Way too often creative product entrepreneurs define themselves by what they design or make. They see their "value" as what they create and pay little attention to the rest of the business – including their target market and how they conduct the rest of the business.

Truth be told, the product is the tip of the iceberg.

In the beginning a creative product entrepreneur is fully absorbed with:

• Product Development
• Designing
• Sourcing
• Manufacturing / Making
• Creating a Website / IT
• Marketing on an as needed basis

And that's where fear, doubt and worry start to creep in. It's where the vision of making real money, creating a viable company and the BIG IDEA starts to fade. It's where designers start to listen to others about getting a "real job"; where they start bickering and comparing themselves to other designers; where envy becomes prevalent in their conversations; and where they start blaming anyone and everyone.

Time for an intervention!

Time for a Makeover!

Time to regroup!

Time to look at what's really going on!

It is not the time to pack up your marbles and go get a "real Job".

It's time for the real business to begin.

The truth is your business, up until now has been in existence mode. You have not gone below the surface. It simply IS. And when there's no real plan, only a product created, the creator/designer becomes discouraged thinking either the idea or the product is not good enough or will never make any money.

The real issue is the Business Model, everything that is behind the scenes, below the surface.

It's time to create a viable plan.

How exactly will your business work? Who are you going to sell to? How is your business going to be scalable (easily expanded)? Not all products fall into the same business model, nor do they need to – even though they all start with a core product.

Simplistically, a business model is a recipe for a business. It's how you do business – how you market – how you sell – how you define your target – how you form alliances and partnerships – how you influence – how you brand – how you treat your customers – how your decisions are made. You make a decision and move with it fast.

 

There is an advantage to being small – you can make quick decisions and move fast. Big corporations are not flexible – you are. You can be amazingly creative in how you run your business.

As a creative product entrepreneur, use your creativity; you have the advantage here not to be a cookie cutter. Step further into your brilliance!

Here are two basic models for creative products:

Sell Direct To the Consumer:

A pretty simple sounding model, this one is how many indie and handmade businesses start out, though most do not go far enough. Essentially sales bypass the middleman and go direct to the consumer either via e-commerce or through a party plan or even an affiliate/referral plan.

 

The business may have an Etsy or Artfire account and sell their products direct to the consumer using one of these sites. They also may sell direct to consumers by having a booth at shows, festivals or holiday shows – or even hold home parties. With implementation of good marketing and e-commerce direct to their target market – this business model can be one of the most lucrative for start-ups.

 

It requires stepping up to new marketing tactics with advertising, e-commerce proficiency, creating a loyal following and list building along with blogging and great social media presence. It can easily be a stepping stone to wholesale provided prices are correctly calculated. What holds many back on growing a business in this model is: Not pricing correctly; not getting help or not outsourcing (I have to do everything myself mentality); not advertising enough; spending time in the wrong parts of the business. This is a marketing driven business.

 

At the essence of this model is your relationship to the marketplace. It requires knowing exactly who you are and who your market is. Transparency is pretty much required so you can relate to your customer.

PROS: Easy for most designers to start and when you price for retail your margins are great!

CONS: Selling one to one can be time consuming and marketing must be centerfold in gaining new buyers and followers.

Sell Wholesale to Stores:

This is the way I started my business by selling directly to stores only with no sales directly to the consumer, all products are sold wholesale to stores. With this model careful consideration is given to where your target market shops. The stores can range from boutiques to department stores to big box stores – it really depends on the product, price point and your viability in the marketplace.

 

Basics to a start up for this type of business, in addition to the initial product development, are:

• Creation of marketing materials;
• Professional website and web presence;
• Pricing for profit compatible with your market
• Knowledge of how to market and sell
• Creation of a marketing and sales calendar

 

Sales is the name of the game. Knowing how to pitch your products to the right stores or establishing a sales force is essential to the successful operation. Though some creative products are design driven they also have to be sales driven. This is often where the entrepreneur realizes they are in the marketing business!

 

Growth requires publicity and visibility. This is achieved via publicity, media, placement, strategic partnerships and planning.

 

PROS: Selling direct to stores invites more substantial sales and re-orders. As long as there is a good relationship and sell through the store is likely to buy on a regular basis.

 

CONS: Your quality and pricing must fit your target market's expectations or the business will not be profitable.

 

There are many variations or alternative Creative Models, here are two:

Selling both Wholesale & Retail combining the two models: This is far more acceptable today than it was in the past – but still can be a bit dicey with stores knowing they can buy directly from you and by-pass the store all together. You will not want to compete with your stores. Some stores may not want to place an order with you if you are selling direct so be aware. However, that may depend on your product category.

The Membership Model: Reminiscent of Book of the Month Club, a subscription or membership is sold directly to the consumer and weekly, monthly or whatever time you select a new product or service is sent to your client. This could be something like earrings of the month; dolls with accessories or anything else.

If it is your desire to have your business GO BEYOND the start-up stage, it's imperative that you create a plan and pick a business model. Then work your plan.

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What is your business model ideal? Make sure and leave a comment below.

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