Today I'm going to share the top 3 reasons why handmade businesses fail so you can avoid this happening to your own business.
Hi, my name is Mei Pak, and I help makers, artists and designers make a living from selling their handmade products online.
What Makes a Business Fail
This topic is always at the forefront of my mind because I want to see everyone succeed with their business.
But not everyone who wants to start a business succeeds and there are some common patterns that I've seen between those people who haven't made it.
I need to preface this post by saying that everything here will be related to your mindset.
Most people reading this post are going to think this doesn't apply to them, but what most people don't realize is that they have mindset problems.
The reality is, we all have mindset problems.
I have it, you have it, even people who are already making millions of dollars have it.
The difference is, most people aren't aware they have a problem and so they don't think it's something that has to be managed or dealt with.
We all have limiting beliefs, unrealistic expectations, or a lack of knowledge.
Most of us were not raised to have the kind of mindset that’s optimal for business.
For example, how many of us were raised to think that if you work hard you’ll get rewarded?
Unfortunately, in the world of business, that’s simply not the case.
I’m not saying don’t work hard, you definitely should do that, but people are often disappointed that they don’t see results from hard work alone.
Your mindset is going to be the biggest component of what will make or break your business.
I know this isn’t exactly a sexy topic like Instagram marketing might be, but it’s worth paying attention to nonetheless.
If you asked me a few years ago, I would’ve turned my nose up at all this mindset stuff because it seemed so “woo woo”.
Take it from someone who didn’t believe it and now has learned from having experienced it all first hand.
This is what will singularly make or break your business!
1. Time to Educate
The first problem I see most frequently, is not wanting to take the time to learn how all this business stuff works.
Business, just like any other subject in life, is something you need to study to know how to do it.
You don't learn how to cook without reading a book, watching some videos, or having someone teach it to you.
You don't learn a new language without being immersed in it, or without a dictionary or a course.
We have to learn everything new in life. Things like how to:
- play the piano
- raise a family
The same is true for business.
You can try to wing it and just figure it out yourself, but that’s not very effective.
Just imagine learning without any guidance at all. No books, no teachers, no one showing you how to use a sewing machine, no videos, nothing.
You might figure it out eventually, but it's going to take a long time and you’ll make a lot of mistakes at first.
This is exactly the same for business.
With any new skill you want to learn, the method in which you learn how to do it will dictate the speed of being able to do that new skill.
For example, if you bought a book on how to play the guitar, versus getting one-on-one instructional help from a guitar teacher, how quickly do you think you will be able to play a song with either method of learning?
You will obviously learn a lot faster with a real person giving you feedback that's personalized to you.
Reading a book on how to start a business is infinitely better than not having any book at all, but you're going to get where you want to go faster and with a lot less trial and error, if you hire a coach.
If you don't have the resources to work with a coach, then no problem! Stick with reading books and watching YouTube videos.
It's better than nothing!
Just realize that it's not going to get you there as fast as working with someone one-on-one.
The second problem is, people go into starting a handmade business with unrealistic expectations.
This is, in part, a problem because of all the media that we’re consuming.
There's so many videos, blog posts, and Instagram posts of people talking about how they made millions of dollars in a month.
It makes you feel like it's a lot easier to do than it really is.
This is the problem with any media. The anomalies and fringe cases are what gets your attention!
Then we never see there are actually hundreds of thousands of other businesses out there that aren't getting those kinds of results.
When you don't have the bigger picture, it's very easy to think that if one person can do this successfully, then everyone can have that same easy success.
The truth is, when you know that only one person out of a hundred thousand was able to make $1,000,000 in a month, and you know the likelihood of doing that is actually really low, then you're not telling yourself that this is the result you should be getting as well.
Whenever I share my successes, wins or income reports, I always try to give context as to why or how it happened.
I'm not deluding you into thinking that this was easy or fast to do.
