***CONTENT WARNING: Light Language***
Pricing your creative products take a lot of diligence to track time and materials. Valerie talks through 3 worksheets that she uses to account for her product costs.
*The Overhead Worksheet
Work Space / Studio Space expenses (electric, water/waste, etc.)
*The Hourly Labor Rate Worksheet
How many hours you plan to work in one year, broken down around holidays, vacation, and sick days. And account for business / administrative operation time vs. "CREATION" time vs. show / sale days vs. correspondence / communication. And track your time, as well as what area of your business you are spending that time on, to get a better idea if you are on track with your goals, over, or under.
*The Pricing Equation Worksheet
Using the overhead and hourly labor worksheet to calculate individual product prices. It's important to time how long it takes to make your products, so time however long it takes to make multiple and find an average time. And consider your material cost fluctuation and other expenses (like shipping & handling materials IN, and shipping final products to the customer) - note the date you purchase, where you purchased them, the item numbers/IDs, and other relevant information.
On another topic, plan out answers to a variety of questions you may receive and feel "on the spot". Plan for "can I have a discount". Plan for "quantity discounts". Plan for industry demand, increasing your prices, and justifying "why does it cost more now". Plan your guidelines for donations and other community support requests. And stick to your rules!
We recommend finding a colleague or two to connect with and discuss your pricing and business structures, as we can grow stronger together. If you are a creative professional, take the time to do this process, whether you follow Valerie's format or create one of your own.