Guide to starting a craft business in the UK

Handmade crafts in the UK are Britain’s “fastest growing creative industry”. Starting a craft business is a great way of joining an exciting industry.

Selling crafts online gives you the opportunity to get your unique products in front of customers quickly and easily. But you don’t have to just sell online – you can also take your products on the road with a craft stall, and approach retailers about selling your crafts too.

So, if you have a passion for getting creative with your hands, setting up a craft business can be a great way to make your hobby pay – whether as a side project or a potential full-time business.

Want to know about starting your own craft business?

You might be starting your own craft business because you’ve got an existing hobby or skill, you’d like to make money from. And while the creative side is important, running your business will involve a wide range of different tasks, like:

How much does it cost to start a craft business?

Starting a craft business doesn’t need to be expensive, especially if you’re making a small number of products to begin with. However, there are some start-up costs involved.

First is the cost of your materials. Finding the right suppliers and negotiating the right prices are crucial for a small business. You might also need to pay fees to run a craft stall – but you should be hoping to recoup these through sales.

You may want to set aside some cash for marketing, but remember that some of it can be done without spending much at all.

Starting a craft business – step by step guide.

Are you ready to get going? Read on for our step-by-step guide to starting a craft business in the UK.

1. Find your niche

If you’re starting a craft business, it’s likely you already have a hobby – it could be anything from needlework to pottery or dressmaking.

Craft and ‘artisanal’ goods are popular in the UK and abroad, but competition in the market is high. Think about how you can make sure your products stand out. What is it that you can bring to the craft market that’s truly unique? Do you have a special skill, unique style, or materials that nobody else is using? Try to work out your niche before you begin.

Craft business ideas

If you still need some inspiration, here are a few products you can try making before settling on your niche:

  • Upcycling – this one’s brilliant for sustainability. If you’re reluctant to throw something away, can you turn it into something else? It’s one way of creating really unique products – think cushions made of old shirts, or making a table from drawers. You can also collect old stuff that people are throwing away in your area
  • Soap making – soaps can come in many different fragrances, shapes and colours, so this is a fun one to experiment with. You can package them up nicely and send them to your customers
  • Gift baskets – what occasions can you think of where people buy and receive gift baskets? University graduations, birthdays, new-borns – a personalised gift basket can make a great present

If you want more ideas, social media is the place to look. Lots of creative types share craft ideas on Pinterest and Instagram – and these are great places for you to promote your business, too.

2. Craft a business plan

Your business plan is one of the most important documents when starting your craft business. It’ll act as a guide when starting out, but you should also go back to it regularly to see whether you’re hitting your goals.

Your business plan should be as unique as your craft business, clearly laying out your niche, audience and how you’re going to sell your products.

But most business plans do generally follow the same format and there are tried and tested ways of structuring it.

3. Work out what legal structure to choose

When starting any business, you should get the legal side sorted straight away. One of the first questions to answer is around legal structure. Many craft businesses in the UK are run by sole traders, but other craft entrepreneurs choose to set up limited companies.

Both have advantages and disadvantages, and you should think about speaking to an accountant or company registrar before making a decision.

As a new business owner, you’ll also need to deal with HMRC. It’s important that you register as self-employed so you can pay your taxes.

Then you’ll need to keep up with tax deadlines for your business, filing your tax return and paying your bill on time (including Corporation Tax if you establish a limited company).

Think about insurance for your craft business

Craft business owners should consider a range of different covers.

  • Public liability insurance protects you if a member of the public gets injured or loses money and blames your business. This is particularly important if you’re setting up a craft stall
  • Product liability insurance covers you if a product of yours causes injury or a financial loss. Keep in mind that you may still be liable for compensation claims if you’re selling products that you haven’t made yourself
  • Stock insurance could be important, helping you protect any stock you’re storing – which may well be your biggest asset

4. Find your suppliers

Crafters rely on great suppliers. The quality of your materials could be one of your major selling points, plus you need to make sure you’re getting the right supplies at the right price.

Remember that when you’re starting out, you’re likely to need your suppliers more than they need you. Similarly, many suppliers will be unwilling to offer credit to brand new businesses, so you should be prepared to front the cash for your first orders.

However, as your business grows, check with your suppliers regularly to make sure you’re getting the best deal. You might be able to reduce your costs just by asking.

5. Think about where you’ll sell

Your craft items might be beautiful, but marketing and selling your products creatively is perhaps the most important part of running your business.

There are a few different channels that craft makers can explore.

Selling crafts online

There are lots of online opportunities for craft businesses. You can set up a selling account on our marketplace to help get you started.

Approach retailers

Bricks-and-mortar retailers are another potential sales route. Try starting local. Approach shops in your area and ask if they’d be interested in stocking your products. Make sure you’re fully prepared before making an approach, as sensible retailers will want to make absolutely sure that your items are of the best possible quality and, most importantly, that they’ll be popular with their customers.

Set up a craft stall

Craft stalls are becoming a fixture of many high streets and craft fairs are popular in the UK. A stall can be a great way to establish your business and introduce yourself to the local community. Have a look online and find the craft fairs within a reasonable distance. Each one will have different application processes, so contact them individually to find out how to set up a craft stall at each event.

6. Keep one eye on the future

Many people start craft businesses as a side project, or as a way of making their hobby pay. However, there’s great potential for expansion, particularly as interest in craft products and their creators continues to grow.

Lastly, if you’re pleased with how your business is progressing, think about growth opportunities. Revisit your business plan to see what goals you set for yourself, as well as further opportunities you originally identified.


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