What I write about and why

As I teach Business Studies makes sense to share some ideas!  As a sole trader and an artisan trader these ideas are aimed at individual makers hoping to transition from hobbyist to successful trading.  The principles apply across all businesses but I am specifically aiming these at the artisan groups.  Downloadable templates will be released soon to help you manage your finances, tax return and other useful things - if there's a topic you want addressed, just drop me a quick message.

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How to price your work

 

This is always a very emotive conversation with artisan and crafters because you are not pricing work when you have this conversation you are pricing your own worth! The simplest way is to look for a similar item on Etsy or Amazon and take an average price of things you find.  There is a boring science behind pricing strategies but they don't take into account the emotive side that a hand crafter or artisan brings with them - you're selling a piece of you, a piece that you put love and time into.  This isn't as simple as saying it was £10 at the wholesalers so I'll sell it for £20. 

Burt here's the thing - are you making and selling to pay your bills or are you using it to top up a wage or pay for that family holiday as a treat? That's where the crunch comes in - are you totally sure about which you are?  There is no right or wrong to this question, but being clear on where you are may change your pricing methodology. 

The business text books will talk to you of price skimming, cost plus, promotional pricing and write huge papers on each of these topics BUT you instinctively know which suits you without needing to read these books! For the majority of artisan crafters the cost plus process won't work.  This is where you price how much it cost to make and add your profit margin to arrive at a selling price. The reason this won't work is you are worth more than just the time it took you to paint that picture - people are paying for your skill, the time it took over years to develop, the thinking time, the imagination to see that image before you painted it.  They are paying you because they can't do it themselves and more importantly because they like it.  This is where many small makers slip up.  They go but it only took me an hour to paint that so I can't charge £500 can I?? Yes you can, IF the market is there for you.  If you price too cheaply there will be doubt placed that the quality or worth isn't there, or worse that you didn't actually make it and found it in a car boot sale.  

Also, don't be embarrassed if someone tries to haggle with you - stay your ground! If it's something you wanted out of your stock then fine, but make it sound like you're doing them a massive favour! Think of it this way - would you walk into Marks & Spencer and take an item to the till and say to the staff 'I know this jumper is priced at £45 but I only want to pay £10'.  You wouldn't do it and you'd be squirming if the person in front of you was doing it - hand made is NOT worth less, if anything it's worth MORE.

There will always be people that want a bargain, or feel good for knocking someone's prices down but the thing is you have the choice to say yes or no to that request.  I remember years ago a lady who did amazing pieces was over the moon when she sold two paintings to a customer but on questioning her she'd done him a ridiculous deal and he'd tapped into her sense of guilt or unworth at pricing her own art.  She was delighted someone had gone wow, I was furious she'd accepted such a low price! 

So back to what's fair to charge.  There are other factors to consider - but most boil down to you almost taking the emotion out of this question.  That's incredibly hard for most to do, we make our work because we are passionate about what we do and want to be fair but we also need to be recompensed when we sell.  If you really struggle, ask a friend to advise what they think is fair.

Also, on the subject of pricing check when you do markets and fairs to see if you can identify which camp other makers sit in by their pricing.  If they seem more expensive than others then they are most likely to be a business model and need to pay their mortgage from profits.  Hobby makers are often cheaper as only tend to care about recouping materials and a little extra to be able to keep making.  Depending on which camp you fall may affect which markets you want to attend in future.  For example if you are a silver jewellery maker who wants to pay the mortgage you will have a hard time competing on price with the person next to you selling a lot cheaper because they just need to recover costs.  Again, both models are perfectly valid but depending on where you are may affect which markets you wish to attend in future due to the expectation of those attending as visitors.  Markets can also be a useful place to attend as a visitor to see what others are charging? Are customers buying? What questions are they asking of the seller / maker? 

And ultimately, you are the seller so you can change your prices as and when you want to but don't be in a rush to discount things too hastily unless you want to have a massive declutter of old stock (the old adage of stock is dead money is true!).  

Capacity - the hidden curse of the small trader (and how to resolve it!)

This is something that is increasingly cropping up in conversations from those looking to set up a shop or small business, and in the past, I have run this capacity question as a workshop for startups as it's a hidden issue that we don't always think about until it's too late.  I regularly have chats with folk bouncing away telling me their grand ideas but on digging a little deeper they have often not fully understood how much time they need and may not have the time to achieve their fabulous idea so we need to tweak it a little.  I primarly worked with hand crafters, artisans and makers so while the basic principles are always the same if you use wholesalers and resell items the capacity to make may not apply.

