1 00:00:04,320 --> 00:00:04,890 Hi there. 2 00:00:05,310 --> 00:00:07,710 I see that you made it over to the new tips 3 00:00:07,710 --> 00:00:09,660 and talk portion of the podcast. 4 00:00:10,260 --> 00:00:14,850 These are bite-sized topics that I pull from community questions and 5 00:00:14,850 --> 00:00:19,020 things that I'm observing in the world of handmade small business. 6 00:00:20,330 --> 00:00:25,190 I have a conversation to talk about today that honestly, 7 00:00:25,430 --> 00:00:27,350 I have never, 8 00:00:27,800 --> 00:00:29,930 ever heard anyone discussing, 9 00:00:30,770 --> 00:00:33,890 and that is as a solo preneur. 10 00:00:33,950 --> 00:00:36,710 So a handmade business owner, 11 00:00:36,710 --> 00:00:40,010 you're the only one working in your business. 12 00:00:40,640 --> 00:00:45,230 How much money can you truly make when it's just you? 13 00:00:46,250 --> 00:00:46,850 I'm curious. 14 00:00:46,850 --> 00:00:49,460 Have you ever thought about this before? 15 00:00:49,580 --> 00:00:53,990 Have you ever figured out how much you could actually make, 16 00:00:54,230 --> 00:00:56,120 if it's just you all right, 17 00:00:56,120 --> 00:00:57,890 let's go ahead and dive into it. 18 00:00:58,400 --> 00:01:02,000 Understanding your number is really important for a couple of reasons. 19 00:01:02,390 --> 00:01:03,980 Well, lots of times when we go into business, 20 00:01:03,980 --> 00:01:04,280 we're like, 21 00:01:04,280 --> 00:01:04,470 you know, 22 00:01:04,560 --> 00:01:06,470 I want to make X amount of money, 23 00:01:07,400 --> 00:01:09,380 but how do you know if that's even possible, 24 00:01:09,440 --> 00:01:11,810 especially as a handmade product creator, 25 00:01:11,930 --> 00:01:13,220 because with each sale, 26 00:01:13,430 --> 00:01:15,140 you've just created more work for yourself. 27 00:01:15,800 --> 00:01:20,390 So by defining this number and being realistic about what you're 28 00:01:20,390 --> 00:01:21,200 able to do, 29 00:01:21,440 --> 00:01:24,290 it confirms that you can reach that revenue number in the 30 00:01:24,290 --> 00:01:25,190 first place, 31 00:01:25,820 --> 00:01:29,360 or it gives you the means or the areas where you 32 00:01:29,360 --> 00:01:32,450 see, you need to make some adjustments so that you could 33 00:01:32,480 --> 00:01:34,340 reach that income potential. 34 00:01:35,030 --> 00:01:36,230 So let's get right down to it. 35 00:01:36,230 --> 00:01:39,590 We're going to dive right into how you figure out what 36 00:01:39,590 --> 00:01:40,730 your number is. 37 00:01:41,300 --> 00:01:42,890 Three numbers you need. 38 00:01:43,190 --> 00:01:48,350 As you go in to determine what your potential is with 39 00:01:48,350 --> 00:01:50,090 your business as it's currently set up. 40 00:01:50,270 --> 00:01:52,820 Okay? So the first thing you need is what is your 41 00:01:52,820 --> 00:01:54,710 average sale price. 42 00:01:55,790 --> 00:01:57,500 If you only make one product, 43 00:01:57,500 --> 00:01:58,550 then that's really easy. 44 00:01:58,830 --> 00:02:00,410 You know what your product is, 45 00:02:00,680 --> 00:02:02,330 you know how much you're selling it for. 46 00:02:03,020 --> 00:02:07,160 The second number is how much time does it take to 47 00:02:07,160 --> 00:02:09,170 produce each product? 48 00:02:09,620 --> 00:02:12,530 And the third number is your monthly revenue target. 49 00:02:13,220 --> 00:02:15,770 You could look at this as income, 50 00:02:16,070 --> 00:02:19,340 but for purposes of clarity and ease right now, 51 00:02:19,340 --> 00:02:21,800 we're just going to look at top line revenue. 