I truly believe there is no one right business model for makers. One of my goals in starting Crafting an MBA is to present the many options that are available to anyone who wants to build a business designing and making products. No one solution will work for everyone, but hopefully by sharing guest posts like Emma’s last week, and talking about role models like Heath Ceramics and Alabama Chanin, I’m helping paint a broad picture of the types of business models out there for designers and makers.
When I talk about your business model, what I’m talking about is a combination of the types of products you produce, the ways you produce them, and the markets in which you sell them. You might build a business creating limited edition pieces that you sell in galleries. Or perhaps you have visions of a small production studio with a retail space to match. Or maybe you want to outsource your production to a local manufacturer and sell your work predominately through wholesale. Or maybe your business model involves many of those options because you’re still finding your way.
Not only is there not one correct business model, but for most people, that model is constantly evolving. In the past few years, I have transitioned my business from one which every product is entirely made by me and sold mostly at retail craft shows, to one in which I outsource parts of my production (yet still do many things by hand) and sell primarily through wholesale. One is not better than the other, it’s about finding the model that works best for you.
So how do you figure out your ideal business model? It starts with finding the core. Finding your core is a key component of Made to Stick
In the book, the Heath brothers use the example of Southwest Airlines. Southwest is “THE low-fare airline.” This is their core. Every decisions that needs to be made at Southwest can be made by asking if it makes them “THE low-fare airline.” Southwest has other values that drive their business, and these can be seen as concentric rings moving out from the core of “THE low-fare airline.” But it is that core that allows them to easily make business decisions.
An example of a design business with a strong core is MIO – whose tag-line of “Beautiful, Sustainable, Affordable” helps drive every decision they make. Every product they make needs to adhere to these three standards – which means that choosing a sustainable material with a high price tag is out, as is producing cheap products that are harmful to the environment. “Beautiful, Sustainable, Affordable” is a core message that is applicable to many scenarios, from MIO’s normal product development to the opportunity they had a few years ago to design a line for Target. Having a strong core allowed MIO to enter into a different type of production agreement while still remaining true to who they were.
Finding your core can seem difficult at first, but once you’ve found it, it becomes the road map for all your business decisions. There are many ways to find your core, but one method is to make a list of all the ideas that are central to your business. These might be things like handmade, sustainable, design, local-production, organic, affordable, fair-priced, fair-trade, customer value, etc. Look at each item on the list and ask yourself if there is ever a scenario where you would sacrifice that idea for another. For instance, is sustainable more important than local-production? Is creating customer value more important than handmade? As you work through these possible scenarios, you should begin to see certain ideas that stand out as non-negotiable. These ideas becomes your core. The other ideas may become those concentric circles around your core, but remember you can only have one core.
Once you’ve found your core, all the decisions that help create your business model should fall into place. In the end, remember that there is no one right business model, and no one right core. It’s about finding the things that work best for your values and your vision for your business.
As you work through finding your core and your business model, feel free to share in the comments here or on the book club blog.
Very clear and concise, Megan – thanks! We’ve been kicking around the ideas in the book and discussions on the blog but this post really brings it all together is a concrete way. Read the suggested method for finding the core to our little group and instantly “quality” popped out as the one non-negotiable. Thanks so much for taking the time to put all this together – the book club and your other valuable posts. We’re at a point of reevaluating our business and stumbling upon your blog has been immensely helpful!
Great post Megan!!! I really strongly feel that it is up to the buyer to decide on the definition of our product. Whether it be the wholesale buyer or retail customer, they have the ultimate say to buy or not to buy, based on questions they can ask and the answers we give honestly. It is really up to them to make the distinctions between all the levels and shades of gray involved in handmade products.
In theatre, there’s a saying that each audience member sees a different play. If you ask people what a play was about after a performance, you can get shocked by the variety of answers, and that half of what they said never occurred to you. Each person looks at the world that has been created through the lens of their experience, with all their emotional history, and their knowledge, all their cultural assumptions.
That said, if you don’t have your play crystal-clear and detailed in your mind, making specific choices each moment, the play doesn’t work for anyone. Audience can perceive committed performances, and committed consistent design choices, as anything they want. But when performances are vague, and design has no logic to it at all (not even crazy logic), then there’s nothing there for the audience to work with. No world has been created. The irony is, that by keeping the design and performances fluid and vague and not “fenced in”, there is nothing there for the audience to react to Shows like that almost never work.
So, even if customers will have their own thoughts about what the products mean to them, designers have to have a clear idea of what their products mean to them, too.
Great blog entry Megan and great comment from mythopoeias! I started writing my core principles as I was reading your article. You are right…it is not easy. My core values are: handmade embellishments, customer satisfaction, high quality craftsmanship, unique designs. How do I pare that down to something simpler like “Beautiful, Sustainable, Affordable” as in the case of MIO?
Ooo. I love the challenge of saying an idea beautifully simply.
Uniquely Designed
Brilliantly Made
All For You
Handmade with flair!
Unique craftsmanship and just for you!
It occurs to me that I don’t actually know what you sell….
I really like using “unique”, especially at the front. I feel like that’s a strong point. I also like craftsmanship. It makes me think of guilds, of carpenters making beautiful furniture, of highly experience people doing what they excel at. Other words that remind me of what you are saying: durable, timeless, lovingly made, detailed, flair!, intricate, genius designs, with care, valued…
Good luck!
Hey thanks for the suggestions mythopoeias! I make embellishments for hats, purses, wedding albums and I’ve made an heirloom wedding cake decorated with vintage buttons. My website is http://www.lechapeau.ca and http://www.lechapeau.etsy.com. I will be adding more spring hats soon! Love your input!
Kindly,
Joanne
One more comment for mythopoeias: I went to your blog and I read the top line “Just Another Word Press.com” and I thought to myself “if this is just another word press why should I read it? It will be just like everyone else’s.” So I’m thinking…why not put in the word “Not” in front so people will wonder “what makes this blog different than everyone else’s?” I like the sound of “NOT just another word press.com” It makes me want to find out more about what you have to say. Just a thought.
Wonderful blog! I just stumbled into it somehow and had a quick read and your topic caught my attention immediately! I have a craft shop in outback NSW Australia and an online Ebay shop which I am still struggling to make a go of. I am planning to get my Etsy shop up and running again so need all this sort of advice on branding and styling and internet sales. You have me thinking about defining my “core” principles as my shop aims are extremely broad. I need to “focus” this year!!
This is great. When you pare it all down — what remains as important? I was surprised how short my vision statement was when I made one last year — “to contemplate the beauty of Creation through creating art and bringing that to others through teaching, exhibiting, and selling”
Thanks for the encouragement to take it one step further and pare it down to just 3 or 4 memorable, sellable words.
Megan:
Like you said in your article there is no one”right” business model at the level of production. Have you read about the “ideal business” model for business value? It is found in the free e-book “14 Unalterable Business Value Laws” at http://www.growthconcepts.org Let me know what you think.