Tuesday, 21 February 2012

Lessons I’ve Learnt 22 – Pricing

At a recent BrisStyle Creative Development Session there were a couple of questions about pricing.
This is an excerpt from my book “How to Teach Art & Craft”. (Publisher currently has a 30% discount if you quote this code: FEBRUARYCART305USD)The info is as true for pricing products as it is for classes.
As usual, be sure to ask yourself “is this right for me now, right now”.

Pricing classes is one of the hardest aspects of teaching. As a novice Teacher you have self-doubts about whether you are worth $x, you also don’t want to be too cheap. It’s a fine line.  Let’s take a look at some of the costs you may incur when teaching a craft.

The Cost of All Materials:
You need to keep an accurate tally of the costs of  materials which go into each kit you prepare PLUS
the costs of the materials you use in your sample or  portfolio pieces PLUS the costs of the materials in your step by step pieces.

You also need to include the cost of equipment you  will be using. You’re probably thinking, “I’ve already  got that”. Have you enough for a class? Do you need to purchase extras? Even if you don’t need to buy any  additional equipment you will eventually need  replacement items. You need to allow for this in your  calculations.

Now let’s look at office supplies. Photocopy paper,  printer inks, plastic bags for packaging, business
cards, advertising, magazines journal etc, which keep you up to date. It is very easy to overlook these hidden  costs.

The Cost of Pre-Class Preparation.
When you first start preparing for your class you need to get out your pen and paper. You are going to start keeping an accurate tally of your time. Don’t just take a bit of a guess based on you doing the craft on your own. Work it out.

Sourcing materials for kits/class work. Whether it’s online, on the phone or driving around from store to store time slips away.

Follow up phone calls to Venue Organizers, Shop Owners; Class Participants all need to be included.

I’m sure the dollars are starting to add up. But we haven’t finished yet.

Cost of Travel

Cost of Travel can be broken up into 2 sub categories. Travel time and actual cost of the travel.

The actual Cost of Travel appears quite easy  especially if you are traveling by train or plane. They
have set costs you can research readily. If you are  driving it can be a bit trickier. The Tax Office
provides a dollar amount you can claim per  kilometer/mile you travel.

Cost of Travel Time is a difficult one for most people   to get their heads around. If I travel to work everyday my Employer doesn’t start paying me from the time I  leave home nor do they pay for my train ticket. And  I’m not advocating they do. However, as an Art and  Craft Teacher with lots of satisfied Participants you will start to find yourself in demand. It is not  uncommon to find yourself driving 2-3 hours/ 100’s of kilometers away for a 2hour class. If you have worked out a hourly rate of $30 per hour you have just  spent more filling your 4wd to get there than you earn.

Costs of Insurances and Taxes

All insurances. Public Liability, Product Liability, Health insurances, Travel insurances, Occupational
Insurances, Workplace Safety Insurances.
Business Registration Fees, Professional Fees, Memberships etc. These may be mandatory depending on your City, State or Country. Some may be beneficial to your credibility, or professional status.

Professional fees payable to Accountants, Finance Managers, Staff.

And the list goes on.

Once Craft Teachers see a list like this they have no trouble understanding how to price their materials and overheads. What many continue to have difficulty with is the intangibles such as your Artistic Skill, Experience and Reputation. When you are a starting out as a Craft Teacher you may not need to take any of these into consideration. It won’t be long before you will need to readjust your pricing structure to accommodate your burgeoning artistic reputation. 
There are three mores factor I’d like you to consider when setting your pricing.

Pricing your class well influences how potential Participants evaluate the value of the class and you as
a Teacher. Pricing too low may set an expectation of  an unimaginative class. Raising your prices a little can boost demand and participation.

Do not set your prices just to maintain your hobby. When you first start running classes you may be
happy just earning a little extra to cover your costs of  doing a craft you love. Life circumstances have a way  of changing on us. It is almost impossible to change  your pricing structure down the track so do it right the first time.

While you may need to have different pricing  structure for different types of classes try to resist
changing your prices too often. Regular Participants will not understand why they are paying $y at this venue and 2 x $y at another.

I have tried to keep this brief, the book contains much more information which will benefit many crafters even if they never teach.
How to Teach Art & Craft is available as a hardcopy, download or through Apple iTunes.

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