FRIDAY ART BIZ TIP: How to track costs to create your art

It is really helpful to know how much you actually make when you sell a piece of your art.  To do this, you need to know your costs!

First, time yourself making a piece that is similar in size to your usual work. Make note of all the materials used and roughly how much of each (for example, if each painting uses a certain amount of gesso or flow medium... no need to track trace amounts of products). 

Next, take those costs and build a table with the sizes of pieces you create using your first piece as a measure.  For example, if you timed yourself creating a piece 16"x20"- double the expenses for a piece that might be 30"x30", and divide by two for a piece that is 8"x10".  See example below:

COGS-tablev2.jpg

NOTE:  The formula to determine your retail price is:   retail price = [(Cost) / (100 - markup)]x100.

Your mark-up can be anything from 20-40%. For example, a 5"x7" that costs $38 to make (from the chart above) with a 40% markup would calculate as follows: [ (38.00) / (100 - 40)] x 100 = $63.34

As you start making other sizes, take notes and adjust your table as necessary. In the above example, this artist makes $25.34 for selling a 5"x7" piece.  At 1.5 hours per piece, she might be able to turn out quite a few per week, but she should adjust her hourly wage until it is one that works well for her.  To be clear- in the above example, the artist will take home $30 in pay and $25.34 in profit. (NOTE: Read Profit First by Mike Michalowicz to help figure out how to set up your business finances.)

This table is used in "A Crystal Ball for Your Art Business." Get the download by CLICKING HERE!

REFERENCES:
https://www.shopify.com/retail/120028547-9-strategies-for-profitably-pricing-your-retail-products
http://www.artbusiness.com/artists-how-to-price-your-art-for-sale.html