This is the first in a series of posts covering the topics around pricing your work.
What’s the most confusing and painful aspect of woodworking?
Mentaly speaking, I mean. (We’ll not get into the physical pains associated with our craft.) I’m willing to bet that for most of you it’s the quest to disocver the answer to the ever-present question:
“How much should I charge for this?”
Pricing is one area that woodworkers can really get it all wrong.
Even with all the discussions, blog posts, articles, books, and forum threads dealing with this subject, we’re still seeing more and more people throwing their hands in the air out of total frustration and confusion. And with all these apparent discussions going on there still apears to be a lack of resources on the subject. We haven’t seen a book published on the subject in almost ten years.
Strange? Well, maybe not considering most of the advice being drolled out is irrelevant, outdated, and based on a big fat lie.
It’a a lie that keeps woodworkers from really growing and doing their highest most valuable work, while breeding complacency for just being active. And there’s a pretty good chance that you’ve been buying in to this lie for a long time.
Before we expose this giant falsehood, let’s take a look at what’s being passed around as the common pricing formula for woodworkers:
What you consider the end-all is really just a starting point.
Here’s a version of the standard answer to “How do I know what to charge?”
Shop rate x number of hours + cost of goods + 15-30% “profit” = what I should charge.
Look familiar? I bet you’re using something very similar to this right now. I sure did when I first started out.
This is what’s widely accepted as the end-all pricing formula for anyone making furniture or selling related services. But, there’s a flaw.
It’s just a formula for covering your costs, not for making profit.
Now before I appear to rip this all to shreds, let me say that covering your costs is a very good thing. If you’re going to make a living selling your furniture, then you have to know your overhead costs, material expenses, and what your time is worth.
Using this formula will help you get a foundation for making sure your time and expenses get covered. But that’s it. That’s all it does. This isn’t a pricing structure that is designed to bring in real profit and make every pass of the plane and chop of the chisel a valuable action.
If you’re looking to make a living creating beautiful high end furniture or related work, then you have to come to a point where you no longer accept your time as anything less than precious. Every movement must produce the highest value and bring about the greatest of results. Each moment must be used on the most important work you could ever be doing.
An hourly based pricing formula like the one above, doesn’t allow for your time to be used on only the most important game changing tasks.
Instead, it holds you prisoner to the clock. Time becomes your master, when in reality, you’re the one who’s supposed to be controlling time.
In order to start making life easier on you and bring in profit that allows you to grow, you have to move away from a per hour pricing structure. Before doing that, though, you have to become aware of the un-truth that’s holding you back from living and working at your highest level.
Time ≠ Money For The Small Shop
You’ve heard the overused archaic saying, “Time is money!”
We all grew up hearing it, believing it, and praciticing it. Well, guess what? Time DOES NOT equal money.
This is one of the greatest untruths for the creative small shop woodworker that exists in society today.
The idea of time equaling money is based on old factory and mass production mentalities. You had a certain number of products to make and move and 8 hours of production time was found to be the most effecient for maximum results.
Now, if you’re reading this than most likely you’re a small independent shop with anywhere from one to just a few people doing the work. You create beautiful objects of distinction and provide unique services that can never be reproduced in mass quantity. Everything about you says high quality work with careful attention to details. And yet, you’re adopting a production mindset with how you approach your work and your pricing.
In reality, for a small woodshop, time doesn’t equal money. Time equals time. That’s it. Plain and simple.
It’s always going to be a constant struggle if all you do is try to squeeze in as many billable hours as possible in a day.You WILL NOT make money trying to beat the clock completing projects. You will only find yourself overworked, exhausted, stressed, and still grossly underpaid. Is that the life you envisioned having as a woodworker? So why are you still tolerating it?
The reason time does not equal money for the small shop woodworker is because your time is too precious and your product is too valuable to be sold at an hourly rate only.
What if you only had four hours at the most in your shop everyday? How could you maximize that time so you made money? Is it even possible to do that?
If your income is dependent on billable hours, then no, it isn’t possible.
Your pricing is dependant on working “X” number of hours for “X” number of days a week. (For a lot of you that quickly turns into 7 days a week, doesn’t it.) If you stopped believing the lie that time equals money, then you free yourself to be able to do the highest and best work in a shorter amount of time. Did you catch that? Work less earn more. Yes, that’s what I meant to type.
Let’s say you did indeed only have four hours a day to work in the shop. Imagine trying to make a profit if you worked 4 hours a day at a certain amount per hour. Also, I would be surprised if you were even able to have all four of those hours be billable time anyway.
Shop cleanup, maintnence, fixing mistakes, etc all take away from doing the work that pays. Every second of that time needs to be devoted to the most imprtant work possible. The work that maximises your skills and talent to produce pieces of the highest possible value. Setting your prices by the hour simply wouldn’t allow you to get ahead in this scenario.
Freeing yourself from the lie of time equals money allows you to begin working on the most important life changing tasks and projects.
It gives you total control over your time and makes room for delivering the highest possible value in all you create and getting paid for that value. It brings you into the space to reclaim your time as your own.
It means you’ll never be duped again by society’s limitations on work and life.
So, what are your thoughts on time and money? Is there a disconnect in how you’re pricing your work and how long you spend in the shop? Is this simply the post of a dreamer?
Tell me all about it down below.