52 00:02:22,220 --> 00:02:23,330 The formula is the same. 53 00:02:23,360 --> 00:02:26,420 Whether you're looking at the income or the revenue, 54 00:02:26,990 --> 00:02:28,160 I'm going to give you the formula. 55 00:02:28,760 --> 00:02:32,000 And then I'm going to give you three different examples using 56 00:02:32,000 --> 00:02:36,320 specific products and pretty real time numbers. 57 00:02:36,440 --> 00:02:38,480 Okay? So here's the formula. 58 00:02:38,780 --> 00:02:41,030 Once you've got your information together, 59 00:02:41,330 --> 00:02:44,030 what you do is you're going to look at the revenue. 60 00:02:44,090 --> 00:02:47,180 So this is how much money you want to make a 61 00:02:47,180 --> 00:02:49,490 month. Let's say you want to make $2,500 62 00:02:49,490 --> 00:02:50,540 a month revenue. 63 00:02:51,170 --> 00:02:54,920 You divide that by the price of your product. 64 00:02:55,640 --> 00:02:57,680 Now, if you have multiple products, 65 00:02:57,680 --> 00:02:59,180 what's the average price. 66 00:02:59,410 --> 00:03:00,160 Someone buy. 67 00:03:00,400 --> 00:03:02,250 Usually only one. 68 00:03:02,680 --> 00:03:04,120 Do they buy one in another, 69 00:03:04,120 --> 00:03:07,690 add on what's approximately your average ticket price. 70 00:03:08,440 --> 00:03:12,040 And that gets you to how many pieces you're going to 71 00:03:12,040 --> 00:03:16,140 need to produce each month to make that top line Revenue. 72 00:03:17,040 --> 00:03:18,390 Then once you have that, 73 00:03:18,720 --> 00:03:22,290 you gonna model To apply that number of pieces with how 74 00:03:22,290 --> 00:03:23,430 long it takes you. 75 00:03:23,430 --> 00:03:28,170 So the time involved to make those pieces again, 76 00:03:28,290 --> 00:03:33,000 revenue divided by retail price equals the number of pieces you 77 00:03:33,000 --> 00:03:34,200 need to sell per month. 78 00:03:34,800 --> 00:03:38,250 And then your pieces that you need to sell per month 79 00:03:38,490 --> 00:03:41,850 multiplied by how long it takes you. 80 00:03:41,850 --> 00:03:45,990 Your production time to make each Piece gives you the number 81 00:03:45,990 --> 00:03:49,500 Of hours you would need to invest in your business to 82 00:03:49,500 --> 00:03:52,080 make that top line number. 83 00:03:52,770 --> 00:03:54,210 Let me give you three examples. 84 00:03:54,720 --> 00:03:59,670 Let's say you are knitter and your product that you sell 85 00:03:59,670 --> 00:04:00,630 most often. 86 00:04:00,960 --> 00:04:04,050 Let's say this is the only price Make is a knitted 87 00:04:04,050 --> 00:04:05,100 beanie. And yeah, 88 00:04:05,140 --> 00:04:08,400 You sell these knitted beanies for $30. 89 00:04:08,760 --> 00:04:10,350 So we're gonna take 2,500. 90 00:04:10,350 --> 00:04:12,330 This is the average we're going to talk about per month. 91 00:04:12,780 --> 00:04:15,810 Divide that by $30 Per beanie, 92 00:04:16,800 --> 00:04:21,120 that means You would need to make 83 beanies each month. 93 00:04:21,510 --> 00:04:23,580 We're saying you sell a hundred percent through, 94 00:04:23,610 --> 00:04:25,770 right? That's just the way we're going to run this number. 95 00:04:25,770 --> 00:04:27,420 You sell a hundred percent Of them. 96 00:04:28,230 --> 00:04:30,000 You would make $2,500. 97 00:04:30,390 --> 00:04:34,920 However, each one of these beanies takes three hours to make. 98 00:04:35,310 --> 00:04:37,680 Which means when you run the equation, 99 00:04:38,640 --> 00:04:45,300 it would take 249 hours to make your 83 beanies to 100 00:04:45,300 --> 00:04:47,190 make $2,500. 