# More Thoughts On Pricing



## pashley (Mar 22, 2008)

If you been watching my blogs, or have been to WoodBuzz, you'll know I've been exploring the are of woodworker marketing for some time.

It seems to be more and more clear to me that there is really only two classes of markets to which we can sell our products too - those that want to spend no more than $20 or $30 at a craft show, and those people that want to spend a lot of money on a truly crafted product. In other words, cutting boards or chest-on-chest highboys.

I could be wrong about that, but so far, that's my impression.

Of course, you'll always find people in the middle ground - the $300-$600 range. There's always exceptions, but I think it's fair to say that most things wood workers sell are in the lower range, or the much higher range - there is not much of a middle ground.

If you look at your higher-skilled, higher-end craftsman, such as Kevin Rodel, who has stated he has about a 6 month waiting list, for products that sell in the several-thousand dollar range, this seems to make some sense.

It seems like average, middle-class people, who of course, make up the bulk of the population, have no taste (unfortunately) for hand-crafted woodwork; they can't see spending $1,500 on a bullet-proof prairie settle, when they can get a sofa, love seat and recliner for the same price, even though it will last them only 7 years. Rich people can see the value in that prairie settle.

I'd be interested in hearing your thoughts about…my thoughts…LOL


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## nate22 (Jul 12, 2010)

I would have to agree with you on people either want to pay very little for a piece of furniture or they want to pay between 1000 and 2000 for furniture. And like you said there are those few that pay around $500 to $700 but not to many. But if something is price to low you start to wonder if it is made that good. So for me I would be one of those that pays more for a piece of furniture. Thats just my input on it.


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## hObOmOnk (Feb 6, 2007)

You're rationalizing.
There are NOT two extremes of pricing - it's a continuum.
Your success in business depends upon your ability to find your market niche and meet its requirements.
There is *much more* to craft show marketing then to concede failure at very low price points.
Not all craft shows are alike, despite the ubiquitous hobbyist chatter that says otherwise.
I choose JURIED craft shows where my intended market goes and I do very well.
When I go where I don't fit, then I loose money - lesson learned by actually doing.

Example from real life: Several years ago I attended a low end craft show where I sold a particular item for $90 and up. Another vendor, a GORP (Grumpy Opinionated Retired Person), sold a similar item for $10 to $15. He was aghast when he saw my pricing and complained to the events manager. I suggested that we let the buyers decide what they wanted. At the end of the event we met and compared notes. He was gloating with pride that he had over $100 in sales. I did $3800. BTW, the event manage said mine were of a better quality and my presentation was more professional.

I aim dead center for the middle of the road and gear my products accordingly. 
There is no such thing a best-or-worst - again, it's a continuum.

Know yourself…


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## pashley (Mar 22, 2008)

Sorry if I'm being rational, hobomonk - isn't that a good thing?

I'm a very aware that there are low-quality shows, and high quality, juried shows, in which, you can sell mid-priced product, but I don't think you can make a living at it. You can use it to draw in people to your website, perhaps interior decorators, or retail buyers, but I don't see how you can make a real living at it. Sure, you made $3800 at a show - good for you - but how many show like that a year do you do? In my book, you'd have to score at least 10 of them to make a decent living, going all over the US to juried shows. Am I wrong? I'd like to know. In contrast, you have high-end makers like Rodel selling several-thousand dollar pieces, and he's backed up 6 months; I'd guess he's making a pretty good living.

Again, I'm just trying to relate my experiences in what I have seen; if you have other experiences, I would love to know about them, as it would help me, and others on here, to learn, and hopefully, improve sales.


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## hObOmOnk (Feb 6, 2007)

*Sorry if I'm being rational, hobomonk - isn't that a good thing?*

Rationalize: to provide plausible but untrue reasons for conduct.

*I'm a very aware that there are low-quality shows, and high quality, juried shows, in which, you can sell mid-priced product, but I don't think you can make a living at it. *

I know too many artisans that are successful to agree with this statement.

*You can use it to draw in people to your website, perhaps interior decorators, or retail buyers, but I don't see how you can make a real living at it. *

Arts and craft shows can significantly add to your income if you are willing to work smart and to work hard. I prefer to use shows as an important part of my marketing mix, which includes wholesale sales, galleries, teaching and private sales to returning customers.

