Anne Havel, an accountant and Chief Financial Officer in her past life, is writing as a Guest Author for ASK Harriete in this and the following two posts about pricing your work. Ms. Havel gives her accountant perspective beginning with the three most common mistakes that artists make when pricing their work.
Note: The opinions expressed by the author, Anne Havel in this post are hers and hers alone, and do not necessarily reflect the opinions of ASK Harriete or Harriete Estel Berman. No endorsement or refutation is intended or implied.
THE THREE MOST COMMON MISTAKES made by artists when pricing their work by Anne Havel.
Artists rarely remember to consider all the time they cannot work on their art or craft because they are working at shows, applying to shows, traveling here and there, buying and/or scavenging materials, etc. They only consider their direct labor in the piece/artwork. If you work in gold and multiply your material costs, that can be a little forgiving, but many of us do not.
Artists are not keeping track of what they spend. Artists tend to be very carefree type people so they don't pay much attention to these things. Perhaps yesteryear when art sold and one could make a good living, it didn't matter so much. Not true for many of us any longer.
Artists in all media are not talking to each other about pricing. It seems taboo because people think it's all personal stuff when this is part of our business education. When we under price, we hurt each other and the arts community as a whole. We need to educate each other about the value of our work, despite imports. We also need to get on the "buy local" bandwagon.
FROM THE PEN OF Harriete: In the next two posts, Anne Havel will offer a method for establishing a price for your work based on her financial experience. Ms. Havel recommends a pricing formula based on your last year's financial records. In the next 24 hours, dig out your accounting records for 2009 or your 2009 Tax Return, Schedule C, so that you are ready to follow along. Stay tuned!
It is important to know all your expenses when you decide on your pricing formula. On the other hand in the world of art and craft, there are several factors which a person can not calculate with a formula. These will be discussed next week after the pricing formula posts:
- Perceived value
- Factors such as reputation of the artist, media bias, the marketplace.
- What the market will bear.