Are you are thinking about starting a jewellery making business but do not know where to begin? You may have the talent to create beautiful pieces, but running a business involves a whole new set of skills.
The pandemic has accelerated the trend towards self-employment. So, if you have decided you want to be your own boss, you have joined a growing number of entrepreneurs. With so much advice available and new opportunities to sell online, perhaps there has never been a better time to start a business.
Carrying out some research on the basics of running a business will help you to feel more confident before you take the plunge.
Who is your target customer?
A key consideration before launching your jewellery making business is where and how you will sell your products.
Before making those decisions, take a step back.
Who will buy your jewellery? It sounds obvious, but many people do not take the time to think about their potential customers. This will come down to a number of factors, including the price and style of your pieces. Who does your jewellery appeal to? Think about gender, age, lifestyle and personal taste and preferences. And, importantly, who will pay the prices you want to charge for your creations?
Where will you sell your pieces?
Once you know who is likely to buy your jewellery, you can make better decisions on where and how to sell and promote it. You will probably want to sell your jewellery online, but will this be via your own website or through third parties, such as Folksy, Etsy and Not on the High Street?
Selling online has never been easier but successfully setting up and maintaining an e-commerce website involves time and cost. While free website design templates are available, you may want to consider paying a professional website developer. If you want to target the luxury end of the market, ensure the quality of your products are reflected by a slick and beautiful website.
While the online jewellery market is growing, it might be worth considering other ways to sell your pieces. You could start by contacting retailers in your area. Choose shops which attract your potential customers and fit well with your brand. Would your jewellery sit better in a high end boutique clothes outlet or a quirky gift shop? Before you approach retailers, ensure you are well prepared and confident in presenting your collection to them.
How should you price your products?
Pricing your products can be challenging. Many people make the mistake of undercharging when they start a jewellery making business. While it is important to ensure your pricing is competitive, you do not want to sell yourself short.
It can be helpful to see what competitors are charging for similar items, but this will not tell you how much your unique pieces are worth. You will need to ensure your prices cover your costs and pay you a decent hourly rate for your work.
Think about the costs associated with every aspect of running your business and build these into your prices. Your overheads might include: rent on your business premises, electricity, marketing costs and packaging. You will also need to factor in the cost of equipment and materials. Finally, decide on your hourly rate and work out how long it takes you to create each piece.
Many jewellery pricing models are based on 2.5 times the material and packaging costs, plus an hourly wage and an additional 10 percent for overhead and other costs. Whatever approach you take, ensure you are thorough when working out how much it costs you to run your business and create each item.
How will you promote your jewellery?
Marketing can make or break any business. When you are starting a jewellery making business, you will need to work hard to establish your brand. From social media to advertising and PR, there is a lot to think about. If your budget is tight you will need to be selective and focus your efforts on those activities that are likely to give you the best return on your investment.
Being clear on your potential customers is key. Consider which social media platforms they use and where else they might hear about your brand. Ensure everything you use to promote your pieces, including photography, written copy and video, is a good fit with your target customers.
Promoting your products will continue to be a time consuming task and you will need to change your strategy as things change. As your business grows, you might consider employing someone in-house or on a freelance basis to handle your PR and marketing.
Are you complying with the law?
However and wherever you sell your jewellery items, you will need a licence from your local authority. Each council has its individual requirements but should advise you on the licenses you need.
There are also a number of laws you will need to comply with to sell your products. These include legislation in the Consumer Rights Act 2015 and, if you are selling through your website, online and distance-selling regulations. In addition, you will need to make sure your brand, including your business name, does not breach any intellectual property laws.
There are also laws that are specific to the jewellery making sector. EU legislation, which still applies in the UK, prevents the use of certain hazardous materials, such as nickel, cadmium and lead. If your jewellery includes gold, silver or other precious metals, you will need to familiarise yourself with hallmarking requirements.
To ensure everything is in place before you launch your jewellery making business, you may need to get professional advice. This could be from a lawyer, or you may be eligible for some free business support. Check out which business start up schemes are available for entrepreneurs in your area.
How will you manage your finances?
One of your first tasks as a business owner is to register your business with HMRC. You will need to get up to speed with all the financial requirements entrepreneurs need to meet: from filing tax returns to paying National Insurance contributions and income tax on your profits. And, of course, you will need to work out how to fund your business. If you work with fine materials, such as precious gems, this could involve taking out a significant business loan. As you grow and start taking on employees, you will face additional financial obligations.
Appointing an accountant who is familiar with sole traders or small businesses would be a wise move. While you will need to pay their fees, their advice should save you money – as well as considerable time and stress – in the longer term.
What insurance do you need to protect your jewellery making business?
Commercial insurance provides essential protection for any business. If you are starting a jewellery making business, you may be working with high value materials. This could make you particularly vulnerable to theft, loss or damage. Having the right insurance from day one will help you to build a sustainable business.
If you are selling through a third party – online, on the high street or even at a craft fair – retailers will likely need evidence of your insurance policy.
Sadly, cybercrime is on the rise and any business – however small – is at risk. Insurance can protect you against this growing threat.
Because of the specific risks associated with producing and selling high value items, specialist commercial jewellers insurance will provide you with the best protection.
TH March has been arranging insurance for jewellers since 1887. Protecting those businesses – large and small – that create and sell precious items is at the heart of what we do. Our insurance for jewellery designer makers will cover all your needs as you start and grow your jewellery business.
This article is intended for informational purposes only and is not intended to be exhaustive, nor should any discussion or opinions be construed as professional advice.