101 00:04:47,760 --> 00:04:54,510 That's A little over 62 hours a week production time to 102 00:04:54,510 --> 00:04:55,710 make $2,500 103 00:04:55,710 --> 00:04:55,950 A month. 104 00:04:56,760 --> 00:04:58,050 Now I think we can all See, 105 00:04:58,050 --> 00:05:00,870 like that is going to be difficult. 106 00:05:01,170 --> 00:05:03,360 We're not talking about other business activities. 107 00:05:03,360 --> 00:05:05,700 We're just talking flat out production time. 108 00:05:06,720 --> 00:05:08,880 So if you run numbers and you find you're in a 109 00:05:08,880 --> 00:05:09,960 situation like this, 110 00:05:09,960 --> 00:05:12,450 where it's just completely unrealistic, 111 00:05:12,450 --> 00:05:14,610 that you would be able to put in production time like 112 00:05:14,610 --> 00:05:16,860 that. Don't despair. 113 00:05:17,340 --> 00:05:18,930 It's a good thing to know, 114 00:05:18,930 --> 00:05:22,620 because then what you can do is add more products into 115 00:05:22,620 --> 00:05:23,700 your product Flying. 116 00:05:23,970 --> 00:05:26,730 So some of the purchases are going to be higher priced 117 00:05:26,730 --> 00:05:30,420 items, which means it would be Bring up your whole overall 118 00:05:30,420 --> 00:05:31,290 average price, 119 00:05:31,620 --> 00:05:32,520 which consequently, 120 00:05:32,520 --> 00:05:36,660 if you walk this through means you need to produce less 121 00:05:37,260 --> 00:05:38,580 To make the 2,500 122 00:05:38,580 --> 00:05:40,290 To make it more realistic. 123 00:05:40,530 --> 00:05:42,600 Okay. Let me give you my second example. 124 00:05:42,600 --> 00:05:45,420 So that was the first example with the knitted beanie second 125 00:05:45,420 --> 00:05:48,360 example, let's say you do wooden signs. 126 00:05:48,390 --> 00:05:49,830 Maybe you paint them. 127 00:05:49,860 --> 00:05:52,260 Maybe they're engraved again. 128 00:05:52,260 --> 00:05:54,030 I'm going to use the 2,500 129 00:05:54,330 --> 00:05:56,430 as your monthly revenue target. 130 00:05:57,020 --> 00:05:59,240 You sell your signs for $20, 131 00:05:59,720 --> 00:06:05,420 2,500 divided by $20 gives you 125 each month that you 132 00:06:05,420 --> 00:06:06,350 would need to sell. 133 00:06:07,400 --> 00:06:08,750 Each one takes an hour to make. 134 00:06:08,780 --> 00:06:14,840 So that's 125 hours of production time each month, 135 00:06:14,900 --> 00:06:17,570 which breaks down to again a little over now, 136 00:06:17,600 --> 00:06:19,700 31 hours a week. 137 00:06:19,940 --> 00:06:20,720 That's a lot, 138 00:06:20,780 --> 00:06:22,700 that's almost a full-time job too. 139 00:06:23,540 --> 00:06:26,180 Right? So something to consider, 140 00:06:26,630 --> 00:06:28,970 as you're looking at what is actually feasible, 141 00:06:28,970 --> 00:06:33,650 what could you actually really produce to make that goal of 142 00:06:33,650 --> 00:06:34,820 the 2,500 143 00:06:35,150 --> 00:06:36,500 in this case, 144 00:06:36,800 --> 00:06:40,250 maybe you can get your production time down by batching so 145 00:06:40,250 --> 00:06:41,570 you can produce more. 146 00:06:41,750 --> 00:06:44,060 Maybe you can get it so that one of your wooden 147 00:06:44,060 --> 00:06:45,680 signs doesn't take an hour, 148 00:06:45,860 --> 00:06:47,570 but it only takes 40 minutes. 149 00:06:48,170 --> 00:06:50,090 Maybe you raise your prices, 150 00:06:50,720 --> 00:06:51,410 things like that, 151 00:06:51,470 --> 00:06:53,870 okay. To affect the numbers so that you can bring in 152 00:06:53,870 --> 00:06:55,490 the revenue that you're trying to reach. 