Pricing 101 (AKA Kadie's Pricing Exposé)

When I first started my photography company back in the day I just pulled some random numbers out of the air to charge people because they sounded  reasonable.  The problem was that there was nothing behind those numbers except hot air.

Years went by and I kept making up numbers, some of which were even based off of peer pricing rates I saw in my local area.  The problem with just basing my pricing solely off of what other people around me were charging was that I still didn't know what was behind those numbers or if my peers had even put any thought into what was behind THEIR numbers to begin with.

It's like going along with some craze diet plan because a bunch of other people you know are doing it so it must be ok.  You have to check into the facts, the nutrition and the science behind what you are doing for yourself because you can't take it for granted that your friends already have.

After years of just going with the flow I decided one day to really dig down deep and examine my pricing.  It wasn't fun, I'm an art student not a math genius so spending that much time with my calculator wasn't exactly my idea of the ideal day.  However, at the end of my examination I found out that after everything was said and done I was making a little under minimum wage for all my hard work!  I was shocked.  I mean I wasn't charging peanuts by any means, how could I be making minimum wage!?  The reason was simple, those numbers had never been based off of me, they were made for someone else with different work hours and product expenses and overhead.  Pricing isn't one size fits all, it has to be tailored to the individual.

Yesterday Kate gave you guys some great ideas to help you reexamine your price sheets through a fresh pair of eyes, today I'm going to give you a few more things you might want to think about while refining your pricing that I learned over the 7 years I ran my photography studio.

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Start by being honest about your skill level

We all want to make the big bucks, but we have to be honest about how our skill level compares with the market average.   Things like a college degree in our area of expertise typically give an individual the right to charge a bit more for their services.  While yes we are in the arts and there are people just born with innate skills and a college degree is by no means required to work in many of the arts, it does still add value to your services as do attending workshops and seminars.

Experience really does count for a lot

Again, I know we think we are amazing sometimes and that our work is kick butt and that everyone should want to hire us and pay us gobs of money, but we need to remember that even if we've got the skills, we may not have the experience we need to charge the big bucks yet.  While yes two artists may be at the same level skill wise, the artist with the greater amount of experience is entitled to charge a bit more.

Just how much are you working anyway?

Most people have no clue just how many hours they end up putting into a project.  However, this is vital information for figuring out our pricing.  Next time you start a project keep a written time log of ALL your working hours, client meetings, emails, phone calls, running to the store to pick up materials, all that time counts on top of your official "I'm making art now" time.   You will probably be surprised just how many hours you log.

Don't forget about expenses and overhead

When we take on a project we need to make sure that we are charging our client enough to not only cover the hours we are working but also the costs we are going to incur along the way.  We need to cover the cost of gas we spend to drive to meetings, for materials, for software, for products, for licensing, for office rent, business insurance payments, for the lunch we buy our clients at our meetings… etc.  If we have to spend money out of our pocket in anyway toward a project, the project should be making enough money to pay us back for it.  The easiest way to figure this out is to simply keep all your receipts.

Don't forget Uncle Sam

One other factor we need to keep in mind while we are examining our pricing is taxes.  Yes a lot of us pretend this doesn't exist but that is a very dangerous game and sooner or later you are hopefully going to be making enough money that Unlce Sam is going to take notice and not be so happy about what he sees.  Sooooo…. better to start good habits as early as possible.  Every state is different so I highly recommend going to talk to your local business bureau and a reputable accountant on the subject to see what you need to be doing.  Once you figure that out make sure you are including those costs into your pricing structure.  For me the best thing to do once I got paid from a gig was to take out the money I knew needed to go toward taxes and put that into a separate account I set up specifically for that purpose.  That way I never had to worry that the money wasn't going to be there when I needed to pay big brother.

Try working backwards*

We have all these numbers, now what the hell do we do with them?  I know it can feel totally overwhelming to break all this stuff down, but trust me now that we have collected all the data the rest is super easy, all we have to do is work backwards.

To start off we need to decide how much we want to be making per hour. This rate should reflect our skill level and our experience. For this example we'll use a recent college grad so good skill level but still low on experience about $15 per hour.

Next we take that number and multiply it by the number of hours we put into our project, for example this project takes us roughly 40 hours of total work time. 

(40 hours x $15 per hour = $600 total) 

After we figure that out we need to add on the overhead we are going to incur over the course of our work on this project, let's say that number is roughly $300. 

($600 hourly + $300 overhead = $900 total) 

Lastly we add on however much taxes are going to cost us for this sale. Let's say $50. 

($600 hourly + $300 overheard + $50 taxes = $950 total)

So for this pretend project I would be charging my client $950, simple right?

