How many times have you daydreamed about opening a craft store? No matter how clear your vision is, though, the path from dream to reality can feel overwhelming.
You want to start a craft store business because you love art and crafting, but that love alone is not enough to guarantee a thriving business. If you want to set your new craft store up for success, you need a well-thought-out business plan. The right business plan will help you navigate every step from inventory decisions to marketing and community building.
But how do you get started with a craft store business plan?
This guide covers nine simple steps to creating a craft store business plan that addresses the unique challenges of craft retail.
Before we dive into the steps you should follow when creating your craft store business plan, let’s lay some important groundwork. Craft stores have some unique challenges that make setting a business plan (and running the business) complicated in areas other retailers don’t encounter.
As you work through each step in our retail business plan guide, keep these challenges in mind. Your business plan should address not just what you'll sell, but how you'll create a space where customers want to hang out and build a community with the other crafters in their area.
Pro tip: You might want to keep a notebook handy while you read this post! Jot down ideas, questions, and specific details that apply to your vision. The more thorough you are now, the stronger your business plan and your future craft store will be.
Step one to crafting your business plan is to start with your personal connection to crafting. What sparked your love of crafting? Your store’s mission and vision should capture the energy of what brought you to crafting in the first place.
This foundation will guide every decision you make, from which products to stock to how you train your staff, so make sure you take your time and get this right.
Next, you need to understand your local crafting community. Identifying your target audience and getting to know them will help you stock the right products and create the classes and services people actually want.
Related Read: How To Offer Art and Craft Classes for Adults: 5 Tips & Tools
Laying this solid foundation of understanding your community and their craft supplies needs will help you set up the rest of your business plan (and launch your store).
Take your mission, vision, and understanding of the local craft community and start to identify what type of store you want to run. At this stage, you have two broad options: Do you want to be a general craft supplies store or specialize in a niche? Both options can work for your store, but they require different approaches.
Some niches you might consider:
The benefits of focusing versus being a generalist come down to expertise and economics. Specializing lets you become the go-to expert for specific crafts. You’ll often get higher margins and build more loyalty with your core customers, but you’ll have lower foot traffic. Going broad attracts a bigger audience, but requires a proportionally larger inventory investment and more complex inventory management processes.
Related Read: ANSWERED: How Much Does a Craft Store Owner Make?
Which route should you choose? Your personal crafting background matters here.
If you're passionate about pottery, you'll naturally provide better customer service and product curation than someone who's learning as they go… but if you’re opening in a community filled with quilters and no competing quilt shops, you might want to offer sewing supplies and fabric, too. The key is matching your strengths with what your community actually needs and will support.
Once you’ve chosen your specialty or decided to be a general craft supply store, you’ll need to build your product mix.
Some core considerations during this stage of your business plan:
Your product and service mix will depend on your store, audience, and customer base, but most craft store owners find that offering at least some classes or services benefits their store.
Next, you’ll want to lay out your plan for a marketing and sales strategy. The key here is to capitalize on the community driven, personal nature of the craft industry.
Building brand identity and positioning starts with understanding how you want customers to feel in your store. Think about the colors, fonts, and messaging that reflect your store's personality. Once you pick your identity, make sure that everything from signage to social posts reflects it.
Marketing channels for craft stores center around visual platforms and local connections. Social media platforms like Instagram and Pinterest are natural fits for the craft industry.
You’ll also want to explore partnerships with local businesses, schools, and community centers. Don't overlook craft fairs and pop-up events where you can meet potential customers face-to-face.
Remember to blend classic approaches, like in-person events, with more modern plays, like social media and email newsletters, to get the most out of your marketing strategy.
Your store’s physical layout is crucial to your success. During your business plan process, you’ll want to think through how you’d set up your in-store flow to maximize your chances of success.
Craft customers tend to spend a significant time browsing. They also need space and proper lighting to examine products carefully. Wide aisles accommodate shopping carts and wheelchairs while preventing customers from feeling cramped.
Related Read: How To Improve Visual Merchandising: 6 Retail Guidelines
The right lighting helps with color selection, especially important for fabric, yarn, and paint customers. If you’re running a general craft store, you’ll want to create distinct zones for different craft categories so shoppers can get in and out with what they need without feeling overwhelmed.
If you're offering classes, consider how the space will work for different activities. Pottery needs a different setup from scrapbooking, and cleanup requirements vary significantly. Plan space (and budget) for sturdy, easy-to-clean tables and prepare to invest in adequate storage for supplies.
The next stage of your business plan is laying out the startup costs and funding needs. Lenders and investors will need to see this portion of your business plan before they’ll be willing to work with you, so be sure to spend some time getting this portion of your business plan right.
How much should you budget for startup costs?
You’ll need working capital for the first 6-12 months on hand to cover your operating expenses while you’re ramping up. A new retail business takes time to build steady cash flow, so plan conservatively and keep a nest egg in case of a seasonal slump.
Funding options include personal savings, small business loans, investors, and crowdfunding. Take a look at all your options, research local small business development resources, and consider multiple lenders before you commit to one.
Realistic financial projections are key for making the right decisions about growing your business and stocking your store. They’re also key for helping you demonstrate how viable your store is to potential investors.
Some projections to include in your craft store business plan:
Lay out your projections clearly and concisely, and be as conservative as possible in your estimates to prevent investors from having unrealistic expectations for early days in your store.
Another key part of the process is getting your legal foundation started out on the right foot. First, you’ll need to choose your business entity type. Some common types for small, independent craft stores:
Licensing and permit requirements vary by location but typically include basic business licenses and retail permits for most craft stores. You’ll also likely need to complete a sales tax registration to begin selling retail products.
Depending on your location, some activities, like offering classes or selling food items, may require additional permits or certifications. Check with your local small business development center or city clerk's office to understand specific requirements in your area.
Next, consider your insurance needs. What type of insurance does a craft store need? Your specific coverage will depend on your store, but most retailers need:
Working with a local business attorney and accountant early in the process often saves money and headaches compared to fixing problems after opening.
Following these nine steps should help get you started on the right foot with your craft store business plan. But remember, creating your business plan isn’t a one-and-done task. Your business plan should be a living document that changes as your business grows.n
Set aside time every quarter to review and update your plan. Track the metrics that matter most to your business, not just sales figures, but customer retention rates, class attendance, and community engagement.
Once you've mapped out your craft store business plan, you'll need the right tools to bring it to life. Rain POS understands the unique needs of craft stores because we're built by retailers, for retailers.
Ready to see how the right POS system can support your craft store? Schedule a demo today.