If you spend much time as a vendor at craft markets, you’ll sense that a lot of vendors have a strong growth mentality. They’re always on the lookout for new markets to sell at. They’re developing new product lines. They’re trying to connect with more and more customers.
For a long time, I was one of those growth-minded vendors.
It has been a decade since I first set up my a display table at a local craft market, and tried my hand at selling my spoons, spatulas, and cutting boards.
Since then, I’ve grown the enterprise into a side-business. I’ve learned a lot about the economics of handmade utensils. I’ve established myself as a local “maker,” and I have several different product lines that have proved reliable sellers.
Before the COVID-19 pandemic, I was adding additional market events, scheduling more production time at home, sourcing raw materials, experimenting with new product lines, and upgrading some of my tooling.
Then the pandemic shut everything down. That gave me time to think.
In those market-free months, I began to reflect on what I wanted my woodworking to look like in the future, and how I wanted it to integrate with other parts of my life. I reflected, too, about what parts of my craft I still actually enjoyed doing, and which parts I needed a break from.
As it turned out, not bringing in extra money from markets during the pandemic didn’t really hurt us financially. I don’t need the extra income as much as I once did. Also, my body is aging–like everybody’s does. I still enjoy pushing a sharp blade through fresh wood, but I don’t enjoy the heavy work of splitting stock out of logs as much as I used to. I could stand to slow down physically.
I have concluded that I want to spend more of my free time doing things other than making stuff for sale. I want to spend more time writing. I’ve been asked to take on additional responsibilities at church. And my children are rapidly growing up. I want to invest more time in relationships and less time in trying to generate extra cash.
That doesn’t mean I’m quitting the spoon-making business. I’ve invested a lot of time and effort into perfecting my production process, and I have lots of great spoon wood stored up. Besides, there are still lots of people who want my products, and it makes me happy to create things that people enjoy using every day.
I just don’t have any interest in growing my business anymore. In fact, I am already shrinking it in small ways. My plan going forward is to shrink it gracefully, and to bring it to the point where it remains enjoyable for the long haul.
In America, business success is typically measured in growth. A healthy business is expanding into new markets, gaining a greater market share, diversifying of product lines, increasing profit margins, adding employees and departments, and increasing shareholder value–or so I learned from reading Dilbert cartoons. A failing business, on the other hand, is losing market share, cutting production, selling off assets, laying off workers, and has a “negative cash flow.” And often, businesses that stop growing–or that attempt to grow too quickly, or in the wrong ways–immediately start failing.
After all, you can’t grow your business forever. Eventually even the growingest business reaches market saturation, and/or runs afoul of antitrust laws. Or the company stops being run by people who genuinely believe in its intrinsic value. And then the inevitable decline begins. (Jeff Bezos acknowledged that this will eventually happen to Amazon.) The people who originally grew the business sell it off to others, who begin to cannibalize the company to make back their investment before selling off the remaining husk to still other investors, who will do the same thing until there are no assets left to liquidate. (Case in point: F+W Media, publishers of Popular Woodworking Magazine.)
I will never have a woodworking business that could be sold, but I intend to avoid the growth-and-decline cycle that has become so very typical of American businesses. My intent is to bring my own little side-business to a healthy equilibrium, where I am maintaining a manageable production schedule that is able to cope with little fluctuations in demand–a few more utensils one month, and a couple fewer the next month–without forcing me into marathon spoon-making sessions during peak market seasons.
I intend to shrink the business a little, and then keep it there. The question is how to do it.
I know that I could be selling more product than I currently do–which is another way of saying that demand is outstripping supply. As far as I can tell, there are two basic strategies for dealing with high demand:
- Increase production to meet demand
- Raise prices to decrease demand
I have already said that I want to decrease my production, not increase it. So should I just raise my prices?
Despite the fact that inflation is already happening (especially noticeable in the lumber industry), I have always taken a certain amount of pride in the fact that my handmade utensils are not too expensive. I don’t want to make luxury items for the wealthy. I price things to be affordable to regular, working-class people, too. I have no interest in being on the cutting edge of rising prices; I would rather lag behind.