A lot of what the media doesn't show you when you see other successful people is how stinking hard they work and how much time and money they put into their business.
Most people don't realize how long, how much effort, or how much money it takes to start and grow a business.
If you are working on your business everyday, and you’re starting completely from scratch, then you can expect to make consistent sales in 1 to 3 years.
The key is to do this without too much financial strain, so you have some money to invest into your business.
I meet so many people who think they should already be making consistent sales after just months of starting.
It is possible to get there and get there quickly, but it's not likely to happen without any form of training or coaching.
People also have this expectation that if they make something beautiful and put it up on a website, that they're instantly going to be bombarded with a ton of sales.
That may have been true 15 years ago when the internet was still very new, but there is just too much noise and competition online these days.
Nowadays, merit alone is not what will make you successful.
You need to make a product that people actually want to buy and that they care about.
There needs to be a lot of strategy, thought and hard work that goes behind promoting your shop in reaching out to people to get them coming to your website.
I know at this point all of this sounds super depressing and almost impossible to do, but this leads me to my next point which I hope makes you feel a little bit better about this!
3. Don’t Give Up
The third thing I want to mention in this post is, your business will fail only when you have decided it has failed.
If you: keep showing up for your business and working on it everyday, have expectations that are aligned with reality,constantly learn how to be better at running your business, it is impossible for you to fail.
Just remember to:
- Keep showing up for you business
- Work on it everyday
- Keep your expectations aligned with reality
- And constantly continue learning how to do better at running your business
You will eventually make it, it's only a matter of time.
This is a huge mindset point!
Only you can define what failure or success means to you.
I can talk to one shop owner who thinks that having 5 sales a month is amazing for them and that they're doing great.
Then the next day I can talk to another shop owner who thinks that 5 sales a month is nothing and that they're a failure.
It's your classic, glass half empty or half full situation.
And let me ask you this, what do you do when you think you're failing?
Most people give up.
It is at that moment when you've decided to give up, that your business has failed. There is no other point in time that your business fails.
You could literally be thousands of dollars in debt and making no sales, and still be working on your business.
That's not failure!
Because as you keep working on your business, eventually it has nowhere else to go but up.
There have been many times when I felt like closing shop or like I’m a failure.
I have felt that way when I was making no sales, and I've also felt that way when I was making thousands of dollars a day.
Success or failure are just arbitrary labels that you define yourself.
So your task is to define them in a way that serves you, not to make it impossible for you to accomplish.
But if you fall into the trap and you've decided that success only means making $1,000 a month, then you’ve set yourself up for a lot of disappointment.
Disappointment leads to frustration which leads to feeling like giving up and that leads to failure.
Do you see where I'm going with this?
It really is all in your head, and just like anything, mindset is something that you can improve over time but only if you work at it.
I know people who are making millions of dollars, who still have the humility to seek out coaching because there is no end to improving yourself or your mindset.
It makes sense because your mindset is going to be the biggest thing getting in your way.
Here are some actionable things you can do after reading this post, pick up some books on mindset.
Check out The Secret, there is a documentary on it called the Secret on Netflix.
I've also been reading a book called Super Attractor by Gabby Bernstein that I highly recommend! It takes the concepts of the Law of Attraction and puts it into practical steps and strategies that you can actually take action on.
Angela Duckworth’s book, Grit: The Power of Passion and Perseverance is another good read.
I also recommend:
- The 5 Second Rule by Mel Robbins
- You Are a Badass by Jen Sincero
- The War of Art by Steven Pressfield
- Big Magic by Elizabeth Gilbert
The moment that you can take control over your lizard brain instead of taking its lead all the time, is when everything falls into place and you start to experience flow.
And more things will go your way!
I hope you stay persistent in your handmade business journey and have found this post motivating.
If you've got some of your own mindset advice that you can share with us, leave a comment below. I would love to hear from you.
Don’t forget to check out my YouTube channel for more great tips!