So you’ve been selling your wares quite well, but aren’t really sure your pricing’s quite right, you don’t seem to have much money left over to buy more supplies, as well as pay for your next market stall or online fees. If this is the case, you may need to spend some time running numbers & planning for a price increase.
Being in charge of your own money, having a seperate account for your venture, knowing your costs & cashflow is super important.
Time to get past the phrases; “I’m not good with money” “I don’t look after our money my husband does.”
If this is the case, let me stress how important it is that you’re in charge of your own finances when it comes to this area of your life, if you’re truly going to make this work, earn an income from doing what you love you’re going to have to understand and take control of money matters.
“But I don’t need to make money from doing this, my husband earns enough to cover our living expenses”.
If you hear yourself saying this, then you’ve got to ask yourself whether or not you want to continue working on your craft as a hobby or an income stream?
If you seriously want to get a return on the investment you’re putting in to doing something you love, while enjoying the empowerment that comes from knowing the money earned through this venture is because of your efforts, then, you need to take the money side of this very seriously.
Ever considered what’d happen if something tragic happened to your husband, how you’d move forward in life? What if you out live your husband by another 30 years? You will need to have some idea about how to manage your money.
Not to mention, that having a venture of your own could very well be what keeps you living with purpose after such tragedy. I know it’s not a nice thought, but it’s a realistic thought.
There are no guarantees in life, establishing yourself as a capable independent working female is more valuable than simply how much money you could make, it’ll give you a sense of empowerment that can only come from taking charge of your own future prospects.
In the book I recommend all women read ‘The latte factor’ by David Bach, he shares statistics, such as:
- women live on average about seven years longer than men
- half of all marriages end in divorce
- the odds are strong that any given woman will end up spending her ‘golden years’ on her own.
- 80 percent of married men died married
- 80 percent of married women died widowed!
- Four out five widows living in poverty were not poor… until their husbands died.
Starting with something as small & simple as working towards earning an income from doing something you love will have so many more benefits than simply making a little extra cash for you & your family to enjoy.
Learning to look after money for your venture will be empowering on so many levels.
HERE ARE A FEW TIPS TO GET YOU STARTED:
Allocate time to in your schedule… once a month, check you’re on track and plan steps moving forward. Use this day to plan for purchasing supplies, looking over pricing structures, as well as entering receipts in preparation for tax time.
This makes the task so much for manageable & less overwhelming than leaving it all to the end of financial year.
By setting yourself a dedicated day in your schedule you’re mentally preparing yourself to complete a task that’s not only necessary to stay on top of, it’s one you’ll likely set aside easily as it’s not much fun.
Sticking to your schedule will mean you’ll have a better understanding of where you’re really at on the money front, and you may even start to enjoy it, as you start to see your money grow and opportunities increase… because of the work you’ve put in.
Behaving like the business you want to become is a great foundation building process.
Put into practice habits & systems that’ll be required when your venture is bigger, right from the beginning, then it won’t be so overwhelming when it does grow and you won’t be making decisions on a hunch you’ll be making them on facts & figures.
Work out an hourly rate, based on how many hours you wish to work, how many weeks you wish to have off from this job & allocate this rate to the production of your products.
Recording exactly how long it takes you to make something is important, I usually do this after making something three times, as I’ve a better idea then of what’s required to complete the task, less time goes into ironing out the wrinkles.
Ofcourse as I continue to make this same product, become more efficient, that doesn’t mean I reduce the rate on making it after creating 25 or 50… by this stage I may be wanting to pay someone else to make part of that product so I still need to be able to cover the cost of labour.
Also don’t forget or dismiss the importance of including profit, if you only cover costs, you’ll not be able to sustain your venture, let alone grow it.
I’m not going to go too deeply into this right now, but just want to stress the importance of thinking about pricing. Especially, if you’re serious about trying to earn an income from doing what you love.
Keep in mind that if you set the price too low you’ll create an unsustainable business, set the price too high for the skills & experience you have, you’ll potentially destroy your reputation and opportunity for repeat business.