153 00:06:56,030 --> 00:06:57,920 Third example is let's say you make soap. 154 00:06:58,310 --> 00:07:00,470 We're sticking with a 2,500 155 00:07:00,890 --> 00:07:03,440 top line revenue that you're trying to make a month. 156 00:07:03,860 --> 00:07:06,200 You sell your bars for seven 50, 157 00:07:06,200 --> 00:07:10,070 a bar running the math you would need to make and 158 00:07:10,070 --> 00:07:13,880 sell 335 bars each month. 159 00:07:14,810 --> 00:07:18,140 But you can make 20 bars at a time and we'll 160 00:07:18,140 --> 00:07:19,070 call that a batch. 161 00:07:19,370 --> 00:07:23,660 And so if you divide the batches into the 335 bars 162 00:07:23,660 --> 00:07:24,320 for the month, 163 00:07:24,530 --> 00:07:27,080 that 16 call it almost 17. 164 00:07:27,080 --> 00:07:32,120 Batches takes three hours to make a batch that equates to 165 00:07:32,120 --> 00:07:33,320 50 hours a month, 166 00:07:33,560 --> 00:07:38,510 which only equates to 12 and a half hours a week. 167 00:07:38,930 --> 00:07:42,890 Now that feels really reasonable production time, 168 00:07:42,890 --> 00:07:46,610 12 and a half hours a week to make $2,500 169 00:07:46,640 --> 00:07:47,030 a month. 170 00:07:48,110 --> 00:07:52,070 So this is the formula that you would use to figure 171 00:07:52,070 --> 00:07:54,800 out if the revenue that you want to make within your 172 00:07:54,800 --> 00:08:00,230 business is realistic with you being the only person doing the 173 00:08:00,230 --> 00:08:04,430 production. This number is really important because as we start out 174 00:08:04,430 --> 00:08:05,240 in our business, 175 00:08:05,270 --> 00:08:07,970 yes, it's easy to start your business. 176 00:08:07,970 --> 00:08:09,770 You make something people want to buy it. 177 00:08:09,770 --> 00:08:10,880 So you get started. 178 00:08:10,910 --> 00:08:12,410 You get your pricing in line, 179 00:08:12,740 --> 00:08:14,840 but what about the production time? 180 00:08:15,050 --> 00:08:18,200 Is it realistic to meet your revenue goal? 181 00:08:18,440 --> 00:08:22,010 Here is the way for you to figure out if it's 182 00:08:22,010 --> 00:08:23,870 achievable based on the time. 183 00:08:25,660 --> 00:08:26,980 But if you're seeing that, 184 00:08:26,980 --> 00:08:27,490 it's not, 185 00:08:28,030 --> 00:08:28,630 don't worry, 186 00:08:28,840 --> 00:08:31,570 Don't stress out because there are different ways that you can 187 00:08:31,570 --> 00:08:34,750 affect the numbers so that it is realistic. 188 00:08:35,140 --> 00:08:36,040 Again, the formula, 189 00:08:36,040 --> 00:08:39,880 just to summarize it one more time is you take your 190 00:08:39,910 --> 00:08:42,460 overall revenue that you want to make in a month. 191 00:08:42,820 --> 00:08:43,690 For these examples, 192 00:08:43,690 --> 00:08:45,760 I've used $2,500. 193 00:08:46,270 --> 00:08:50,530 You divide it by the average retail price of your order. 194 00:08:51,190 --> 00:08:52,540 If you make only one product, 195 00:08:52,540 --> 00:08:54,040 then that's how much you sell that one. 196 00:08:54,040 --> 00:08:55,350 Product four. 197 00:08:55,740 --> 00:08:57,150 If you sell multiple products, 198 00:08:57,180 --> 00:09:01,050 it's the average ticket price across all of your product ranges. 199 00:09:01,770 --> 00:09:04,110 That gives you how many pieces you need to make each 200 00:09:04,110 --> 00:09:09,570 month. Then you multiply those pieces by the number of hours 201 00:09:09,600 --> 00:09:11,970 it takes to produce those pieces. 