Thursday, September 30, 2010

Maximizing Profits or Just Get to Make a Profit

My SCORE meeting this week was about maximizing profits. They were shocked at what I was charging for my services. Apparently I'm working for peanuts and I thought I was doing well! We went over the last invoice I sent in to a client and they came up with a $5.36 per piece assembly. I'm not making enough money to make this venture worth while. They told me I could be making more money at McDonalds. And get a free meal with each shift.

SCORE- Service Corp Of Retired Executives

They said forget about maximizing profits, I have to get up to making a profit. We have to figure out per unit cost for each piece I assemble. I also have a variable going on, as I have employees I have to factor in. There's also shipping involved. The clients pay for shipping BUT I have to add on handling charges which they said is 2-3% total on an order. I was charging hourly but what they said makes sense. All companies charge shipping and handling if they are fulfilling orders per order and shipping out. While I don't pay for shipping, it's still my time to put the product in baggies, wrap in bubble, put in the box, go online to make a shipping label, print label, tape up box, tape on label, arrange the pickup. They're right, that's a lot of handling. And as the business takes on more orders, clients and shipping responsibility, I have to make sure I'm not giving it all away for free.

We're going to figure this out with all the new clients and get the existing clients up to speed. I'm fortunate I have these guys to help me with new clients so I can do this right the first time and from now on. Next week I have to bring in my financials so they can look at my numbers. Eesh! I hope those aren't too much of a laugh or appalled looks shooting my way. I think I'll bring a bottle of good liquor so we can have a toast before I become toast.....

I started a Quickbooks class this week! It's an eight week course led by Jim, one of the SCORE guys. Everyone says how easy Quickbooks is, it's not a quick process to learn all the lingo and where to put things in the right place. Once all these numbers get plugged in, you get to see the whole picture of what's going on. There's no room for mistakes when things don't add up. I have my homework cut out for me this week!


d'Olivia said...

I hope this works out for you. I have figured that if I ever actually charged for all of my time, no one would ever buy my jewelry. But it is something I do think about.

Jewelry Assembly Chicks said...

It's so true. I was practically shaking when they were just holding there heads in befuddlement as to what I was doing. But they are right. Your time is worth it. Make sure that that it is included in your prices when you put it out there.

I know you love what you do. It seems when we are hand making and hand crafting in any medium, no one sees that as value, like it's a hobby, why should they pay for your sweat and tears? If paintings can sell for tens of millions, why not your own hand crafted designs?

Try it with a few pieces at first, like new designs. You are developing as an artist and it should be valued as such. Let me know how it goes! Thanks so much d'Olivia for stopping by.