To give you an example of the capacity issue - let's make up Lucy the cake maker who wants to set up a cake shop.  She can bake amazingly well, absolutely no issue with her products; she has all her food hygiene certificates, her FaceBook fans adore her work and she's ready to turn her current hobby into a business .... BUT her capacity needs to be considered.

For any small business start-up you must know your numbers, here's a basic breakdown of the initial key things:

1. What do you need to bring in to SURVIVE 

You are a start up, survival is the aim of the game, we can get to growth and maturity later but right now we need to know the mortgage and electricity are paid! Add up all the essential regular household bills; go through your bank statement and note them down.  Remember to check any subscriptions you may have too that go out quartly or yearly.  Amazon Prime is an excellent example of a sneaky sudden bill you haven't factored in.  Now divide that by 52 - as a start up it's easier to work weekly.  Then add a contingency of 15% onto it - you will be amazed what has been left off that thorough list you made! You have to imagine you haven't made a single thing so what costs does your household incur? 

1.  TIME AVAILABLE TO WORK OR YOUR CAPACITY

How many hours can you realistically work at your business - you need to sleep, take small people to school, visit your Mum and see your friends from time to time. If it helps keep a little calendar check of your schedule for a week and then work out the hours you do have or could make available.

Don't assume you have 52 weeks either, if you have family you will to need to factor in school holidays, family holidays, add in time to look after a sick child and always factor in a few duvet days - you're working for yourself, not becoming a workhorse! And if you can work weekends great, but be realistic.  Allow that downtime to go see a film or drinks with your friends.

I get people to print off a year planner and with a marker pen rub out all the days you are not available like your partner's birthday because you always do something special, or Sundays because that's when you visit your parents.  Work out exactly how many full days you think are sensible given your personal circumstances (they will vary enormously person to person).

2.  TIME TO MAKE EACH ITEM

How long does it take you to make each item - if you batch make something then work out a time for 10 or 20 perhaps but as long as you know for example 50 cakes = 2 hours from start to completion.  So you now know that each hour you can work, you can make 25 cakes.

2.  GROSS PROFIT

Now you need to work out how much profit you have after selling your work - ignore the time for the minute, just deduct materials cost from selling price. These are classed as your variable costs as they vary depending on how many cakes you make. It's simple when you think about it; more cakes = more flour you have to buy.  Remember to include packaging! (this is considered your gross profit - net profit is when you take off rent too but we'll worry about that another day)

You now have your four basic figures to work out if you can survive, here's the basic maths:

1.  Use the time per item and see how many you can make in your available time, we know 1 hour makes 25 cakes and if you can work 6 hours you can make 150 cakes

2.  Now multiply that number by your profit per item - again, if your cakes have a profit of £1 per cake you have £150 profit per baking day

3.  Does that £150 per day multiplied by your capacity days available cover what you need to survive?

4.  If yes, fantastic; if no, then what can we change?  

I have often been accused of being too commercial in my approach in the past towards the small craft or artisan business but the reason is you do not start with the intention of making a loss! And without knowing your cost base (revenue and gross profit) and time (capacity) you may well accidentally end up there.  Many crafters have no intention of turning it into a business and it's used to top up a wage or pay for holidays which is fine, BUT if you want it as a real business paying your mortgage and bills you do need to keep an eye on the costs and your time. 

If you end up with a situation where you realise you cannot produce enough to cover your required income then look to diversify.  What costs can you cut, can you create passive income from recipes online that people can pay and download off your website? Can a friend help do the deliveries to free you up to bake? Can you supply local cafes or do office lunch provision to build a customer base rather than the massive outlay of a store until you know exactly what's working for you?

Capacity is the hidden curse of the small maker - we are required to be all things at the beginning phase and everything needs doing at the same time.  We have to be the maker, the accountant, the advertiser, the brand, attend events - the list is endless and can seem daunting so be sensible.  Which activities use your time and generate returns? Admittedly in the beginning there won't be masses coming back as you build your portfolio, your brand, your customers, etc etc but join networking groups as it can also be incredibly lonely especially when you have to present to the world as happy and bouncy while going eekkkk not sure I can pay the mortgage this month.

