From the March 1997 issue of Entrepreneur

Transforming a crafts hobby into a homebased business can be a little bit of heaven and a little bit of hell. At least that's the way it was for Howard Stevens, founder of Shuttleworks Ltd., an 8-year-old Berea, Kentucky, firm specializing in rugs, tote bags, place mats and table runners woven from rags.

Stevens began weaving 12 years ago to relieve stress from his job as a university administrative assistant. "I started having all this merchandise pile up, and I could only use so many things," recalls Stevens, who lives and works in an area known as Kentucky's "crafts capital." To get rid of some of his inventory, he began selling at local crafts shows, where a woman asked him to supply items wholesale for her shop. "I had no idea what she was talking about," says the weaver.

He learned quickly. From selling at crafts shows and wholesaling in the basement of his home, Stevens progressed to opening a retail shop, using $2,000 borrowed from a friend. In these early days, Stevens and the weaver who apprenticed him were the only suppliers.

"We had mohair stoles and a few rugs, and we were proud of it. Then I realized by looking at other shops in the area how little inventory was in my store and knew I had to hustle," says Stevens. He added lines from other local crafters and increased production of his own products, all the while building and maintaining his wholesale accounts and continuing to do crafts shows. The hectic pace continued almost nonstop for five years.

At its height, Shuttleworks' retail outlet made $250,000 a year. "Then one day I [asked] myself, `What am I doing? What's happening?' I thought I was losing it," remembers Stevens. "I didn't want it anymore."

After five years of working seven days a week with little relief, the store had taken its toll. Stevens was burned out.

Stevens' decision to throw his all into making Shuttleworks a success was the correct path for a hobbyist-turned-business owner, says Beth Duncan, a professor and homebased entrepreneurial business specialist with Mississippi State University's Cooperative Extension Service. However, his method of execution was a little extreme.

"I see this repeatedly," says Duncan. "People have a hobby they're good at and reach a point where they try to sell it. But they've still got their hobby hat on. Unless you take the hobby hat off and throw it away, you won't be successful."

What is the "hobby hat"? According to Duncan, it's thinking that the craft is something you do just for fun, and maybe you can make a little money at it. Being successful, on the other hand, takes making a conscious decision that what you do is no longer a hobby and that you are in business to make money. Making a profit has to be the primary motive, she says, and having a fun hobby has to be secondary.

Like Stevens, Hahnville, Louisiana, folk artist Lorraine Gendron had a powerful motivation to turn her hobby into a full-fledged business: necessity.

"My husband worked in the oil fields, and during the oil crunch here [in the early 1980s], unemployment was tremendous. So we turned to what I could do," remembers Gendron.

She had always painted and had even taken a porcelain doll-making class where she learned to pour molds. Later, Gendron discovered that the perfect material to make her dolls was almost literally in her own backyard.

"I was working with limited means and thought, `Where can I get some free clay?' " recalls Gendron. Then she remembered the Mississippi River, which runs behind her home. "We went to the river, brought some clay home, and dried and fired it. When I took it out, it was red," she says.

Gendron used the clay to make dolls representative of Louisiana--a mixture of people; red, black and white.

More than a decade later, and with sales averaging $50,000, Gendron's company--Mississippi River Mud--sells clay and wire dolls, as well as painted and sculpted scenes reminiscent of Louisiana culture.

Crafts Craze

Both Stevens and Gendron went into their ventures relying on gut instinct and a lot of faith. They also launched their companies at a time when the crafts field was not nearly as crowded as it is today.

The high level of interest in selling crafts is why Duncan, at the Cooperative Extension Service, stresses the need for market research. Can you produce the product at prices that will let you make a profit? Who is going to buy it, and how are they going to buy it? There's also a more philosophical question to consider: Do you love this hobby enough to work at it all day long, every day, for years?

Once you've figured out customers, distribution, profit margins and financing, another critical ingredient is needed to increase your chances of business success, says Duncan. "When you look at research on why businesses fail, at the top of the list is lack of business skills--management and financial. You can learn these skills," she says. "Take workshops at your local Small Business Development Center, community college or cooperative extension service."

Many states have also started programs that promote local crafters, including Louisiana, Maine and South Dakota. Kentucky offers one of the most extensive, according to Duncan. Called the Kentucky Craft Marketing Program, the 15-year-old effort provides craftspeople with business technical assistance, a listing of craftspeople in the state, a resource directory and an opportunity to exhibit. Those individuals who meet the program's high standards also receive assistance marketing worldwide.

Master Class

If it's done properly, your crafts business can generate a six-figure balance sheet like that of Sheree Soles, the force behind Soles Collectibles in Brandon, South Dakota.

Soles, who like Gendron designs clay figurines, started her business in 1988. Now, nine years later, she sells more than $100,000 in merchandise annually through crafts shows and mail order, primarily in the Midwest.

A former art teacher, Soles stumbled into her business by accident when she opened a homebased day-care center. When parents saw Soles' dough art in her home, they were so impressed, they started asking to buy the pieces.

Soles, who has since switched to clay as a medium, says she had no aspirations to run her own business; it just happened. "It sort of evolved, and I am fortunate it's turned profitable. But it's been a long, slow process, and in some sense I don't think it could have gone any faster," muses Soles, who needed the slow pace to learn to become an entrepreneur and perfect her production process.

A significant contributor to the success of her business was an article about Soles Collectibles published in a 1994 edition of Country Woman magazine that generated more than 20,000 letters soon after its release; others continued to trickle in as many as two years later.

One strategy Soles has used to grow her business is keeping close tabs on what's in fashion. She peruses magazines to see what styles of home decor appear repeatedly and follows those trends. "I also do collectible pieces that are available only for one year," says Soles. "That keeps people interested, and it keeps [my creativity] fresh."

New Directions

This trio of crafts entrepreneurs has some good advice for those contemplating the same move from part-time hobby to full-time business.

Now that he has retrenched and come full circle back to the basement of his home, Stevens is focusing solely on wholesaling and selling his woven products at crafts shows and looking forward to a simpler future. "I know I can't do it all," he says, "so I would like to take advantage of [state-funded grants and loans from government agencies] and open another retail business. I would also like to build the wholesale side, and this time I would hire two to three people."

His hard-won advice? Take a chance, and don't let others dissuade you from trying. But be smart about it. If you plan to make the business your sole income source, "you should have a year's worth of income in the bank at least, so you have a cushion to fall back on," says Stevens.

As you build your business, be patient, counsels Soles. Don't get discouraged when you have a bad show. Talk to other crafters and get the names of good shows they have found, but also realize that a good show for one person may not be the right one for you.

Test-market your products first to evaluate consumer response, advises Gendron, who says she has stopped producing many of the items she loved because the public was not interested.

Combine all this with business know-how and a little entrepreneurial luck, and the hobby you've always loved might just make working on earth a heavenly delight.

Contact Sources

Kentucky Craft Marketing Program, 39 Fountain Pl., Frankfort, KY 40601, (888) KY-CRAFT;

Mississippi River Mud, P.O. Box 282, Hahnville, LA 70057, (504) 783-2173;

Shuttleworks Ltd., P.O. Box 65, Berea, KY 40403, (606) 986-1825;

Soles Collectibles, 26728 482nd Ave., Brandon, SD 57005, (605) 335-6052.