The Craft and Design Entrepreneur 2011 survey

Summary

The Craft and Design Entrepreneur 2011 survey examines the situation of craft and design entrepreneurship in Finland and the development challenges entrepreneurs are facing. The results of the survey are consistent with previous studies, but some changes are also evident. In general, craft entrepreneurs believe in their possibilities to maintain their business activities at their current level or even to expand them. They have confidence in consumers’ interest in craft, art and design products.

The material for this survey was compiled through an Internet questionnaire in February 2011. We received 431 replies, 80% of which were from female entrepreneurs. Most of the entrepreneurs are in prime working age: over 70% are under 54 years old. Almost 80% of the respondents live in Southern and Western Finland. The great majority of the companies that replied have an annual turnover of over 10,000 euros, and well over half have more than 17,000 euros. Nearly 80% of the respondents were full-time entrepreneurs. The most common company form was sole proprietorship and the most frequent production material was textiles. The questionnaire for purchasing agents was answered by 16 shop managers.

Growth-orientation
Over half of the respondents say that their company is growth-oriented and about a third strive to maintain their current position, while 10% have no growth targets. Growth-orientation does not necessarily refer to an ambition to grow into a large business and hire new employees. Growth can also refer to increased profitability.

Professional Identity
Entrepreneurs in the craft and design business work as independent creators. For them, entrepreneurship is a way of organising their activities and making a living out of it. The most important thing about the work for the respondents is independence and free creative work. It is also important to develop as a creator and produce products of as high a quality as possible.

Consumers’ Buying Behaviour
The great majority of the entrepreneurs who answered the questionnaire see no change in consumers’ buying behaviour regarding craft and design products. Purchasing agents, on the other hand, replied that customers buy less than before. They also think that customers care less whether a product has been made in Finland than they used to.

According to the respondents, customers’ buying decisions are first and foremost affected by the product’s individuality, quality and price and how well the product suits the customer’s style. Of under 34-year-old entrepreneurs, 60% are of the opinion that price is the most important factor when making a buying decision. Purchasing agents graded price as the most important factor, with quality and suitability for the customer’s own style coming second and third.

Marketing
In 2011, companies intend to invest in the following measures, given in order of importance: maintaining their web pages’ topical contents, acquiring distributors and networking. They will participate to a lesser degree than in 2009 in direct sale and trade fair events in Finland. Under 35-year-old entrepreneurs invest more than the rest in networking, and 19% of the respondents plan to increase their use of social media.

The significance of web pages in marketing has increased, although more than half of the respondents are of the opinion that no changes have occurred in the importance of web pages for marketing and sales since the previous year. For 36% of entrepreneurs, the number of contacts they have received through their websites has increased.

Success Factors and Development Challenges
For entrepreneurs, the most important success factors are the product at 81%, standing out at 50% and customer service at 38%. Only 6% of the respondents mentioned a service product, such as a tourist and welfare service, as a success factor. For the most part, the entrepreneurs who responded to the questionnaire make material products. The respondents’ turnover only comes from products in 32% of the cases, more from products than services in 37% and equally from products and services in 19%. The significance of services has increased slightly and 6% of turnover arose exclusively from services.

According to purchasing agents, there is much to be desired in the suppliers’ marketing materials, package design and readiness for partnership (exclusive right products). In addition to this, there is room for development in the correct segmentation of products, product information and functionality (i.e. products should be properly tested).

An Ethical and Sustainable Mode of Operation
Consumer behaviour is increasingly taking a turn towards more moderate consumption. It is time to make an honest analysis of whether craft, art and design products and services are sustainable, beautiful, evocative, profitable and whether their existence is justifiable. Consumers and tourists want stories about the maker, the products and services. Moreover, sufficient information about the materials, use, care and disposal should be included with the product.

Cultural Tourism Services
Tourists today are interested in Finnish everyday life, the countryside (cleanliness, pristineness, the leisured pace), culture, genuine experiences and handicraft and design entrepreneurs’ way of life and products. Tourists’ expectations and demands for quality are growing continually and this is why it is important for entrepreneurs to focus on developing the overall concept of their services, taking into account their visitors’ points of view, and to join forces with tourism operators.


Company Development
In the opinion of entrepreneurs, the best development measures are precisely designed training, networking, support for marketing and product development, organising sales, publicity campaigns and reducing value added tax. It appears that there has been such an abundance of free training through various projects that this has lead to distorted expectations. Training is expected to improve continuously, although entrepreneurs are not prepared to pay for it. More than general courses,
entrepreneurs need help in their current situation and they hope to receive financial assistance for product development, exhibition and fair costs and for hiring their first employee. In addition, value added tax is considered unjust.

Development Services
Entrepreneurs feel that development services are of very little benefit to them. Their opinion is that entrepreneurs’ needs are not taken into account in these services and not enough information is given about them. Entrepreneurs expect the consultants of development services to have better expertise in their field of business. They also expressed a desire for one agency that provides all the services they need.

Conclusions
The starting point for successful entrepreneurship within the field of crafts, art and design is skilful entrepreneurs, insightful products and functional marketing channels. Entrepreneurs’ competence can be influenced by good vocational education, tailored further training and business services. Essential components of a good entrepreneurial environment include fair taxation and financing methods which motivate entrepreneurs to hire employees.

Product development is a continuous process that can be promoted, for example, with innovation vouchers. Visibility and functional marketing channels can be strengthened through actions that are shared by the whole branch of business. The answers to the questionnaire presented a clear message to developers: training and business services must be reformed in cooperation with entrepreneurs and the accessibility of the services must be improved by simplifying the system and developing communications about the services. An additional challenge that developers face is to boost the visibility of the crafts and design trade and to develop marketing channels.

Further information:
Taina Tervonen, The Finnish Crafts Organization
taina.tervonen(at)taito.fi