The Economics of Craft

Making it viable

What is craft?

Craft as a productive activity is often seen as an effective means of creating sustainable livelihoods and nurturing small, medium and micro-enterprises. This is essentially because it has the unique potential to draw on existing cultural and human capital. It is also an accessible industry with low entry levels both in terms of skills and capital requirements, and because it is often home-based, allows for flexibility in terms of childcare, household and in the rural areas, agricultural production.

Internationally, it is seen as an important development sector: “Handicraft and cottage-industry enterprises in particular foster development in rural areas, and where they have been export-oriented have been major sources of income and a spur to modernisation.

(The South African Craft Sector – Erica Elk, Executive Director, Cape Craft & Design Institute)

What can we learn from Saychelles

They have a craft policy In January 1995, they

officially launched the second edition of the policy

New strategies to improve quality, variety, value, sales and customer satisfaction

Use of innovation, greater local identity, better packaging, display and publicity as well as production facilities

(Ministry of Industries and International Business 2002)

As craftsmen we have to ask:

1. Does the craft council have projects?2. Have you formed linkages within the industry / sector? E.g. any of the

international craft councils3. What references and accreditation has the council been receiving? 4. What national and international exhibitions does the craft council

membership get invited to?5. How are the members benefiting from these programs?6. How would you like to see the membership benefit from the programs7. How are the craftsmen benefiting?8. How willing are you to participate in programs to realize the potential

benefits?9. Are you willing to develop as businessmen?10. What steps have you / are you putting in place to grow your

entrepreneurial efforts?

J. Paul Getty – How to be Rich “I by no means consider the works of art I

own as inanimate ornamental possessions. To me they are vital embodiments of their creators. They mirror the hopes and frustrations of those who created them – and the times and places in which they were created”

“No one can possibly achieve any real and lasting success or “get rich” in business by being a conformist. A businessman who wants to be successful can not afford to imitate others or to squeeze his thoughts and actions into the trite and shopworn molds. He business be very much an individualist who can think and act independently. He much be original, imaginative, resourceful, and entirely self reliant entrepreneur….he must be a creative artist rather than merely an artisan of business”

Facts about Craft and Craftsmen Craft dates back to biblical times where it is recorded in 1st and 2nd Chronicles in

conversations between David and his son Solomon. NIV 1Ch28:20 and 2Ch2:7 Craftsmen are always ready to help Craftsmen work in any material – carpenter, smith, engraver, etc. KJV refers to them as

Artisans and Artificers – materials included gold, silver, bronze and iron; purple crimson and blue yarn

Craft is a $14 Billion Industry - see CODA (Craft Organization Directors Association) Survey results – “The Fine Crafts Market is a $13.8 Billion Industry”.

To compare – The Crafts Industry is about half the size of the $29.9 Billion Toy Industry (Toy Manufacturers of America).

It is roughly three times the size of the $4 Billion organic foods industry (Organic Trade Association)

The American Society of Florists says that the Craft Industry is slightly smaller than the $16 Billion retail floral market.

Crafts people who have employees generally have higher incomes than those with no employees

While retail shows are the most popular selling venue, more revenue is generated from wholesale markets.

Direct mail accounts for 53% of annual craft sales. Wholesaling within the USA accounts for 27% of annual sales Wholesaling outside the USA only a mere .47% of total distribution

WIIFM?Looking at retail sales alone… Studio sales contribute 27.09% of total rev

with dollar values averaging $11,632 Craft fairs contribute 51.80% of total rev with

dollar values averaging $16,076 Commission sales contribute 14.80% of total

rev with dollar values averaging $4,954 Other sales contribute 6.31% or approx

$2,263

Business systems

Are you considering your marketing? Looking at your product Calculating your prices Scrutinizing your promotion Strategizing your promotion Goals and Vision Strategy

Financial considerations

Working Capital

Marketing and sales Distribution

Raw materials Labour

Remuneration Incentives

Business structure and strategies

Type of business set up Sole Proprietor Partnerships and alliances Incorporation

Production Concerns

Labour Raw materials – acquisition and storage Work in progress Debt management Insurance Storage Intellectual property – protection from copy

artists Interaction with suppliers

What’s going to make you get out of bed to do this? Love for creation Need to support yourselves and family To create a legacy Enjoyment of the satisfaction your creations

bring to the end user

To conclude

Integrity – Have it! Nurture the people you work with Faith is what you have to activate to make it happen Listen to people Understand people Enlarge people Navigate for your other people Connect with people Empower people Reproduce other leaders – Be an influencer

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