I recently read — and wrote about on TOTS — a discouraging article that said I could do little beyond supporting a hobby with my so-called “craft business”. This thought really stuck in my head; was it true? I worried and worried about it before it hit me; how about trying a little math to see what it would take to make a living with my business.
First, let me clarify that I am not really looking to “make a living” by most standards. I’m looking to earn part of a living, if you will — enough so that my husband can work part-time and also start his own enterprises. So that’s the number I aimed at, roughly. For the sake of example, let’s say I want to gross $30,000 a year from my shop.
Realization: I could not make $30,000 annually from my shop if $30,000 worth of merchandise did not pass through it in a year.
There are many other hurdles, but that’s the first. It seems so obvious now, but I really did not see it in those terms before. So the first thing was to figure out how much I would have to produce.
I ran the numbers for several of my products, but for the sake of example, I’ll go with coffee cozies. At my current prices (which are somewhat experimental), I would need 3,000 coffee cozies at retail cost or 6,000 at wholesale. I’m hoping/expecting to do some of both.
Holy Toledo, that’s a lot of coffee cozies!
I broke it down, though. I looked at how many hours per week I thought I could reasonably hope to spend sewing, and came up with 832 hours; 4 hours a day, 4 days a week. That would mean producing 4-7 coffee cozies for each of those hours…more than I do now, but not, I think, out of reach.
Whew—was that reassuring.
My prices are fairly likely to fluctuate a little as I search for that perfect price, so the numbers will change a bit, too. Because of that, it’s also helpful to think in terms of value that I need to add to my shop each week — about $600 to keep up with the $30000 goal (more if the total overall value goes down with price adjustment).
The awesome thing is that having a figure like that is incredibly freeing. Until now, I’ve always just told myself to work as hard as I could, as much as I could. Now there is a point at which I can be satisfied. I will make more when I can, because some of the “value” I am adding is in made-to-order listings. When someone places those orders, I will be working my tail off without adding value to my shop. Still, I think there will be times now that I can say, “I’ve completed my work for the moment.” Awesome. 😀
Now, there is probably some fancy term for all this figuring, and I don’t know it. There are some variables that I haven’t gone into and probably some I haven’t thought of. This is probably something I was advised to do from the beginning, but just didn’t understand. I share it in hopes that my amateur way of looking at things can help someone else out as well. Good luck. 🙂