*Sure, you made $3800 at a show - good for you - but how many show like that a year do you do? In my book, you'd have to score at least 10 of them to make a decent living, going all over the US to juried shows.*

I've done as many as 18 to 20 shows (one, two or three days events) per year, although fewer now. My average direct sales at shows are greater than $1,000 per day.

*Am I wrong? I'd like to know.*

You are wrong,

*In contrast, you have high-end makers like Rodel selling several-thousand dollar pieces, and he's backed up 6 months; I'd guess he's making a pretty good living.*

If you want to be the next Rodel, then what is stopping you? I'm sure that he earned his reputation the old fashioned way.

*Again, I'm just trying to relate my experiences in what I have seen; if you have other experiences, I would love to know about them, as it would help me, and others on here, to learn, and hopefully, improve sales.*

This is not a professional site; it's mostly hobbyists with not-for-profit opinions. While there is nothing wrong with having a hobby, those without a professional perspective make poor business tutors. Most of the comments that you'll get on a site like this will support the hobbyist viewpoint. It comes with the territory.

Get off the Internet and mingle with professionals that have proven what I've been saying. Join a guild, go to high-end craft shows and make contacts, network with successful artisans, find galleries that will sell your products. When failure is your only option, you won't succeed.


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## pashley (Mar 22, 2008)

"I've done as many as 18 to 20 shows (one, two or three days events) per year, although fewer now. My average direct sales at shows are greater than $1,000 per day."

So you're making what, $30k a year? I'm sorry, that's not what I would consider a living at woodworking. It's a nice addition to an income, but not a living income, for me, anyways.

"Rationalize: to provide plausible but untrue reasons for conduct."

Kind of a snarky comeback, don't you think? Rationalize means makes unreasonable justifications for beliefs or actions. I think you may be doing that if you're telling me you're making a decent living traveling show to show, spending money on lodging, meals, gas, entry fees, etc, and grossing $30k a year.


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## BarbS (Mar 20, 2007)

Um, Pashley, it seems you've asked for others' experience and HoboMonk provided his. I don't think it was 'snarky'
to define the word rationalize when you equated it to being rational. Two different words. The thing is, you can beat this question to death or get out and try some shows, mixing with professionals and making up your mind first-hand how effective that type of sales are for your product. It may also have to do with a salesman's personality in reeling buyers in, too. There are many factors to success and failure in that venue, I think. 
Personally, I'm intending to go with internet sales only for now, and not aim for a living wage income from it. That may not work for others, but it's up to each to decide where and how to market. 'Making a good living,' is indeed difficult, but not impossible. It sounds like HoboMonk has put in many many long days producing saleable items and always assessing a changing market, to get where he is. I think his advice is worth listening to.


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## hObOmOnk (Feb 6, 2007)

Your math is fuzzy.

Reread what I said, particularly :

"Arts and craft shows can significantly add to your income if you are willing to work smart and to work hard. I prefer to use shows as an important part of my marketing mix, which includes wholesale sales, galleries, teaching and private sales to returning customers."

I live an arts and crafts lifestyle that is multifaceted *AND* profitable. Here's what I did this weekend.
I attended a gallery get-together where 50 artists and artisans each brought one item for show and sale at a fixed price of $50. In attendance were patrons, gallery owners, other artists, arts administrators, the media and the general public. No big deal, I only made $50. However, I was offered a teaching gig at an artisan center and several attendees have emailed requests for products. I expect more opportunities from this event.


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## pashley (Mar 22, 2008)

Sir, the original point of the post was concerning the two extremes of pricing - and how that seems to be the place to be, if you want to make a decent living at woodworking (other than cabinetmaking).

I'm certainly aware that craft shows can act as a jump-off to other sales; you can use the craft show to make some sales of smaller priced items, and hopefully, interest others in your higher-ticket items online.

Having said that, there very well maybe very high-end juried shows, in socially-affluent areas, such as Manhattan, Palm Beach, or Malibu, and you bring multi-thousand dollar items that you can actually sell on the spot; I'm not aware of shows like that, but I'm guessing they exist. If someone on LJs has done that kind of show, and done well at it, I'd like to hear from them.

