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.

 

 

A Sweet Business Plan for Success

“Business Plan!”

Did you cringe?

Many people cringe at the mere mention of a business plan, especially if they prefer to live in their right-brain over their left-brain. Of course most of us use both sides of our brains — some appear to use neither side! — but we all resonate more with one side or the other. (See our previous blog, Right-Brain, Left-Brain.)

Business plans live in the left or logical side of our brains. For those who prefer to use right-brain skills, a business plan can seem daunting.

At S2 Seminars, we realized we could help right-brain thinkers if we could find a way to translate some of the business plan “code” into language more suitable to the way they think.

Drumroll please…. enter the S2 Seminars Honeycomb Business Plan Model!

The honeycomb is symbolic of the industrious bee, his propensity to work in teams, yet able to work independently, and his sweet, Return on Investment (ROI), honey! (No, I’m not getting fresh with you!)

The hexagon shapes in honeycombs fit together in a wide variety of configurations which are conducive to building a plan, especially if  you don’t initially know the order your pieces need to be placed or how many you will need.

We recognized that 80% or more of the content in typical business plans is common to all plans. By starting with these common components, you can develop a plan that works for you.  If others who need to see your plan require more components, simply add them on to what you developed for yourself.  (For reasons to have a business plan, see our blog “Because You’re Worth It).”

Here are the most important components of a business plan.

Basics: Your company name, structure, address, phone, web site, social media, your business description and other introductory information.

Vision: Includes vision, mission and value statements. Why are you doing what you are doing and how will you do it?

Products: What are you selling – products, services or both?

Money: How much do you want to make? How much will you charge? What are your financial projections?

Markets: Who is your customer? Where is your customer? How will you reach your customer? How will you bond with your customer?

People: Who is on your team? What skills do you lack? Who can you hire or barter with for the gaps in your skills? Or, do you get training so you can fill the gap yourself?

Summary: The Executive Summary or overview of everything you’re planning. This is written after the rest of your plan but presented to potential business partners and financiers BEFORE the main plan to entice them to read more.

Writing a business plan is the first step in making a living from your art.

S2 Seminars is pleased to offer a two-day workshop for creative and performing artists called A Sweet Business Plan for Success. We will lead you through all these components in detail, helping you ferret out answers to important questions and flesh out a business plan that works for your goals, whether it’s simply to have a roadmap for business success or to secure funding.

At the end of the two days, you will have a business plan that’s 85 to 100% complete, (depending on its complexity, your ability to provide information and who needs to see it) so you can get on with making money from your art.

For more information, check out our events page.

Shelley Goldbeck, 
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.

 

Vow of Poverty

S Squared Wordmark Green Blue MNHave you ever noticed that your artist friends always seem to be struggling with money?

Have you ever wondered if it’s necessary?

According to the author of this article,  12 New Rules to Become Radically Successful, the myth of the starving artist goes back to Michelangelo.

“We are accustomed to a certain narrative about artists, one that indicates they are barely getting by. But Michelangelo did not suffer or starve for his work. He was a multimillionaire and successful entrepreneur, a “pivotal figure in the transition of creative geniuses from people regarded, and paid, as craftsmen to people accorded a different level of treatment and compensation,” in the words of journalist Frank Bruni.”

Why do artists cling to the poverty myth? Here are my thoughts:

  1. It’s romantic. Getting by, making do, suffering all have their “charms” but in reality, it’s stressful to not know if you can make rent next month.
  2. It’s expected. In some circles if you sell your art for decent money, you’re no more than a prostitute. Funny how everyone expects artists to work for nothing or “exposure” (People die from exposure!) but the janitor, receptionist and all other workers are paid.
  3. It’s comfortable. Success can be scary. It requires work, self-awareness and a number of other character traits. Failure is scary too. There was once a safety tip: “if nobody moves, nobody gets hurt”. If you don’t try, you’re sure not to fall. But think of what you’re missing!

If you’re an artist, struggling to sell your art, consider following S2Seminars.

S Squared Wordmark Blue Green MN

Our goal is to help visual and performing artists get paid for their work. We do that by teaching you basic business skills.

Our first workshop is February 13, 2018.

Learn  more here.