I appreciate this is a very basic and simplistic start to a much bigger and more complex situation.  However, it's a start and if you can arrive at some basic figures you will at least have a better idea of where you actually are.  I appreciate that your working day also includes paper work, promoting, attending events, collecting supplies and an ever ongoing list - BUT once you recognise that ongoing list you can become savvy with your time management.  Take the cake maker - once the oven is on she has time to do other things.  You have to make time and money your friends.  And I know that this is just the possible income, not the actual but we'll look at sales, promotion, how to price and so on later.  First you need to know where your survival point (or break even) is.  It will also help to know if you ever go to ask someone for a loan to be able to say exactly where you are, this gives people confidence that you are self aware of things.

And finally, please please enjoy what you do - you started this journey because you're passionate about what you do so even if things feel a little bleak somedays just remember why you started out.

Body Dysmorphia - and what's going on inside our heads

As I'm now quite open about this cruel illness stealing so much of my time I do get quite a few messages saying help; my daughter struggles or I don't know how to help my friend so I thought I'd start logging down some of the useful things I've passed along in the past.  My story is that I stop eating, I shut down completely and the fridge is a basic no fly zone, others over eat but I basically starve myself. These are just blogs about how I remember it, what helped me, the conversations with others over the years about how they coped too.

Please do not take this as medical advice, IF someone is critically ill or at serious risk of self harm then please do call your local emergency services.  These comments are purely my thoughts on how folk wanted to help me when I was poorly and how I developed coping strategies to help let them into my world a little.  They may help, they may not but they might at least start a conversation going.  Or, maybe just send them a link to this blog and allow them to contact me directly if and when they want to.

Body dysmorphia is way more than seeing a pretty dress and going ahh but it looks great on the model cause she's tall and I'm short so it won't hang right on me.  It's way more than eek I ate too much cake and my jeans feel a bit tight.  It's ingrained so deeply in us that if we somehow catch sight of our image we'll turn to stone in morbid fear of what we will see.  That image must never be relayed back to us through mirrors, shop windows, bus stop shelters or parked car windows.  Reflective surfaces become like demons to us, like the sun is to a vampire and we can spot and avoid at 100 paces.  We wear glasses and hats to shield our eyes from accidentally seeing an image that got through our high shields.  It's way more than just feeling fat and almost doing the I feel fat so folk will give us compliments and the no, you look fab just as you are.  In fact we won't even discuss it with you, at all, nadda, zip, it doesn't exist - and if it doesn't exist in anyone's consciousness we can remain hidden in plain sight. That suits us just fine thank you very much!

BUT we know it's happening, we are not unaware of it, we are almost powerless to control it.  It is a mental health issue, it is NOT a vanity thing.  It is not a but I want to look good in a bikini this holiday thing, it is an all consuming daily battle within our own head and the noise is constant.  There is no off switch, we know we need to find that off switch but daily survival is the first thing.

So, to help - we don't want to talk to you.  You mean well, you love us, we know that.  We know you worry and want to help BUT we don't want your pity, we know that look! So, we will deflect and distract, we're masters at it, we can hide food and what we have or haven't eaten so you think you're hidden agenda question will get through our shields?!? Haha love the optimism! 

So, we don't want to openly talk to you BUT we do need you, so leave little post it notes around going 'hi, I couldn't finish the bagels today so left it in the fridge, have a good day!' that's non threatening. That's not saying oii I'm watching what you've eaten today, that's a hey you'll be helping me out so you sort of take the pressure off us a little.  We also need time to decide what we want to tell you, how much and when.  We're aware of what's going on and judge ourselves so harshly we sure don't need anyone else's judgement too! 

Also, unless you have walked this path I'm sorry but it's very hard to really know what's going on in their head - this is not something that began last Tuesday, this is something that began a long time ago and has had time to embed and get deep into their soul.  In the same way it takes a large ocean liner a long time to turn around this isn't a quick fix and in many ways never truly leaves so don't be in any hurry.  Pull up a chair and a good book and just listen out for our odd throwaway comments because they're not, they're us judging your reaction.  We can pass it off as a throwaway comment depending on the reaction we get. You can't help judge, you can't help apply your own understanding to this situation and especially if it's a close family member you want to do everything to help.  And harsh as this may sound, be aware that sadly somehow you may actually be mixed up in their reasoning or their history so sometimes it's easier to involve a friend with less emotional investment.

Another simple help strategy, just leave cookies lying around - especially if they are broken ones.  If we bite into a whole one you know we have, broken pieces are less likely to be noticed so we can just nibble without you necessarily knowing we have.

Will continue to update this as I remember things, but again, this is personal anecdotal evidence and not based in medical expertise so please take it in the way it is intended,

Have fun, Pixie x