Building up a jewelry business takes time. The creativity required to make outstanding pieces is a labor of love, and there’s no rushing perfection. However, investing in equipment, developing marketing and other necessary business skills, and finding sales channels add to the early financial strain. While some jewelry entrepreneurs have a business credit card for these expenses, the monthly repayments can quickly skyrocket.
This is why taking out a business loan to cover these expenses is a great move. A business loan will help you to sustain your new jewelry business, pay for expenses that would otherwise be hard to cover, and fund any new equipment or tools that you need to invest in. If you’re on the cusp of launching your jewelry business or have recently done so, here’s everything you need to know about taking out a loan.
Start With A Business Plan
A business plan is the best way to create a roadmap for your jewelry business. It’s how you’ll keep track of your goals and plans and track your trajectory from opening to operating and beyond. You can also use this plan to create a business proposal for banks and financial institutions when you’re ready to apply for your loan.
If you’ve been operating for a while and want to expand your business, having a clear, concise plan and proof of previous profits will help potential lenders or investors understand your historical growth. It will also assist in calculating the potential growth trajectory that a loan would provide.
Business decisions you’ll need to consider before applying for a loan include the type of jewelry you plan to make. Is it fashion jewelry with a commercial appeal or more bespoke, one-of-a-kind pieces? Other considerations include whether you’re making the pieces yourself or outsourcing this to a manufacturer and whether you need to hire additional staff. You’ll also need to consider whether you’ll continue to work from home or rent a workshop space somewhere if your loan is approved.
The Many Ways a Jewelry Loan Can Help A Small Business
When it comes to taking out a loan, you’ll already have plenty of ideas on how it can help you to grow your business. These are just some of the most common benefits:
Hiring Additional Help
Taking out a business loan is a fantastic way to fund additional staff until you start turning a larger profit. Whether this is hiring someone to keep your books, as an assistant in your workshop, or as a salesperson, extra funds can help you to expand your business’ workforce in many different ways.
Another option is to hire or enlist the freelance services of a marketing professional who will showcase your work or brand to a wider audience and demographic.
If you expand exponentially, then renting store premises will require even more additional staff.
Paying for Professional Photographs
If you’re advertising online or on social platforms, great photographs help to sell products. Photos will show your audience precisely what you offer and how your pieces could be incorporated into their lives.
A jewelry loan can provide the funds you need to pay for a professional photoshoot. This will ensure that you have a stunning portfolio that showcases your designs in their best light and makes your pieces more marketable.
Boost Your Marketing
Putting money into your advertising efforts from a loan will help you to create tailored marketing campaigns. Having the budget to boost your social posts will almost always result in higher sales, as will having the capital to pay for other marketing campaigns.
If you make a name for yourself, you could even approach shops that may be willing to showcase your jewelry in-store. In today’s world, marketing is key to every brand’s success, and even a small loan can give your business a big boost.
Selling Via New Channels
If you’ve been selling your jewellery at craft fairs or online on platforms like Folksy or Etsy, a loan could expand your options considerably. You could use the funds to create your own website where you can sell directly to the public, or you can set up a store on Amazon or similar sales platforms.
If you’d prefer to trade in the real world, you can afford the stall fees at larger, better-attended, and more prestigious markets or antiques fairs. Or you could open a concession stand in a larger department store or mall.
Access To New Inventory and Stock
A loan will assist you in expanding your creative endeavors and give you the capital to create exciting new pieces. You can use the extra funds to work with different metals or mediums, purchase more expensive stones, or create larger, more elaborate works.
With a bigger budget, your creative limits are reduced, and you have the freedom to explore your craft a whole lot more. It also reduces the risk somewhat if your experimental ranges don’t sell quickly, as you have capital to fall back on.
Purchasing Better Quality Equipment
While you likely already have a jewelry bench and all the basic tools, taking out a loan can give you access to higher-quality equipment. For example, better-quality rotating tips will polish up your work to perfection, while finer pliers and ring mandrels allow you to expand your sizing and offerings.
Each upgrade will improve whatever it is that you create, ultimately leading to you producing a high-end jewelry collection. Additionally, you’ll also have more freedom to try new techniques and explore different ways of refining your jewelry-making process.
More Capital Means Greater Opportunities
While taking out a loan is not something that appeals to every jewelry entrepreneur, the benefits are undoubtedly worthwhile. If you understand how to calculate profit margin, you can quickly see that having extra capital for growing your business comes with numerous benefits.
The ability to have more creative freedom and the tools to market your business can help you to grow, both in your craft and in your business. If securing a loan wasn’t a consideration previously, it may well be one now, and for good reason.