Archive for the ‘Bootstrapping’ Category
Tuesdays are for RAP (Random Acts of Patterns)! http://www.ravelry.com/discuss/friends-of-knitpurlgurl/2319615/1-25#24 Please join in!! #knitting #crochet
Although I didn’t quite catch the marketing implications of random patterns until after I had gifted nearly 20 copies of my designs, Random Acts of Patterns is just brilliant on so many levels. Here’s why…
The premiss is along the same lines of Random acts of Kindness, but in this case the idea is to find a neat pattern and buy it for another Ravelry.com user using the “send as gift” function that’s part of the check-out process.
There are 2 functions of this process that are very intriguing to me. First, it’s a way to help generate income for independent designers. The second is that it’s a great way to advertise your own designs by sending them out to random knitters.
From a strictly business standpoint, when I buy ad placements, I take a chance that I won’t have enough sales to break even. For example, I purchased Ravelry ads a few months in a row. The fist run I did better than break even on the cost of the ads by also making enough money to cover the cost of the materials used in the pattern. In the second run, I didn’t do quite as well, but broke even on the ads. The 3rd and 4th times were a bust putting me in a position where I needed more pattern sales to break even on all of the expenses.
There are many reasons why the same ads didn’t do well over time. Summer months aren’t always considered as Knitting months. People may have been tired of seeing the ads. Or any number of things. While it is possible to hone in on the winning combination the idea of Random Acts of Patterns presents a whole new twist on marketing.
The main consideration with #RAPatterns, for the indie designer, is that patterns, once created, don’t represent revenue until someone buys them. The next consideration is although you might be running at a loss with materials and time put into the design, giving away promo, electronic copies, doesn’t create additional expenses. I always say that word of mouth has to start somewhere and this is a great way to kick it off.
The bonus of Tuesday’s being for #RAPatterns are the limits designed into the practice. Coupons, door busters, annual sales and all the rest are just ways companies train customers not to pay full price, for anything. But a random pattern given only on Tuesday is more along the lines of winning a prize. There is no expectation that waiting will result in a discount so people buy when they’re ready to.
By participating in Random Acts of Patterns on Tuesdays you have a great way to get some patterns out in the wild where they might generate some buzz for your work all while keeping people guessing about your next move. It also doesn’t hurt to be seen as generous either.
The next question is how this process can be adapted for other business models. Are there businesses this wouldn’t work with? Why not? I’d love to hear your thoughts, so please leave a comment, below.
PS, don’t forget to thank Kerrie for this amazing idea. Click either knitter to visit her site.
When I was little, I use to tag along with my mom as she would pick up things for her garden. My favorite stop was Agway, because, in the spring they had brooders full of baby chickens. Although my mother never, ever, indulged my childhood need to snuggle an arm full of chicks, now that I’m the Mom it’s a different story.
In the spring of 2009, we took the plunge and purchased 8 chicks from a local farmer. Like any other venture, we needed more than a box of peeps, but, while the birds were only slightly larger than the egg they hatched out of, they didn’t need many of the things a fully grown hen would.
So, instead of rushing out and buying loads of stuff that would just sit in storage until the gals were big enough to use it, we adapted to their needs and only invested more into their care when it was the right time to do it. While they were small and still needed the heat lamp to regulate their body temperature, they lived in a large cardboard box in the family room. When they got large enough to jump/fly out of their box and poop on the carpet, we built a coop and moved them to the back yard.
This spread the expenditures of time and money out, over time, so that we could better absorb the costs.
We also learned as we went along. I got a great book, Storey’s Guide to Raising Chickens, and picked up a few tips and tricks from the internet and even learned a few things the hard way, but now we have all the eggs we can eat and a self-sustaining supply of new laying hens. When we had hens go broody after their first year, we were given some fertile eggs for the ladies to hatch. From those fertile eggs, we kept a Rooster. This year we just welcomed our first batch of home-grown babies.
I could keep the process going, if I wanted, and allow my hobby of back yard chickens grow to the point I could start selling eggs to my neighbors. Then grow to enough hens I could get a stall at the farmers market. I could then let the dream grow to certifying as organic and winning a contract with Whole Foods… Or not.
The formal term for this process is bootstrapping, but the process works equally well in small business as it does with back yard chickens. When considering how you want your next business to unfold, consider the slow build as a way to gain both resources and knowledge you need to ensure a successful venture.
Not all entrepreneurial ventures need to be grandiose, million dollar money makers. In fact, many of the successful entrepreneurs I’ve worked with over the years are moonlighting in small businesses to help fill gaps in their family budgets. A part-time business might be just the thing you need to bring in a few extra dollars for your family too.
Starting a business for your spare time also has some major advantages. For one, you don’t have to quit your day job so your regular paycheck and other benefits aren’t going anywhere.
Second, starting a small business in your spare time allows you to bootstrap the business. If your goal is to earn extra money, starting with a small amount of seed money, allows the business to grow at a pace that is equivalent to the money you earn so you invest in the business instead of making loan payments. Plus any money you don’t pay the bank for interest on a line of credit is money you get to keep.
When thinking about what kind of business you might be able to bootstrap in your spare time, I would suggest you start by evaluating your current hobbies. My guess is that you probably already have a basic kit of tools and know a little about the industry which will make the jump from hobby to business easier. For example;
- Festivals – If you love going to festivals in the summer time, consider becoming a vendor. Since you know what events are planned and what is usually offered, you could find a niche novelty food or product and set up a table. (Like the Kettle Corn tent in this articles masthead)
- Second-hand items – If you simply can’t pass a good pile of junk without picking up a few treasures, consider re-selling. Options include selling vintage items on Etsy, eBay and other sites online or getting space at your local flea market.
- Teach a class – Maybe you’re a world class knitter or have another special talent you can share with the world. Sites like Betterfly and the lessons section on Craig’s List can help you find customers.
- Hunting and Fishing – Since you already know all the best spots in the area, why not let someone tag along?
- Repair services – take all those pleas for help you get from your family and friends and set up shop repairing computers, small engines or anything else you know you can fix.
Of course the list is only limited by your imagination.
One pitfall of turning a hobby into a business is to change your mindset about what you’re trying to do. One common mistake most part-time business owners make is treating the business like it’s still a hobby.
Learning business basics isn’t limited to those who want to quit their job and start a new career. If you want to keep what you earn, and grow the business you’ll still need a plan, know how to keep your books and keep your fledgling business from faltering along the way. You might also have to get insurance, permits and collect sales taxes.
The good news is that most of this can be learned in the Hard Knocks Business Academy. I’m also here to help you along, so don’t hesitate to contact me or schedule an appointment (the first appointment is always free)