Making and selling crafts, is a great home business. It can be a great second income for at home moms, or retirees, but you have to be willing to change with the times, just like any other business in order to keep viable. Gone are the days of money being spent on frivolous crafts. People are watching their money closer now. Plus styles and fashions change, and what was in last year, is now passe this year! So, try and keep up with trends, plus watch your bottom line closer.

Many crafters do not keep books, or record their sales and expenses, but you need to do this exercise in order to see where you can save money, in order to make money. I have a friend that gets such a kick out of her special jackets she makes, she loves seeing the looks on her customers faces, and sells many of these jackets to her friends. But she never really sits down and really takes a look at her bottom line. For her these crafts are a self esteem booster, and by looking a the reality of the craft business, and whether it is making money or not is a downer.

So, in this case it is a hobby. She argues that it brings in money, so therefore it is a craft business, but she never seems to have any! So, finally I sat down with her, and we worked out how much she spends on materials and how much time it takes etc. It turns out each jacket was costing her, and that was allowing a tiny amount of money per hour for the labor. That surprised her, but then realized, that is why she never seemed to have money, because her customers would pay her, it ended up in the family budget somewhere, but then the credit card bill would come in with her craft supplies on it.

The first rule to making and selling crafts for a business, is to make it a business. Keep the money for the business separate from other finances. If you can get a business name and its own bank account that would be even better. If you run it like a business, you will be treated like a business.

The problem is, with home based businesses, they tend not to be taken seriously. She has a great product. These jackets she creates are stunning. So, I said, you should charge more. She was giving away to many deals, she wanted people to have them, which is great, but you are not doing this for the good of your health, this is business.

We then looked at other places she could buy supplies. If you don't want to raise the price of your products, then you can try and get your craft supplies cheaper. She did both, and was pleasantly surprised, when at her next craft show, that people were willing to pay the extra price for a well put together product. She also found a place that would sell her fabrics in bulk, for a better price.

She set up a business name. She did this online. She also went into the bank and set up an account for her business. She got business cards, and by having a proper business she was able to get out of paying taxes for her supplies. This all ads up to savings and profits.

She also worked on a way, to make the jackets quicker without sacrificing quality. She is really excited now with the way her business has turned out. She knew subconsciously that the business was not making money, but she didn't want to have to admit it, and have to give it up.

Making and selling crafts, can be a great business, if you can create a great quality product. Word of mouth is your best advertising, and a few craft shows should put you on the map. You can have a signup sheet for the craft newsletter you will put out, and when and where your next shows are. You can also have a form for special order items.

By getting herself organized, and taking a day out of her sewing to work on a system of order forms (rather than sticky notes all over the fridge) and a newsletter (her hubby was able to set that up for her) and then a free blog about her craft business and sign up for adsense to make some more money there. She was able to concentrate on her sewing and make her stunning jackets.

Just like with any business, making and selling crafts is no different. You need to take the time in the beginning to set up how you are going to run your business. Are you going to take special orders? Are you going to have a newsletter? Where will you get your craft supplies?

Once you do this, and find a niche of crafts that works for you, then you can see just how profitable or not it is, if it is not, then you can change to something else before you keep losing money.

In this economy, you can still make and sell crafts for money, you just need to create ones that are useful rather than ornamental. Try doing some recycled crafts, such as with denim. Offer to finish quilts, finish others projects. Create more useful items, especially for the garden. There is still a good market for crafts. If you can make and sell crafts that are smaller, you can sell online. Bigger ones are not as cost effective because of postage costs.

If you love to paint canvases, maybe try painting on a breadbox or something that is likely to be used. People are watching their spending dollars, and if you can create something unique and yet useful, it is more likely to sell. From doing craft shows, I have started to see this shift from "cute and that would look nice on the wall" to "hey I can use that for the bread, or I can wear that, or that is a great tote bag..." Go for useful art, and your business will prosper.