Exercise: Get Comfortable Charging More
this exercise were calling. Get comfortable charging more for your art. But guess what? This is a pricing exercise. Yeah, pricing. All right, So the biggest impact that roadblock number one on your has on your business as the ability to price your work appropriately and confidently. And remember, that's our art school makes you feel guilty about making money. So one of the ways where I really see this happening isn't setting your hourly wage. Here's the thing about being an artist or being a maker is that Labour is often the most expensive piece of the pricing equation. It's often a really big challenge because it takes you a long time to make things, especially when you're first learning. Right. So this is the basic pricing formula. If you've taken any class with me, you've seen this before. Are you as well using this formula now to price your work and it looks a little I want to make you guys be honest, are using it. Not really. Your kind of using it good as a starting point, but I g...
et I get caught up on the labor cost. Okay. All right. So this is the first thing that. I think that. Then the next thing and this is actually brings us to the second half of that question is how much are you currently paying yourself an hour when you're using that? Sure. What do you paying yourself an hour right now? What number I'm gonna make you make you commit to something right now. I might be paying myself maybe, like $15 an hour. Okay, that's and you where you live. I live in the Bay Area. Okay. How much you're paying yourself in 25 where do you live? Also in the Bay Area, right? I don't want to answer that space with lots of people watching you on your theoretically $100. Good. That's it. That's better. That's that's the best number I've heard yet. It's closer to actually. 10. Well, because certain things I do are multiples, like with the greeting cards and think I could do over and over. But I see that when I pink furniture to sell, I probably charge even less than that because I feel like no one will pay the price for the right And where do you live again? Lancaster, Pennsylvania. OK, you at least just a little chai. I'm from right around the corner, so for you, it's a little cheaper to live. But that's still definitely not an ideal price there. So when you're thinking about this equation, it's a really important to remember that here of Labour has value. You have skills and a creative vision, and it's really important that you acknowledge that. So when I was putting together this class, I just started Googling for fun, and I was like, Okay, what's the average hourly rate for a lawyer? Right? So the best guests that I could come up with on Google and I know this range is hugely, but what I came up with was about $55 an hour. But that's what a lawyer gets paid. And here's the thing that you have to remember in order for that lawyer toe earn $55 an hour. Ah, large law firm has to bill at 150 to 259 ball parking This, but let's be real. They're billing you at least that much right an hour in order to pay that lawyer $55 an hour and so that's the other thing to remember with your labor is that you can't just charge what you need to make an hour. You actually need to bring that number up to reflect all of the other stuff that you do that you're never going to get paid for. So what I want you guys to do right now is figure out really How much you need to make an hour approximately to live where you live. Because we have to acknowledge that you live somewhere with a certain cost of living, right. And I want you to double or triple that amount to get to your new hourly wage. We're looking super uncomfortable, so I'm gonna pick on you guys look uncomfortable. It means I'm gonna pick on you just just before warned. So what do you think? You actually need to make an hour. I feel like you were talking about the artist that you recently coached. And, uh, you know, she had these alternate revenue streams to pay for her. And I have an ultimate revenue stream. It's just not related to my art. And I charge an hourly rate, which is really high, and it's nowhere near what I'm charging for the work that I'm producing on my creative work. And so I figured that out for, um, kind of my alternate revenue stream my my career. And right now I charge $150 an hour for my acting work, and that's a livable wage from for me in the Bay area. OK, so And why are you not also charging that for your art? Well, for all the other roadblocks that you talked about, you know, if I feel like the market can't support that. All right, So the first thing that I think is really, really important to remember is that when you don't start with pricing your art that way, you're actually hurting everybody. You're hurting all of the rest of us, right? Because you're devaluing what you're doing. So I want you to take that number $150 an hour, and I want you to write that down right now. Really big, as big as you can. Yeah, and yeah, I can see it from there. That's perfect. So this is your new hourly wage that we're gonna work with for the rest of the day. All right? You're gonna commit to that. How much do you need to make? Well, I don't know. I'm doing. I'm doing the, uh, my, uh, my artful time right now, but I'm not really supporting myself. Um, when I wasn't doing a full time, I was making I think, um, 35. 