That’s the Way the Cookie Crumbles??

Shelley and I believe so strongly in our mantra of “no starving artists” that we take it literally when we speak publicly. We feed our audience cookies!

When we started down this path, we spoke with our good friend, Flo – an exceptional baker and home-chef.  She offered to create a prototype cookie for us that would not only taste great but could also operate as an edible business card.

After lots of experimentation, Flo shared her product with us.  We were thrilled with the taste and the look. These cookies screamed the professionalism we were after.

The next step was to figure out the cost to S2 Seminars for all this yummy goodness.  Flo agreed to let us walk her through our maker pricing process to arrive at what she should charge per cookie.

Here are the steps we used for Flo and the cookies.

Step One:  Figure out the material costs to produce a batch of cookies. 

How much were the ingredients and the packaging to produce a dozen final-product cookies?  Taking into account the cookie and icing ingredients, the plastic sleeves and the ribbon, and any spoilage, Flo used her receipts to calculate that 12 finished-product-worthy cookies could be produced for around $9.

Note 1: Flo defined spoilage as cookies where the royal icing surface was not level or flat, the edges were too brown, the bottoms too dark, the icing letters smudged, etc.  She felt roughly 9 in every 12 cookies she produced were acceptable to represent S2. This meant each batch had to contain a minimum of 16 cookies to make sure she got a full dozen of her final product.

Note 2: For those with an accounting bend reading this blog, please know we purposefully kept this story simple. If Flo were going to make and bake full time, then we would definitely need to expand our pricing process to include sunk and operating costs and possibly some amortization too.

Step Two: Figure out the cost of labour required to bake, ice and package a batch of cookies. 

Including shopping and cooking time, Flo estimated the labour was around two hours per dozen worthy cookies.  She did feel her labour estimate would become lower over time once she developed a production system  but for now, this was the number.

In Alberta where we live, minimum wage was $13.60 when she was producing the cookies.  Multiplying two hours times $13.60 gave us $27.20 for the cost of labour.

Step Three:  Figure out the price to charge per cookie.

Now we knew the ingredient and packaging costs and the labour costs.  It was time to do some more math and figure out the price per individual cookie.

Herein lay the crux of the problem.  S2 Seminars had a budget of $1.50 a cookie.  $3.02 per cookie was more than double!  To get the price per cookie to meet our budget, it meant the material costs, labour costs or both needed to shrink.

Flo looked at her material costs and decided that, with our mutual eye to a quality product, there was not much that could be done to get the cost lower.  Next, she determined that meeting the goal of $1.50 per cookie would mean she’d only be able to charge $4.50 per hour until her systems were in place.  This put a lot of pressure on those systems to become ultra efficient so her labour rate could reach the minimum wage per hour target. Her chances of success were extremely low.

We then came to the mutual conclusion.  Although we all loved the finished product, it was cost prohibitive for either of us to pursue further.  We sure had fun finishing up the prototype cookies though!

If you’re a maker and struggling with setting your price, write us and we’ll write back.

Shelley Goldbeck and Susan Cramer
www.S2Seminars.ca

S2 Seminars, Grow Exponentially – use both sides of your brain!, is a partnership between Shelley Goldbeck and Susan Cramer. To learn more about running your small business, contact us today.

 

 

Life Happens

At S2 Seminars we believe in planning, attention to detail and doing excellent work.

But the best laid plans can go awry.

We also believe family comes first.

A death in the family has changed our plans.

We reluctantly made the recent decision to postpone our first workshop of 2018.

We’ve rescheduled 3 Must-Have Tools to Market Yourself on a Shoestring Budget for February 13, 2018.

Perhaps with New Year preparations out of the way, February 13 is a good date for you to join us.

We will help you create a business card and show you how to use it. We will build a Facebook page and you’ll leave with a plan to use it in your marketing mix. We will also help you plan your web site and give you tips for using it effectively.

If you’ve resolved to focus on your art business this year, you don’t want to miss this opportunity.


S2 Seminars, Eradicating Poverty in Artists by Teaching Business Skills, is a partnership between Shelley Goldbeck and Susan Cramer. To learn more about running your small business, attend our workshop, 3 Must-Have Tools to Market Yourself on a Shoe-String Budget.

What is My Art Worth, Anyway?

That’s the million dollar question!

Plato was right: beauty lies in the eyes of the beholder.

There are Picassos, that in certain parts of the world, wouldn’t fetch five bucks, yet the experts agree they’re worth millions.

Because somebody, somewhere, is willing to pay that. They want it badly enough.

THAT is the worth of art.

And that’s what makes it so darn hard to price.

At S2 Seminars, we’ve noticed artists either charge nothing or next to nothing. Or they think too much of their own work, price it in the Picasso-range and wonder why they starve!

Finding the sweet spot is the trick.

Here are five basic art pricing tips:

1: Determine your art. What is your art? Define it. How do you categorize it? Is it similar to other art?  (Of course, you’re unique, but find some similarities.) Does it have a genre?

2: Find and follow your peers. Who makes similar art? Who is in their market? Is that your market? Where do they sell their art? Do they sell locally, regionally, nationally or internationally?

3: What do they charge? These similar artists’ prices will be good launching pads for calculating what you should charge for your art. Do you have similar education, years of experience, style, customer, etc? Examine each similarity and difference to find your price.

4: Pick a Price. How much do you need? Let’s say you want to make $40,000 per year to cover your costs, expenses and have a meal out once a month (slightly over the poverty line!) You determine you can charge $2000 for each piece of your art. Therefore, you need to sell 20 pieces per year. That’s just over 1.5 per month. Now you need a plan. How will you sell two pieces per month?

5. Test. Test. Test.  Once you’ve found a price that feels right, test it with your customers. If nothing sells, it’s too high. Think of it like putting your house on the market. The real value of an agent is in pricing your house so you get the most money in as little time possible.

Whether you’re a painter, sculptor, writer, musician or singer, knowing the value of your art is key to making a living from your art business.

Pricing your product is just one of the business skills you’ll learn from S2 Seminars. To check out our latest workshop visit our Events page.

Shelley Goldbeck, 
www.S2Seminars.ca

 

Shelley Goldbeck, DTM is a partner with Susan Cramer in S2 Seminars, Eradicating Poverty in Artists by Teaching Business Skills.