Finding the Right Price For Your Created Items: Overhead

When you're pricing your created items for sale it's about more than just the item - it's a very wholistic thing and it's important to include all relevant costs. This is also why it's important to work to keep these costs down. Even with a fabulously low cost of goods and a realistic understanding of your own time and contribution, if your overhead is too high you will be unable to make enough money to pursue being an artist full time.

Overhead refers to the ongoing business expenses not directly attributed to creating a product or service. It is important for budgeting purposes but also for determining how much a company must charge for its products or services to make a profit. In short, overhead is any expense incurred to support the business while not being directly related to a specific product or service.

This is how Investopedia explains Overhead, and I encourage you to click on the quote to go read the article this explanation is from. It's important to understand what it is so that you can move forward with your dream of being a full time independent artist while making choices that will help set you up for success.

Tip #1 - Bills have to be paid

I know this seems obvious, but because bills have to be paid, it's important to be very careful and intentional about what bills you take on. Your vision of yourself as an artist might be of you in a large loft studio surrounded by stacks of canvases and piles of supplies. Before you sign the lease on that loft, remind yourself that bills have to be paid. If you do sign the lease - that becomes part of your overhead. If you can create your art in an area of your home, it might be best to start there and leave the loft studio as part of the dream you're working towards.

This is the same with everything. Be very careful when researching the best way to get a business phone number, a website, and every aspect of the business you are building. It's not bad or wrong to invest in some aspect of your presence, or to be extra in something important.

Tip #2 - Choose your investments wisely

Personally, I chose Google Voice for my phone number that forwards to my cell phone. I invested in business cards from moo.com that present the public image I want to have. I was able to have my logo on one side of the square card and the information about how to find me in person and online on the other side in several colors. I love being able to ask someone what their favorite color is and then giving them my card in that color. It's that extra special engagement that leaves an impression.

I chose Wix for my website because of the built in e-commerce, and the ability to use the point of sale through my phone for in person sales. This allows me to keep on top of my inventory, and the reporting for my sales. The fees are very reasonable, and while there is a very real learning curve, it's been very user friendly. When I'm at an Arts Market and processing a sale, I can have the payment device in my backpack pocket and do everything through my phone. It was also one of the mid range to lower costs for a site.

If you aren't sure about some of the decisions you need to make, there's no need to guess. Ask your circle of friends if anyone has experience, look for reviews, call and ask the company you're considering some questions. I learned a whole lot about Point of Sale options while managing the Boutique. When I was finally allowed to get the system that I wanted and that worked for retail my life became so much easier. I would encourage you to take your time, try the free trial period before signing on the line, and make sure you're happy with your choice.

If you are able, consider looking into paying for a year up front. If you aren't sure about the choice, go month to month. But when you are sure, you can sometimes save a lot of money by paying up front. This also means you don't have to come up with the payment every month and you can take a year to save up slowly for the renewal.

Tip #3 - Make it personal, even if you have to make it cheap

You're an artist, so do your thing. Once you figure out the expenses that are most important for you, and you figure out the things you just don't have the money for today, find ways to make it work. If you can't afford the business cards you want, why not try a hand scripted personal card. You can also create a QR code with a link to your website. If you're giving your card to someone, simply have them scan your QR code with their phone.

Whenever possible, keep your business name consistent across platforms. My website is Adorned by Crystal. So is my Facebook business page and my Instagram business page, etc. That's what's on my sign at the Markets I participate in. I will soon be ordering a banner, but it was faster and less expensive to get a sign printed. That wasn't as important to me as the impression my business cards make.

Tip #4 - Know your limits

The more you can investigate and consider in advance, the better. The goal is to keep your overhead as low as possible, so if you hit your monthly spending limit, it's time to stop and wait until you're in a position to increase the limit.

You can always consider taking out a business loan to invest in start up costs, but that loan repayment becomes part of your overhead. the last thing you want to do when you're ready to launch out on your own, is to put yourself in a position to need a job to cover your overhead. It is very possible to foster a high end presence without spending high end dollars, and sometimes people spend high end dollars without achieving that high end presence.

Tip #5 - Seek out mentors

If you don't know what choices to make, find some people to ask. I have been very grateful to get feedback on different platforms from friends who have used them - especially those who have used multiple platforms and could compare and contrast them for me. I am very grateful to be connecting with other artists who are selling through the markets and are willing to share resources, let each other know about other markets to check out, even willing to give constructive feedback on display from the perspective of another artist. I'm not naive to image everyone out there has positive intentions, but when meet those who do, I'm very grateful. When the feedback I'm getting is confirmation of what I've been thinking might need to change, I'm grateful.

You can find online groups, in person groups, professional and network meetings. Look for content creators on any of the social media platforms and learn everything you can. The goal is to make it all your own, and do your own thing, but no one said you have to reinvent the wheel. Build your business on the foundation others have helped to lay down for you.

If you really need it, figure out a way

At the end of the day you are going to have to do what you need to do. If you only want to sell in person then you probably don't need a website. If you want to sell online, maybe you can look into selling directly through Instagram or Facebook business pages using PayPal or Square. I did that for awhile. Or selling things with payments going directly to you through PayPal, or Venmo, or wherever you have cash pay set up.

You can get started with very little overhead. If you need to take on a charge to move forward, trust that you are at that place because you're growing and it's time. In personal and professional choices if you can develop the skills to walk the frugal side of things without sliding into being cheap, that's an amazing skill to have!

You also want to know where not to be cheap. If you have no idea how to file your taxes, find a qualified accountant. If you have no idea how to do anything vital - either genuinely pursue getting the skills, or find someone qualified to do it for you. Some things you don't want to risk messing up, because they cost way more to clean up than to just find a way to do correctly. If you aren't sure, find out. If you don't know, ask.

Tomorrow it's time to look at those formulas and put it all together.