One of my many goals of 2010 is to start treating my Etsy shop like a true business. I thought it would be fun to start a series of posts about how I am doing this. I’ve read much on and off Etsy about how to increase sales and how to move from hobby to business, but I haven’t done anything with it, until now!
I will post as regularly as I can about the different techniques I’m trying and whether or not they are successful. I hope you find it interesting and helpful!
Part 1 - Tracking Expenses:
Last July I started my shop not having any idea what I was doing. I liked making jewelry and I thought it would be nice to earn a little extra money doing it. There was one problem with this. I would go about my day, having fun creating, promoting and adding items to my shop without taking into consideration how much money I was spending. I never saved receipts or calculated how much I spent on supplies. One day I finally bit the bullet and recorded everything. I looked through a year’s worth of old bank and credit card statements and created a simple list in Excel.
This was the big shock that I needed to start learning how to turn my “hobby” around. Between July 2009 and December 2009 on average I spent $6.80 on supplies for every $1.00 I made. In October I spent $29.00 for every $1.00 I earned! That was a bad month, needless to say! Here is what my pathetic graph looks like:
I have now started to diligently track my spending. I am also trying to use a lot of the supplies that I have on hand instead of buying new every time I have an idea. This will obviously reduce my monthly expenses and I can then look at my previous spending as investments rather than losses.
It was definitely worth taking the time to go through my old statements to figure out exactly how much I was spending on my hobby. It was a great eye opener for me and I recommend doing it to anyone who, like me, wants to begin earning money doing what they love!