I'm just throwing out what I have learned so far about pricing and shows, to see what others have learned; I'm not trying to inflame anyone out there - but when I say "make a good living", for me that means $60k or more a year; for others, that number maybe $40k - it all depends on your personal beliefs and situations.

And may I ask why, HoboMonk, that all you have on your projects page is pictures of a buddha statue?


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## TopamaxSurvivor (May 2, 2008)

What *hobomonk* says is very true of all business, IMO. The correct exposures, demonstration of talent in the right places, networking and, most of all, *leaving a lasting impression* is the key to success. That has kept me working through most of the recessions in the last 40 years in the electrical business. No reason the same principles won't work in WW. I have found the average methods of seeking business; ie, yellow page advertising and bidding with the wolf pack to be an exercise in futility.


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## hObOmOnk (Feb 6, 2007)

Start with a subscription to Sunshine Artist magazine. 
It's worth its weight in gold.

Like I said, I run with a professional arts and crafts crowd. Most are making a good living or at least aren't complaining.

Here's a statewide craft marketing program that I participate in: Kentucky Crafted.

Do your homework on your own region. I'll bet you are missing the boat. Associate with successful artisans and learn their secrets. Work hard, work smart, quit whining.

*And may I ask why, HoboMonk, that all you have on your projects page is pictures of a buddha statue?*

I'm removing/replacing my old projects from this site when I get time. However, I've never listed my products here, just fun-time projects.


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## pashley (Mar 22, 2008)

Thank-you…THAT was helpful. LOL.


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## Puzzleman (May 4, 2010)

Pashley, I also do craft/art shows on a full time basis. I agree with hobomonk that the majority of people in this forum are hobbiests trying to make a little money to feed their addiction.

I do anywhere from 20 - 25 shows per year. these are higher end shows that are located in the middle of the country. I only do 2 shows in my hometown and one of those shows I do only because it is local (I would never travel for that show). My sales at the shows average anywhere from $2500 - $9000 per show depending upon city and time of year. That is only from the shows. I receive quite a few orders after the shows on my website which resulted from the show.

I also wholesale to over 500 stores, websites and catalogs.

I have enough business to employ 14 part time workers. My gross sales is well over $300k.

You can make a living in this business but you need to have price points for all levels. I have items from $309 to $10. By putting a lot of different price points in my booth, I have a good chance of getting to buy something that appeals to them.

the main thing that I have learned is that no matter what your craft is, MARKETING & SALES is the biggest part of my job. You can make the best products but if you can't sell them, they are worthless.

You can see my product line at "hollowwoodworks.com"


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## RexMcKinnon (Aug 26, 2009)

Pashley; I think that one reason that you feel the way you do is because the purchases made in the middle range you are talking about is often made by middle class everyday people who have low cash flow and often buy on credit and pay later. Something the average 1 man shop woodworker probably does not offer. While these people might love the idea of a custom made, solid wood piece, they live of the money they will make next week not the money in the bank now. I don't think it's smart to live like this but unfortunitly there lots of peole who spend what they don't have and credit cards are what allow them to do this.


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## pashley (Mar 22, 2008)

*Puzzleman, * I think I need to talk more with you - you're the exception I was trying to ferret out!

*RexMcKinnon* You pretty much nailed it yes, that was my postion. It seems though, that Puzzleman has challenged that.


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## RexMcKinnon (Aug 26, 2009)

"I also wholesale to over 500 stores, websites and catalogs" Puzzleman has the credit thing figured out. Sell to people who accept credit. People without these kid of contacts either have to find them or live without the credit portion of the business.

I also agree with Puzzlemans point about Marketing.


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## dbray45 (Oct 19, 2010)

Something to think about-
One more thing that Puzzleman does - looked at his web page - his products have a theme. The quantity of different items is manageable, and they are simple but nice. One of the biggest problems that I have seen are people that have too many items in their offerings or the complexities go from blocks to handmade secretaries.

Takes away credibility. Develop a theme, create about 10 items that you can price easily and start with those. The custom names that Puzzleman adds is a nice touch. Once you start selling you will find what sells and when, some products will sell better for the holdidays. This will leave you with a few "special" items to sell and stock up during the year to fill voids in production.