40 an hour. And I was I was doing fine. Um and so I feel like I'm not fat low, so and reminding What did you say you were calculating at 25. Okay, so so remember, if you really to be doing fine, and I would love for you guys doing more than that, but if you to be doing fine, if you need to make to $40 our that means that you actually need to charge for your labour somewhere. Ever seen, like, 70 and 100 and 20. So what number you gonna write down? I don't know. 100. Perfect. Do it real big. All right. So you're already at 100. Yes, but but but I'm also a graphic designer. Okay, so in Yeah, So in that way, I'm thinking I'm dividing myself into these two. Yes, and like where I'm a graphic designer and I'm an artist. So when I'm a graphic designer, I charge $100 an hour. But when I do my art, I have $1. Now I think something that's so so important to address is that your art it's not any less valuable than your graphic design. No, it's more. Exactly. So you're gonna write down a number that's higher than 100 since you said it was more valuable. So what do you think I'll say 150. All right, perfect. Right down. So, yeah. So this is I think it's saying that is also really important to remember. Is that when you you piece this out, you say, Well, okay, like this. My graphic design work and I'm in charge this and this is my art, but I'm not gonna charge for it. That doesn't help you get to make more of your art. And I'm not saying that spending time in your graphic designer was bad. It's awesome. And it's a great way to make a living. But you're probably here because you want to make more money from your art, right? So, thinking about how you can set that at that value is really key. All right, so 75 because I had a lower starting point, right? Cost of living. Your cost of living is lower, so I think that is, and that is important to acknowledge. But I think knowing where you're from because I'm from the same area anyone in our area who would hear $75 an hour is going well, that's crazy, right? It feel it still feels crazy for our area. And actually, I would say that you putting 75 makes all of their numbers still too low for the record. But I realized that those $100 range numbers felt pretty scary. So we're going Teoh, let them. We're gonna let them go for now. So now that we have that new number, we can start to do the basic pricing formula again. And we're gonna do a hot couple hot seats in a little bit with our in studio audience. You guys can really see how this math works, but I just want to really briefly walk you through this formula in case Hey, you've never taken one of my classes before, or B, you've taken one of my classes and you're still not following this because I've seen that happen more than once because I understand that what happens when you do this number is that usually by the end, you end up with something that feels really scary, right? I can see, like, the fear on everybody's face. So I want to really quickly run through this formula to help you guys. For those of you at home or those you haven't done this before. See how this formula works. So your materials are whatever goes into this particular piece, and you're going to calculate your pricing on a piece by piece basis. Now I want to throw out any rules that you may have heard before, so I've heard things like, Well, for an acrylic painting. It's like X dollars per square inch, right? Throw that one out. We're getting rid of that one. I've heard over jewelry. It's materials times three. Nope. Throw it out because none of those really accurately take into account the labor overhead and profit. That's essential, right? So the materials is whatever it costs to make your peace, then the labor is that new probably scary number that you just wrote down times, however long it takes you to make a piece. So if it takes you minutes, then you had multiply it. You know times that if it takes you three hours, you're gonna multiply times three. Right? So that's how you get that labor charge, then overhead and profit. We're gonna budge a little bit for this one because we can get into that a lot more detail later. And actually, I get into that in way more detail in another class that I created on Creativelive called Make a Living selling what you make. For now we're just gonna ballpark some numbers. So we're just gonna add in. I usually like to do overhead as something that's sort of comparable Teoh my labor charge. So if I'm saying, like $150 for Labour, I might say, OK, well, it takes me three hours. I'm also gonna add in three hours worth of overhead, which is maybe, like, 50 bucks an hour. That would be the cost of like running your business. Does that make sense? You can ballpark it. We're gonna fudge it. We're in the end. We're gonna hopefully get you numbers that cover all of these things, right? And then profit is the money that you need in addition to grow your business. So add on a little extra. If you want to be really aggressive, you can add on a lot extra, but you don't have to add on a ton, because then we're also going to at least not to start, cause I know your numbers are getting scary already feel it. But then we're also going to take our price times at least two. This is really important for a number of different scenarios. So you need to do this if you are, Ah, fine artist, because a gallery is going to sell at this price, right? So they're going to take their cut, which means you make this. If you're making product and you're selling in a store, you know a store is selling here. Here's the thing. If you're selling online rotorcraft show your stores and galleries are not