However, there is another way to effectively raise the cost of an item without actually increasing its monetary price. Money is not, after all, the only measure of value. Value can also be measured in terms of time, especially in the amount of time you have to wait to acquire something. Remember when people waited in line all night to be among the first to purchase a new smartphone? Or think about the wait-time to purchase a fancy new electric car. The wait-time is part of the price you pay. Manufacturers could have just raised the sticker price until demand fell to the level of the supply. But they didn’t. And neither will I. There is more at stake than maximizing profits.
So, if you’re at a market and considering whether to buy some of my spoons, you might ask me when my next market is going to be. If I say, “tomorrow,” then it’s easy for you to walk away, because you can always make that purchase the next day if you still want to. But if I say, “in two months,” the pressure is on. You have an opportunity that you won’t have again for eight weeks. If you want those spoons, you’re going to have to buy them now or wait a long time for them. The wait-time is part of the price you pay.
Therefore, if I show up at fewer markets, I have effectively made my products more scarce, and have thus increased their value–without jacking up the sticker price. That just means that I won’t keep excess inventory on hand. I can sell everything I make, even at markets that aren’t particularly well attended.
This only works because local people already recognize and value my products; it wouldn’t have worked when I first started ten years ago. But as a strategy for not growing my business, it’s already working fairly well.
Shrink Product Lines
Not very long ago, I was coming up with new items to make and sell nearly every season. I suppose it started with the thumb-ring page holders. Then there were cutting boards and meat mallets. And the carpenter bee traps. And of course the pipes. But not all of those products were enjoyable to make, and some didn’t sell very well.
Take cutting boards, for example. After making a few, I came to a firm conclusion: I don’t really like making cutting boards. It’s not that they’re hard to make. They’re actually embarrassingly easy, and therefore boring, to make. Lots of other local woodworkers make custom cutting boards, and that’s great. Some of them do really good work, and I don’t try to compete with them any more.
I’m not saying I’ll never make a cutting board again. (I’m still willing to make you an overpriced cutting board if you really want me to.) But I’ve decided never to have cutting boards as a part of my regular inventory.
I am finding that a big part of shrinking gracefully is staying focused on just a few kinds of items that have turned out to be reliable sellers from market to market–spoons and spatulas. And churchwarden pipes. Those sell as fast as I can make them! And because pipe making is a rewarding challenge, I plan to keep doing it from time to time.
I’m sure I’ll experiment with other product lines now and then, just to keep myself fresh. I might run across something that I really enjoy making batches of. But I don’t ever want to have thirty different kinds of items on my market table. Eight or ten different kinds of utensils is plenty.
What I Learned from Rodney
A couple miles from my house, there’s a little independent hardware store that’s run by Rodney and his family. He’s a good businessman, but one of the things I appreciate most about him is that he has no “growth” mentality. His store sells live plants in the spring and fall, and basic plumbing, electrical, and gardening supplies the year round. The building is small but well-stocked. Prices are a bit higher than they are at the big home centers, but Rodney still does a brisk business, judging by the number of people coming in and out every day. He could have expanded his business years ago by acquiring a bigger building, branching out into paint and lumber, hiring managerial staff, and trying to compete with the big stores. But he never has, and he never will.
Rodney has proved to me that a successful business need not be growing and expanding all the time. Once a local business finds its niche, it can go on for decades as long as it keeps doing things well. That’s the kind of enterprise I want to run, if I have to do business at all.
No business lasts forever–not even some that have been around since the Renaissance. Mine won’t either. Markets change irrevocably: technology becomes obsolete, government regulations shift, and local economies implode–or explode. My little craft table at the local farmers market is somewhat insulated from the vicissitudes of the global economy, but not immune to it. But if my side-business is going to shrink, I would rather it shrink on my own terms and on my own timetable, instead of suddenly being forced into reduction or closure by market fluctuations.
My new business model has no plan for growth.