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## Murf2499 (Sep 18, 2010)

I'm new to the business side of woodworking. I have been making items for friends and family for a few years and basically charging a few buck's over cost. Many who I have built Adk. Chairs for have told me to sell them to the public. Last summer I thought I'd give it a try. Got my DBA, business checking acct, credit card account, and went to a show. Unfortunatly I only had 8 chairs, 4 tables and 4 ottomans. I feel they are the best ADK chair available. Made of mahogany decking, glued and screwed with SS screws. All screws countersunk and plugged, then coated with 3 coats marine grade spar urathane.

Well here is my two cents: Went to a show that attracts owners of lake front property. Sold out my entire stock to one person the first day of a three day show( He used a credit card ). Had the opportunity to sell much more, but everyone wanted delivery now, not in "a few weeks.

Maybe I just got lucky, but I am in the process of doubling the size of my shop, taking delivery today of a new cabinet saw, upgraded dust collection, planer, drum sander and will try to make product all winter to sell at 4-5 well selected shows next summer. Only time will tell. I have pictures of my booth at murphycustomwoodworking.com


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## dbray45 (Oct 19, 2010)

Murf
Speak with your accountant about leasing your equipment back to your company. Comes off the financials differently.

Just a thought


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## pashley (Mar 22, 2008)

Murf, hell of a nice story, thanks so much. I hope it works out for you.

This fits into my thought line of having great product - which I'm sure isn't cheap - and having a rich clientele that want to open their purse.


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## roman (Sep 28, 2007)

As a rule I would have to agree but there are exceptions where people who were raised in middle income homes, who had to dig the garden, pick the produce, can it. they had to cut grass, shovel snow and now those same people who have kids of their own, still realize that you cant drive a Cadilac on a Chevette budget.

In the following weeks, I am hanging up my tools as I am just exhausted trying to make ends meet, planning, engineering, purchasing, designing, building, finishing, delivering, installing…................I've had enough.

I can only say that if you shoot for the stars you might hit the barn but if you aim for the barn…........you might miss.


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## KayBee (Jul 6, 2009)

Moron, Sorry to hear that you're 'hanging up your tools'. It's very understandable though, it is a rough business. I know, I used to be in it. Now just a nice hobby. Hope you keep adding your experience to those that need it here on LJs.
You have some great work out there and some customers are really going to miss it.


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## boyd8 (Aug 23, 2009)

Nice thread, I retired in September and have been transitioning to the WW craft for the last 5 years. I will be doing my first craft show this weekend and the following 3 weeks with the products that I have made. Most are in the $10 - $65 range which is what the people will buy.I have a mixing spoon that will be priced at $12 but my cost is so low, out of one board foot I make four spoons and average one spoon in ten minutes. Made them right and left handed for a marketing angle. I have other items above this range that I hope to use as display for more work. Fortunately the shows will be in a small mall called the Artisans courtyard that should attract the artsy people I am looking for. For sure craigslist is not a good venue but it does add to the bottom line.


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## TopamaxSurvivor (May 2, 2008)

Sure glad I didn't pick WW as a vocation!! All the cabinet shops and carpenters I personally have known in the last 40 years have given it up with the exception of my ex bro-in-law. He has had a rough tiime.


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## Puzzleman (May 4, 2010)

For everyone that says they are glad to not be in WW, I say that with the right attitude, product and enthusiasm it can be a great vocation.

It is very easy to hear and tell the stories of the ones who didn't make it. Why didn't they make it? Was it because of lack of sales? Was it because they didn't go out and solicit sales? Was it because they lost their quality? Was it because they didn't understand how to make a profit? Was it because they didn't know how much to charge? Was it because they didn't know how to run a business? Was it because they couldn't teach others how to help them in the business? Was it because they didn't have the proper employees or help? Did they not change product line production method or sales techniques with the times?

There a lot of reasons that people don't make it in the WW field but if you look at the questions above they apply to every business. Running a WW business isn't just about WW but also about running a BUSINESS.


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## TopamaxSurvivor (May 2, 2008)

One guy I know had a gov't contract cancelled in the middle of production. He bought specialized equipment ot do the job and he was out :-(( Bankrupted. My impression had been that it is a very tough business, but the everyone I was competing with in the 80's were gone in the 90's. Maybe electric is easier for me ) eh?


