Like all craftspeople I love making my work, I love my raw materials, I love my old tools and tools I have made myself, I love the process of making, I love hearing from customers that use my bowls and spoons.
Like most craftspeople I don’t enjoy trying to sell my work, or running the business, or filling out my tax return, or deciding how much to charge for a piece of work. This is in part a mental block, there are people out there that enjoy these things and I want to learn to do them better. I want to be able to offer my customers great customer service and I know at the moment it can be rather hard work buying things from me.
Walpole is the group of top British luxury businesses and through the Crafted scheme they offer business advice from top industry professionals to craftspeople who want to be better at business. Perfect then for me, I applied and am absolutely delighted to have been selected as one of this years 9 lucky craftspeople.
We are each allotted a business mentor, someone who the judges think will have a feel for our business and who will meet with us and give voluntary time and advice to help us develop. My mentor is Bill Amberg his studio specialise in luxury leather work, we have not met yet but I love quality leather work and am very much looking forward to visiting the studio.
Last week I was in London for the first of our monthly meetings at which we will learn about such things as branding, marketing and PR, pricing and brand strategy, building your business online, legal and intelectual property and we started last week with “raising finance”.
My starting point was that this was perhaps one of the less important sessions for me. I have always run a business model that did not rely on debt. I keep overheads low so have never needed to borrow for the business. I am not closed minded though and the speakers were very very good on their subjects. Top tips for me came from Alistair Campbell of Savoir beds, we learned how he had bought the business when the Savoy sold off their bed manufacturing business in 1997 at which point they had 2.5 employees and one customer (the Savoy) who had wisely enough bought all the beds they needed before selling the business on. Alistair has built the business to now employ 120 people and have a turnover of £7 million without compromising on the time consuming handmade production methods.
I love the tag line of the website “spend a third of your life in first class”.
Alastair asked the key question why might you need to source finance? There were two answers
1 because your business is basically unprofitable.
2 because you have a profitable business which you want to invest in to grow.
You can guess which if these is a good reason to borrow money and which is not.
Alistair related stories of negotiations with bank managers over the years but the best advice was perhaps the discussions about cashflow. His raw materials are expensive huge quantities of things like horse tails which often have to be paid for long before they are delivered and maybe years before the final bed is delivered and paid for by the customer. All craftspeople are in this position and many who make to order have to buy in materials long before the customer pays. If you don’t take a large deposit then you are effectively giving your customer credit and running yourself in debt. The more money you can encourage the customer to part with and the sooner the less likely you are to have cash flow problems. Apparently Harrods run a sort of loyalty scheme which offers benefits depending on how much you spend, if you are buying a special commission from them then only the deposit counts toward the loyalty scheme so a very high proportion of customers pay 100% deposit. If a furniture maker takes an average of 3 months from commission to delivery and takes 50% rather than 25% deposit that makes a huge difference to cashflow.
All good food for thought. I look forward to my meeting with Bill Amberg and to the next workshop on branding in February.