Start an etsy entrepreneur business by following these 10 steps:
- Plan your Etsy Entrepreneur Business
- Form your Etsy Entrepreneur Business into a Legal Entity
- Register your Etsy Entrepreneur Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Etsy Entrepreneur Business
- Get the Necessary Permits & Licenses for your Etsy Entrepreneur Business
- Get Etsy Entrepreneur Business Insurance
- Define your Etsy Entrepreneur Business Brand
- Create your Etsy Entrepreneur Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your etsy entrepreneur business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an etsy entrepreneur business?
The startup costs for an Etsy entrepreneur business are low. The main expense is the cost of materials for making good (if selling handmade items) or the cost of buying goods to sell (if selling vintage items). The other startup expense is Etsy’s listing fee, which is $0.20 per listing.
Many business owners keep only a small amount of inventory on hand. They make or buy more inventory as their current stock sells. This lets them keep their inventory in a small space, usually somewhere in their home so they don’t have to lease space.
What are the ongoing expenses for an etsy entrepreneur business?
The ongoing expenses for an Etsy entrepreneur business are also low. They include:
- material or inventory costs
- a $0.20 listing fee for each new item listed
- a 3.5 percent transaction fee for each transaction
- a 3 percent + $0.25 payment processing fee for each transaction
- shipping fees for each order
Who is the target market?
An Etsy entrepreneur business’ ideal customer is someone who likes handmade or vintage items, and has some discretionary income. Such a person may be interested in the wares an Etsy entrepreneur business sells, and they have money to spend on goods.
How does an etsy entrepreneur business make money?
An Etsy entrepreneur business makes money by selling handmade or vintage goods. Most businesses sell only to customers, but Etsy has a platform for launching into wholesale.
How much can you charge customers?
Business owners get to choose how much they charge on Etsy. Most price their items below $50, though. It’s easier to sell items at this price point than above $50. Also, Etsy’s editors highlight items priced below $50.
How much profit can an etsy entrepreneur business make?
How much Etsy entrepreneur businesses make varies. Some businesses have only a couple of sales per month or even per year. Others have hundreds of sales each day. The most successful businesses bring in well over six figures a year.
How can you make your business more profitable?
An Etsy entrepreneur business can improve its marketing and add a revenue stream by starting an art blog. A blog related to the items that the business sells will increase the amount of exposure the business receives. The blog can also be used to sell other items through affiliate links or sell advertising space.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Etsy Entrepreneur Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your etsy entrepreneur business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an etsy shop. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Trademark & Copyright Protection
If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an etsy entrepreneur business
Since Etsy is an online marketplace, all advertising efforts should grow a business’ online presence. Etsy’s Seller Handbook recommends using the following marketing channels:
- search engine optimization
- social media marketing
- email marketing
- giving samples to influencers
How to keep customers coming back
When setting up an Etsy entrepreneur business, it’s important to have high-quality photos. Not only should photos be clear and focused, but they should also be unique. Different backgrounds and angles can help make products pop -- and that’s what convinces visitors to buy items.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Etsy Entrepreneur Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
Anyone who enjoys making handmade goods or finding vintage items might enjoy running an Etsy entrepreneur business. This is a great outlet for artists looking to sell their works.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an etsy entrepreneur business?
An Etsy entrepreneur business owner spends their time on four main tasks:
listing new products as items sell
making or finding products to sell
shipping sold products
marketing their business
Business owners also perform administrative duties. These may include paying bills, ordering supplies, and restocking shipments.
What are some skills and experiences that will help you build a successful etsy entrepreneur business?
Etsy entrepreneur business owners need to have a good to sell, and they need to be familiar with how to sell on Etsy.
Most business owners already have a passion for the goods they want to sell. They normally know how to make the goods or where to find them. Those that don’t may want to take an art course at a local community college, or a crafting class at a nearby arts and craft store to learn how to make something. Alternatively, there are also YouTube videos on how to make many different types of handmade goods.
For many business owners, learning how to sell on Etsy is the bigger challenge. First, business owners should familiarize themselves with Etsy’s Seller Policy. This provides the terms and conditions that sellers must follow. There are several other resources that cover strategies. Some include:
guides to selling on Etsy, such as the one from Intuit Quickbooks
What is the growth potential for an etsy entrepreneur business?
An Etsy entrepreneur business may be a part-time endeavor run by a single person, or it might be a sizable business that has several employees. The overall top sellers on the platform have total sales totaling in the hundreds of thousands. Each day’s top sellers usually have several hundred sales in that day.
Many Etsy entrepreneur businesses only sell on the platform. Some businesses, however, expand to other platforms or even their own site as they grow. (Etsy has a program for launching an independent website supported by Etsy.)
Not sure if an etsy entrepreneur business is right for you? Try our free Business Idea Generator and find your perfect idea.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an etsy entrepreneur business?
When starting an Etsy entrepreneur business, it helps to focus on a particular niche. Even a sub-niche can help a business get started. For instance, a business might focus on pet portraits, religious jewelry or vintage paper goods.
Narrowly defining a business’ focus has two benefits. On the sales side, it helps distinguish a business from generic ones that are in many niches. On the management side, it lets business owners buy fewer supplies. The same supplies can often be used to create several different goods within the same niche.
How and when to build a team
Many Etsy entrepreneur businesses are run by one person. Some business owners bring on employees as their business grows. They usually hire their first employee when they’re no longer able to keep up with demand by themselves.