going to want you to undercut them, so you need to be selling at this retail price any time you're selling to the customer. What's nice about that is it means that all of that extra that times too you get as profit when you sell directly to the customer, so it helps boost your profit margin. But if it means a major gallery wants to carry your work or anthropology comes calling, you're still making money at this price makes sense. All right, Now, here's where it gets a little tricky, right? So once you set your new prices, they're gonna scare you. They're going to make you feel so uncomfortable. I understand. I've been there. You need to find proof that supports your new prices, not for your customers, for yourself, right? You need to find the proof so that you can start building that confidence that says, OK, I can charge this. So anyone that's seen me talk about pricing before it's probably seen this image where I basically just went to Neiman Marcus and I search statement necklaces because that's really the thing that I make on. And I found this wonderful example Ah, the the lawn Ron plastic choker. Love it so much. $1950. Ah, not beautiful. That to me is beautiful potential right there. Of what? Someone will pay for something. Now, of course, you don't have to look to a major brand, you can look at other artists. So this is something that I pulled from Michelle Armas, who's a painter. You may have seen her work online, So you're like, OK, she sells her paintings. 709 50. And what do I see down here? Sold out, Sold out. So this is another way to think about this is to look for other people who are out there doing it. What are they charging? See how things air selling. Now, when you're doing this exercise, here's what happens. Gremlins come up and we're going to confront them because I think this is really important. You're gonna find those comp and then you're gonna tell yourself why you could never be there. So when I was working on pricing for my newest necklaces the's big multi stone pieces and I knew where I wanted to be and where I needed to be price rock wise, I was looking for examples. And so one of the things that I looked at was Dylan. Lex, obviously not a maker, but a pretty big brand. Here are statement necklaces. $1000 now sold out, um, $ 8 And you know what? The grown ones happen to Me too. So I was, like, well, off course they can charge that month. Beyonce. War in the formation video, right? Like Beyonce has never worn my work like that. No, it's just it can't work, right? It's OK. It's OK to have those thoughts, but then you have to let them go, right? Okay. Beyonce hasn't worn my work. That doesn't mean that my work isn't also that valuable. Because at the end of the day, what this shows is that there is a market for people online willing to drop this kind of money for a statement necklace. And that's what you need to focus on. So what you can then dio is think about okay. I found the camps. These were the things that are showing me what the potential is. What do I need to do to make my work as valuable as the cops? And this is really now just getting in there and being really strategic. So is it Do you need to improve your website? Do you need to make something that it looks like a place where someone is gonna drop that kind of work. There is definitely a perception that happens when people are on your website, right. If it looks like it was made in 2000 and two, they're gonna feel really uncomfortable trapping a big chunk of change with you. Now, we're not going to get into the specifics of how to build a website here because a there's not enough time and be I actually ready. Did that class. So if this is something that you know, put this on your list, we're going to start to build this list throughout the day of what are the learn herbal skills that you need. And so if you're looking at this and you're immediately thinking, Yeah, you know, I don't think I can stand up to the cops, then put improve my website down, and then you can go back and you can check out the class. It's called beyond etc. You check that out, right? Maybe it's I need to connect with more influencers. All right, So, Beyonce, we're dealing Lex. That's awesome. I don't know Beyonce. We're not friends. I wish we were, but we're not. So okay, who can I look at that would influence my audience in the same way that Beyonce influences all of the millions of people. That fiancee, right? So maybe it's connecting with more influencers. Is it style? Bloggers? Maybe if you're a painter, you make furniture. It's home to core bloggers, right? What can you do to make your work more valuable? And sometimes it's literally just adopting the right mindset. So when I first started telling my work, especially when I first saw her doing trade shows, I had set my prices where they needed to be, because I had some great mentors who basically yelled at me until I did on. But I got to the shows and I was like, It was like, they're like these. Your prices And I was like, Yeah, these were my prices. And then I was like, You know, occasionally someone would buy something and I was like, Okay, these are my prices, all right. These are my prices. My work is worth this. And you know what happened when I went from being like this mousey girl standing in my booth, feeling real awkward to being like this super confident woman who was like, This is my price people stop questioning me on my prices literally. Just because I changed my mind set about the value of them.