Tuesday, November 02, 2010

Craft Business: When To Get Out or Hire it Out

Different aspects of business make me think carefully about how much my time is worth, and whether or not I should spend time on any particular thing. I think you should be just as careful with your time.

  • If you sell your soaps at a farmer's market, calculate how much money you are bringing in per hour, and ask yourself if it's worth it. I recently decided not to return next year to one particular market. Too many days had returned too few dollars, and this was the second year we gave the market a chance. Forget it!
  • If you make your own products, figure out how many products you can make in one hour, and then price that out at retail. Then ask yourself if it's worth it to hire someone else to make them for you, or to help you make them. Example: I can make 168 bars of soap in about 2 hours. Sold at full retail, that's $924 worth of product in 2 hours, or $462 in an hour. Would it make sense to hire someone at $10/hour to make the soap for me, so I can focus on other aspects of the business? How much more work could get done around here if I wasn't making soap?
  • If you sell your products at craft fairs, carefully consider the rent. If you pay $200 in rent, and you only bring in $500, and the fair lasted two whole days, is it really worth it?
  • Even better--what about a small craft fair that only wants to charge you $25? Or 5-10% of your earnings? Let's pretend you agree to it. You must add up all the time it takes you to make the stuff, pack up the stuff, load your car, drive there, unload your car, set up the stuff, and sit there, vending. Then when the fair is done, reverse the whole process. Even if the fair charged you a minimal fee, you have invested a LOT of time and effort into it. This year, I am foregoing attendance in a very small fair, because of this very thing. My time is just too valuable to take chances like this anymore. I do one big craft fair that has reasonable rent, and always gives me a good return on my investment.
  • Every year I swear to myself that I'm going to hire an accountant. But then every year, my TurboTax auto-renews, and I do it myself, anyway. I've got a system, I figure. It doesn't take that long, and I never really have the however-much money it would take to hire someone. Should I stop doing it myself?
What parts of your business have you realized you should give up? What parts will you never give up?

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