now!
What are the biggest expenses for an online handcrafted goods shop?
Be mindful of these critical expenses. Here are five major costs every online handcrafted goods shop owner needs to consider, along with some tips on how to manage them effectively.
- Material and supply 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 supplier. To keep these costs under control, focus on bulk purchasing, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by buying too much or opting for premium materials that don’t add enough value to your products.
- Labor costsYour artisans and staff are the heart of your business, but paying for their wages, benefits, and training can be costly. This expense is always high because you need skilled workers to create quality handcrafted goods. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and reduced product quality.
- Website and hosting feesYour online presence is crucial, but maintaining a professional website and paying for hosting services can add up. To optimize these costs, choose a reliable but cost-effective hosting service and invest in a user-friendly, scalable website platform. Overspending often happens when you opt for overly complex or high-end website features that you don’t really need.
- MarketingYou need to attract customers to your online shop, 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 occur if you invest in flashy campaigns without a clear return on investment.
- Packaging and shipping costsThis includes everything from packaging materials to shipping fees. These are essential because quality packaging and reliable shipping are crucial for customer satisfaction. Optimize by investing in durable yet cost-effective packaging and negotiating better rates with shipping carriers. You can overspend by choosing overly elaborate packaging or premium shipping options that don’t significantly enhance the customer experience.
How to spend less with your online handcrafted goods store?
Here are practical tips to help you, as an online handcrafted goods shop owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Material Costs | Source materials from local suppliers or buy in bulk to get discounts. |
| Labor Costs | Utilize freelance platforms to find skilled artisans for specific projects, reducing the need for full-time staff. |
| Utilities | Switch to energy-efficient lighting and equipment in your workshop to lower utility bills. |
| Marketing | Run social media contests for your shop and collaborate with influencers to gain free exposure. |
| Shipping Supplies | Train staff on efficient use of packaging materials to reduce waste and costs. |
| Equipment Maintenance | Keep a maintenance log for regular checks and servicing of crafting tools and machinery. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a more affordable workspace. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers who opt for minimal packaging. |
| Website Hosting | Choose a reliable hosting service that offers essential features at a competitive price. |
| Staff Training | Conduct regular in-house training sessions and utilize free online resources to enhance skills. |
| Waste Management | Implement a waste tracking system to minimize material waste and recycle whenever possible. |
| Technology | Invest in multi-functional crafting tools and utilize e-commerce management software for inventory and orders. |
| Office Supplies | Purchase 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. |
| Advertising | Utilize social media ads and email marketing to reach a broader audience at a lower cost. |
| Product Photography | Invest in a good camera and lighting setup to take high-quality photos in-house. |
| Customer Service | Use chatbots and automated email responses to handle common inquiries efficiently. |
| Software Subscriptions | Regularly review software subscriptions to ensure they are still necessary and cost-effective. |
| Trade Shows | Participate in virtual trade shows to save on travel and accommodation costs. |
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Expenses that are just useless for an online handcrafted goods shop
Yes, some expenses for your online handcrafted goods shop are just unnecessary. They don't contribute to increasing sales or enhancing the customer experience.
| Shop Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily impress customers and can significantly cut into your profit margins. |
| Premium Website Themes | Unless you are targeting a high-end market, most customers are satisfied with clean, functional designs. |
| Excessive Product Range | Offering too many products can complicate inventory management and lead to unsold stock. |
| High-End Photography Equipment | Top-of-the-line cameras and lighting are not always necessary; good quality photos can be taken with mid-range equipment. |
| Printed Catalogs | Traditional printed catalogs often have a lower return on investment. Don’t include them in the marketing strategy of your shop. |
| 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 service quality. |
| Premium Subscription Services | Expensive subscriptions for analytics or design tools 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 customers 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 your website 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 customers. |
| Excessive Staff 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 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 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 goods store!
Managing a budget for an online handcrafted goods shop when funds are tight can feel like a nightmare. It's like being in a jail where any unexpected expense can drown 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 spend.
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 shops just like yours. Get them now!
Make your online handcrafted goods store more profitable
We have studied the strategies of the best handcrafted shops in the world. All their tactics are explained in our pack!