*I just want to note that this is just one way of pricing yourself. When you are just starting out I find it to be the simplest and easiest way to get your pricing in the ballpark of what you should be charging and ensure that you're not undercutting yourself.  There are many other ways of pricing yourself, and sometimes hourly rates don't properly reflect what you need to be charging for some services but in any case it's a good place to start at least.  :)

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After I examined my pricing and saw I was making minimum wage I knew I had to raise my prices but I was scared to.  I was already uncomfortable talking money with my clients, feeling like the amounts were so high already that raising them even more seemed ludicrous.

However, the first meeting I had after raising my prices was the very first time I was able to talk confidently and easily about numbers.  I wasn't worried they would see through me, to think I wasn't worth it because I knew those numbers inside and out.  I knew where every penny was going and could account for the reason it needed to go there.  I KNEW I was worth what I was asking and I wasn't afraid of them asking me to tell them about why I charged what I did.

Now go and attack those price sheets because you're worth it, aren't you?

Hang Time: Balancing Life As A Creative

This week on the blog we are talking about trying to bring a bit of balance to our creative lives so we don't turn into crazy people who end up murdering their husbands...

With that thought in mind, during my random journey into the magical land of the interwebs this week I stumbled upon this awesome video by the amazing people over at Red on Black Productions.  Take one google hangout, a handful of amazingly creative people and give them the topic of how to balance a creative life and you get some pretty awesome stuff.


So grab a cup of coffee and enjoy hanging out with the good folks at Red on Black!

BALANCING ACT: HOW TO BALANCE WORK & LIFE AS YOU BUILD UP YOUR CREATIVE CAREER

Art So Small, It Fits In Your Mailbox

We've been talking all week about encouragement and why you should give some and get some and how we sent out handmade encouragement postcards to some creatives in need, so I figured it was high time we showcased some example of just how awesome postcards can be --

I give you . . . ALTERED POSTCARDS!!!

Check out some of the goodness: 

Made by daisy69778

Made by Mandy's Magical World of Art

Made by Susan LotusFlower

And there's a whole lot more where those came from here. Feeling inspired yet? I know I am! I'm going to finish up my postcards to mail out today -- what about you? Send pictures of your mini-artworks to theartabyss@gmail.com, and we'll post them here. Can't wait to see what you make!

Up Up and Away -- Send an Encouragement Postcard Today!

This week, we've been talking about Encouragement - why, as creatives, we need it; why, as people, we should give it; and today, we're putting our words into actions and sending out those encouragement postcards we've been telling you about. Also, this:

Should you share this on someone's
wall today? Yeah you should.

Now I know, some of you are saying, "But wait! I wanted to get a postcard too!" Well, you're in luck. Email theartabyss@gmail.com by Friday this week, and we'll get a handmade postcard in the mail to you right away.

In the meantime, do you know someone who would benefit from seeing that note on their wall today? Maybe you should send it on.

Encouragement: Just Ask

I have something to confess today -- and I'm still a little nervous about it.

But first, let's watch a video from the amazing people over at The Foundation for a Better Life.

Unfortunately, they don't allow embedding of their videos, but you can view it here!

Did you watch it?? I love that cheesy Hallmark stuff.

Yes, this is a commercial, but it's based on a real event. Think for a moment how AMAZING that kid must have felt. Taking a ginormous creative risk, and then not only not getting in trouble for it, but being actively encouraged and celebrated by a master pianist and an entire audience of concert-goers. I'm betting that kid grows up to be the next Rachmaninov, or another one of the guys on this list. Or maybe a guerrilla performance artist . . .

The point is, when we encourage someone to pursue their dreams, we're setting in motion a series of events fueled by positivity - positive thoughts, positive emotions, positive expectations. And that can lead to some really wonderful things, far beyond the scope of the initial encouragement.

This brings me back to my confession. Last night, I was trying to finally -- FINALLY -- send in an application to this totally amazing organization, after three weeks of hemming and hawing and struggling with the feeling that I just wasn't good enough. As an accountability measure, I sent up a flag on my Facebook page, telling people what I was doing and what I was afraid of, and what I hoped to accomplish. This is not something I normally  do - I prefer to let my problems figure themselves out, and then just report on the results. It's less messy that way, and leaves me feeling less vulnerable when I don't have to tell all my friends when something doesn't work out.

This time, however, I'm so very, very glad I did.

BAM! Just like that, the amazing Nancy Hankel (go read her blog, she's hilarious and awesome) and a book by Sheryl Sandberg gave me exactly the shot in the arm I needed -- why the heck shouldn't I apply??