You can always increase prices as your skills, experience & overheads increase. When I moved my operation into a commercial space, my overheads increased significantly. So I slowly increased my pricing and have still had returning customers come back to purchase more without hesitation.
The fact I’m more accessible, have regular weekly hours, they can now come in to see my work being created right before their eyes justifies my pricing increase.
Budgeting for growth
Earlier I mentioned including profit into your prices, but when you’re first starting out, have a limited funds available to start, allocating a set amount to put towards your venture helps set boundaries around what you will & won’t do.
When I first started my artisanal brand I did so with a budget of ‘X’ – back then this was based on what it’d cost for a day of daycare, for our youngest child. After enrolling him and not being able to go through with it, I decided to use the amount it would’ve cost us for one day, to fund the building of my brand.
I wasn’t working else where and had wound up my photography business, but really wanted to earn an income doing something I loved that I could truly do working from home with my new little one in tow.
By doing this I was strict on how I’d spend that money, for example, should I pay for advertising or put that money towards supplies needed to make the goods?
Of course it makes more sense to put the money towards supplies, there was no use paying for advertising if I didn’t have goods to sell. But I still needed to find a ways to promote and sell my work. There’s also no use having goods lying around because I’m not putting them in front potential customers.
When it came to promoting my work in those very early stages I got savvy, did things outside the box, like host an open studio & launch of a new collection in my home.
Invited friends & asked them to bring a friend, we had sparkling wine & canapés, set up a little market stall display in our back garden, did a little introductory speech, tour of my studio, answered questions relating to the process, then sold items on site.
A more recent example of opting to be resourceful in promoting our business is, instead of taking out a big advertisement in a glossy magazine (that recently featured our rural town) I’ve asked exisiting returning customers whom I love to serve and hang out with, if I could take a portrait of them (using my photography skills) with some of the products they’ve purchased from Creators Nest.
Then had them write a testimonial on what they love about Creators Nest. You’ll see these on the front page of our website, as customer features in our newsletter and on social feeds.
What this does is celebrate our customers… if it weren’t for them we wouldn’t have a business!
Our customers then also become our promoters, sharing their portrait with their networks who are most likely going to be potential customers of Creators Nest.
This is only a fairly new promotion, but it can be an ongoing, as we have numerous other returning customers we can approach & feature.
There are activities referred to through out this article, but I’ll recap them here:
- Open an account just for your venture, it could just be a no fee account like those ING offer. It doesn’t have to be a business account, it can just be in your name (& your husband’s of you wish him to have access if needed). But, keep in mind it should be an account that you manage yourself.
- Set up a system where you keep track of how much money you have coming in and how much you have going out. A spread sheet which starts with your bank balance and predicted future costs, like market stall fees & supplies… all takings – every time you make a sale add the revenue to your spreadsheet. If you’re not familiar with creating electronic spreadsheets you can always go back to good on fashion pencil & paper. Draw up a grid on a double page spread, across the top with the date of each week, down the side list your income & expenses. Manually calculate each week’s balance as things change, adding your purchases and your takings. Doing this in pencil makes it easier to adjust figures as required. SAMPLE TABLE & SPREADSHEET
- Work out your hourly rate & profit margins.
- Set yourself a working budget. How much can you allocate to your venture each week, set up an automatic transfer for this amount into your dedicated account so that you can use it as needed or save for bigger purchases.
- Brainstorm how you can be savvy with your promotions & save money in this area using your skills and circle of supportive friends.
I can’t stress enough how important it is for your to take charge of your money, for your venture… not mention how empowering it is.
Next time we’ll look at using markets for marketing… making sales on the day’s important, but markets are also a great opportunity to promote you work, build your brand & a following.
Looking forward to soaring alongside of you!
PS. Book recommendation: “The latte factor.” By David Bach
Want to catch up on what you’ve missed out on so far.
Here’s a list of the previous posts:
- Want to start your own artisanal business but don’t know where to begin?
- What’s Branding & why it’s important for a small artisanal business.
- Who do you want to see too & where will you find them?
- Artisans live stories customers aspire to being a part of…
- Not sure how to go about sharing your story
- Life’s already so full… how will you fit in realising your own dreams?