202 00:09:12,330 --> 00:09:14,610 And that gives you the total hours that you would need 203 00:09:14,610 --> 00:09:16,470 to be working each month, 204 00:09:17,040 --> 00:09:21,150 calculate it down into the week to achieve the $2,500 205 00:09:21,180 --> 00:09:22,680 in top line revenue. 206 00:09:23,400 --> 00:09:24,360 Now, of course, 207 00:09:24,480 --> 00:09:28,020 how much time you have to devote to your business each 208 00:09:28,020 --> 00:09:29,280 week depends on, 209 00:09:29,280 --> 00:09:29,550 you know, 210 00:09:29,550 --> 00:09:31,170 are you also working a nine to five? 211 00:09:31,170 --> 00:09:32,370 You're in a full-time job? 212 00:09:32,760 --> 00:09:36,630 Do you have children's activities that you are managing through? 213 00:09:36,780 --> 00:09:39,330 And obviously as a priority only, 214 00:09:39,330 --> 00:09:41,790 you know how much time you can actually devote, 215 00:09:41,910 --> 00:09:43,470 but this gives you a realistic view. 216 00:09:43,470 --> 00:09:44,250 As I've said, 217 00:09:45,060 --> 00:09:46,440 then once, 218 00:09:46,440 --> 00:09:46,830 you know, 219 00:09:46,830 --> 00:09:48,720 if what you're trying to do is realistic, 220 00:09:48,960 --> 00:09:50,820 then there's opportunities to tweak. 221 00:09:51,300 --> 00:09:54,390 This helps you figure out if you should increase your prices 222 00:09:54,450 --> 00:09:55,920 on existing items. 223 00:09:56,610 --> 00:10:00,330 If you should add some higher priced items to the mix. 224 00:10:00,960 --> 00:10:04,050 And if you should include some other items that don't take 225 00:10:04,140 --> 00:10:06,390 any production time at all, 226 00:10:07,290 --> 00:10:09,090 if you make an upscale product, 227 00:10:09,120 --> 00:10:10,590 let's say you make beautiful. 228 00:10:10,590 --> 00:10:11,880 Hand-woven shawls. 229 00:10:12,240 --> 00:10:13,530 You sell them for, 230 00:10:13,980 --> 00:10:15,840 let's say $200 a shawl. 231 00:10:16,530 --> 00:10:19,260 You won't have to make as many to reach your monthly 232 00:10:19,260 --> 00:10:22,890 revenue. This also really helps because it gives you a feel 233 00:10:22,890 --> 00:10:26,970 for at what point along the way you need to get 234 00:10:26,970 --> 00:10:29,490 help producing your product. 235 00:10:29,640 --> 00:10:30,510 Of course, 236 00:10:30,540 --> 00:10:31,740 isn't the only thing that you do. 237 00:10:32,040 --> 00:10:34,020 You have to market it. 238 00:10:34,290 --> 00:10:36,510 There is bookkeeping to do. 239 00:10:36,810 --> 00:10:38,910 There is shipping to do. 240 00:10:39,030 --> 00:10:40,680 You're going to go out to craft shows. 241 00:10:40,680 --> 00:10:42,360 Maybe you're going to be networking. 242 00:10:43,020 --> 00:10:44,340 So production. 243 00:10:44,340 --> 00:10:47,400 If I really were to give it a percentage of your 244 00:10:47,400 --> 00:10:50,610 overall time into your business would be, 245 00:10:50,700 --> 00:10:53,550 I'm going to say about 60%. 246 00:10:54,000 --> 00:10:56,100 The rest of that is promotion. 247 00:10:56,100 --> 00:10:58,380 And all the other things that go with the business. 248 00:10:59,040 --> 00:11:01,350 This is not a number that I would want you to 249 00:11:01,350 --> 00:11:03,540 be afraid of at all. 250 00:11:04,140 --> 00:11:06,720 This is a number that will ground you in reality, 251 00:11:06,720 --> 00:11:10,350 that if you are starting this business and you're going to 252 00:11:10,350 --> 00:11:11,820 be relying on this income, 253 00:11:11,820 --> 00:11:13,800 that will be coming in each month, 254 00:11:13,830 --> 00:11:15,630 that it's something that's going to be realistic. 