With this in mind, I did send in my application. I have no idea how it's going to turn out -- but I do know that if I hadn't exposed myself just that little bit, I wouldn't have received the encouragement I needed. And if my friend hadn't taken that moment to cheer me on, I would be writing a very different story.

It's like Kadie wrote yesterday, encouragement is a two-way street. Sometimes you need it, sometimes someone else needs it. And if you can have to courage to express that need, or the generosity to see someone else's need and rise to the occasion, the world's going to see a lot more dreams pursued and fulfilled.

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It's not too late to get a super-awesome handmade encouragement postcard from The Art Abyss -- just email theartabyss@gmail.com with your mailing address info, and maybe even a little info about what you need encouragement on, if you like, and we'll get those cards in the mail and sent out to you ASAP!

Challenge #4: With A Little Help From Our Friends

From day one this website has been about keeping it real with other artists and creatives about the ups, the downs and all the in-betweens of living a creative life.  So let me just say straight out that last week was really rough for me emotionally.

I found myself feeling like everything I did was crap, like none of this “creative” stuff I do really matters and that nobody even cares that I do it at all. How could I have been foolish enough to think that anybody would really care about my work let alone want to pay me money for it!?  Basically I sat around having a pity party for myself wondering why I wasn't like a “normal” person, with a “normal” degree and a “normal” job where life would be so much much much less complicated.

But I don’t have to explain this to you guys, you know exactly what I mean I’m sure.  We’ve all been there at one time or another.

Sometimes in this creative life I lead I feel as if I am essentially drudging my way through some dark, murky and infinite abyss.  I keep flailing my arms about around me as I go, hoping to find some sort of hand rail, or wall, or defined pathway, to let me know I’m heading the right direction and not simply around in circles but all I ever seem to come up with is air.  So without any other recourse I simply keep plugging along in the darkness, hoping the direction I set out on will eventually get me to where I want to be and not into some bottomless pit, or off a cliff along the way.  Sounds enticing doesn’t it?

The beauty and the curse of a creative life is that it has no boundaries, it has no rules, it has no predecessors to simply follow along behind.  The course for everyone is their own, they get to make up their own rules, their own path and their own way to travel the distance to get to their goals.

I always find myself looking around at other creatives and thinking that their paths are so pretty, clearly labeled and that they look like they are traversing them so effortlessly.  While mine on the other hand resembles more of a swampland, combined with a mine field, and maybe a few ravenous wild zombies chasing me while I run around like a crazy person trying not to get blown up or drown in a pool of goo.

But that’s the thing, our paths never look as pretty to us as they do to others.  They never look as clear to us as others seem to perceive they are from the outside.  While we can get lost in a maze of our own making, others can look at our lives and see the beauty in the path we’ve followed.

I found myself thinking a lot about this while I was aimlessly wandering around my creative path, avoiding the ravenous zombies, this past week.

When I am lost in my head so deep that I can’t even see which way is up (like this past week), my friends are always there to offer that outside perspective and let me know which way is up again.  It’s so easy to loose track of where we are and how far we have come as creatives, that being given the gift of understanding how others see you from their perspective is one of the most amazing gifts that can be given to another artistic soul.

Creative people tend to be so insecure about their work and assume, no matter how many time you may tell them, that nobody likes what they do, or that nobody cares.  Hearing the contrary from another human being can be life altering.  It can literally mean the difference between someone throwing in the towel for good on their work or continuing to pursue their passions no matter the challenges they face.  A simple “Hey, I think what you do is amazing,” can literally be that important in the life of a creative person.

So on that note, the challenge I put to you this week is to encourage as many of your creative friends as possible!  Send them a hand written note, post a comment on their website, shoot them a message on Facebook, invite them to coffee, whatever, just let them know that you care and that you think they and their work are amazing and of great value.  You have no idea how much something that simple could change their life. If you can’t think of what to write or say, feel free to grab this weeks challenge badge to share with them!

Now, on the flip side of the coin, maybe YOU are the creative person who could really use this bit of encouragement in your life.  Maybe YOU need to hear that what you do matters, and that your work is of value and importance.  I learned a long time ago that there is nothing wrong with admitting that you need a little encouragement! (In fact, I think I pretty much told Kate point blank that I needed a pep talk last Monday at our weekly meeting) If that is the case, we have something special just for you!  Shoot us an e-mail at: theartabyss@gmail.com with your home mailing address and get ready to receive a little something special from us to you. (We promise your info will stay secure and that you won’t get on some weird mailing list.)  Make sure you get your address to us ASAP since we have a limited number of special somethings we can send out!

So there you have it lovely people, mission encourage a creative is officially a go!

If you’ve ever been creatively lost along your own path we’d love to hear about it! Drop us a line in the comment section below to share your story!