255 00:11:16,410 --> 00:11:20,430 I am sure that this discussion is going to bring up 256 00:11:20,430 --> 00:11:21,420 some question, 257 00:11:21,720 --> 00:11:23,640 some conversation. 258 00:11:24,000 --> 00:11:25,800 And I don't know, 259 00:11:25,800 --> 00:11:26,670 some of you might, 260 00:11:26,670 --> 00:11:27,570 when you run your numbers, 261 00:11:27,570 --> 00:11:27,990 be like, 262 00:11:28,020 --> 00:11:28,740 Oh my gosh, 263 00:11:28,740 --> 00:11:29,040 you know, 264 00:11:29,070 --> 00:11:29,790 what am I doing? 265 00:11:29,790 --> 00:11:31,110 How do I fix this? 266 00:11:31,290 --> 00:11:32,850 I need to adjust some things. 267 00:11:33,360 --> 00:11:36,000 We can have those conversations over in the breeze. 268 00:11:36,480 --> 00:11:39,360 If you aren't familiar with the breeze gift biz breeze, 269 00:11:39,360 --> 00:11:43,320 it's my private Facebook group for all handmade creators. 270 00:11:43,620 --> 00:11:45,450 And I take Q and a sessions. 271 00:11:45,480 --> 00:11:46,800 Each Thursday mornings, 272 00:11:46,800 --> 00:11:48,660 you can ask your specific question. 273 00:11:48,660 --> 00:11:52,170 It's almost pretty much free coaching and you'll get input from 274 00:11:52,170 --> 00:11:53,830 other people who are in breeze as well. 275 00:11:53,830 --> 00:11:57,370 So we can carry on this conversation there. 276 00:11:58,000 --> 00:12:00,490 But I wanted to get this out to you for everybody 277 00:12:00,490 --> 00:12:06,130 to start really thinking about the reality of what you're in 278 00:12:06,130 --> 00:12:10,120 business for and the money that you're trying to make and 279 00:12:10,150 --> 00:12:12,700 compare that against production time, 280 00:12:12,850 --> 00:12:15,840 how you're pricing your products time in, 281 00:12:15,840 --> 00:12:18,400 in terms of balancing it into your life. 282 00:12:18,640 --> 00:12:20,410 Because remember the reason we've started, 283 00:12:20,410 --> 00:12:23,920 this is love of making your product and sharing it with 284 00:12:23,920 --> 00:12:24,340 the world, 285 00:12:24,340 --> 00:12:25,120 of course, 286 00:12:25,390 --> 00:12:27,970 but being able to have flexibility in your life, 287 00:12:28,030 --> 00:12:33,430 the flexibility that your time throughout your day brings as well 288 00:12:33,640 --> 00:12:35,350 as what the income brings. 289 00:12:36,280 --> 00:12:38,740 I know this is a little bit of a heavier topic. 290 00:12:39,310 --> 00:12:40,570 We need to face reality. 291 00:12:40,600 --> 00:12:42,010 We can't live in a dream world. 292 00:12:42,010 --> 00:12:43,360 If we want real results, 293 00:12:43,510 --> 00:12:44,590 you live in a dream world. 294 00:12:44,620 --> 00:12:45,760 You get dream Results. 295 00:12:45,940 --> 00:12:49,360 You live in a world of reality and we get real 296 00:12:49,360 --> 00:12:52,410 results. That's a wrap. 297 00:12:53,040 --> 00:12:54,990 I bet get to the point kind of girl. 298 00:12:55,410 --> 00:12:58,140 And this is what you can expect from these quick midweek 299 00:12:58,140 --> 00:13:02,700 sessions. Now it's your turn go out and fulfill that dream 300 00:13:02,700 --> 00:13:03,570 of yours. 301 00:13:03,840 --> 00:13:06,240 Share your handmade products with us. 302 00:13:06,600 --> 00:13:07,800 We want them, 303 00:13:07,920 --> 00:13:10,620 and they bring us both so much happiness..