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## dbray45 (Oct 19, 2010)

These are my experiences and lessons learned-

You know, as a business, WW is like any other. I had a computer business for 13 years, did over a million in sales a year. Had competition that was created by the federal govt that in any other situation would have been ruled as unfair by the govt. The result was that I had the sales but if the sales make less than my costs and interest of financing the goods - you have a serious problem. That and 50 cents may get me the cup for coffee. Some people move on and make it work, some shut down their business and create another, some go bankrupt and lose everything, some shut down cleanly and get a job. What you do with what happens is entirely up to you, you can make choices. I never said they are decisions that you want to ever make but you will make them. Even not making a decision is a decision. Now-back to WW. This industry is like every other industry, it has cycles. In a bad economy, because much of it is decorative, it is one of the first to get cut from budgets. If you can create something that is simple, cool, and inexpensive that people will buy in spite of the economy, you will do very well and weather the storm. If you don't, keep your resume polished up and do the WW part time. When this becomes a job, you have to re-evaluate what you are doing. Your customers will see the change and walk away. The people that your customers work with are key and must always be at their best - period.


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## pashley (Mar 22, 2008)

*dbray45*, I like your point that, in lean times, the WW that is trying to make a living, must try to get by with a cheaper product that can eek him through until people are willing to spend money on quality product.

It's weird you should mention this…I've been doing just that, so hopefully, I'm on the right road!


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## roman (Sep 28, 2007)

Who ever said there* isnt *a lot of money to be made in woodworking is foolish.

I have a friend who started a kitchen manufacturing business about 6 years ago and I did my best to help where I could. My advice to him was as follows.

Contract out everything and only assemble. Tender kitchen parts out to various CNC shops and have the CNC shops fight it out like wolves on a calf. Contract out the doors, the finishing, ..........everything.

6 years ago they made one kitchen a week. 5 years ago they made 10 kitchens a week. This year they are producing 100 kitchens a week to the tune of about 1,000,000 a month with no end to the exponetial growth in sight. They are now shipping (also contracted out) right across the country.

They have little to worry about as when one supplier is fed up, there are a thousand suppliers of parts ready to go to bat.

Just a thought


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## pashley (Mar 22, 2008)

*Moron* That's very interesting. I've recently posted over at WoodBuzz this same kind of strategy - regarding having others do work for you cheaper than you can do it yourself, while you focus on what adds value to your end product.

In my blog, I talk about trying to get your wood dimensioned (4 sided) by whom ever you get your lumber from. I buy from a local lumber company that does just that; all his stuff is 4 sided. So I can see exactly what I'm getting. I don't waste time - and risk injury, or excessive wear on equipment - on jointing and planing. They charge very little for the service, and have excellent equipment to do it right. ME doing it doesn't add value to the product, and it takes time away from what DOES add value - proper assembly and finishing. Of course, the next step would be contracting out a guy to dimension the lumber to final sizes for whatever I should make - tables, chairs, whatever.

Thanks for a good point.


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## KnickKnack (Aug 20, 2008)

I can't speak to woodworking as a business, but I can speak to running a business.
Back in the late 80s my wife and I started a computer software development company. We kept our heads above water for several years, but we were working really hard and going nowhere. Our products were great, but neither of us had the marketing or sales skills to get "to the next level". I'm a techie - I can discuss with techie people, and impress the decision makers with my knowledge, but not make a sale to save my life. The wife is great at accounts, admin, publishing etc, but can't make a sale to save her life.
After a good deal of discussion and soul searching we decided to hire a full time sales person. We couldn't actually afford to do this (he wasn't cheap), but we figured we would either succeed, or fail, but either way we would not be stuck at the "home office" level. He consumed (and drank) all the money we made above what we needed to eat for about a year, and then we started to make genuine profit.
Best thing we ever did - my wife and I could concentrate on what we did best, and enjoy, it while the marketing dude could do what he did best (which included a lot of drinking on the expense account). When we sold the business and retired in 2000 we'd made a lot of money, had offices in the US and in many other countries, and were well known in the industry. We'd "made it".

"Make or break" is, of course, a personal attitude. And you have to have good products, good customer service, and decent price points, but it's worth considering whether or not to take that "leap of faith" in your business and invest in the marketing side.


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## Jack_T (Feb 6, 2010)

I do not think your comment

"It seems like average, middle-class people, who of course, make up the bulk of the population, have no taste (unfortunately) for hand-crafted woodwork; they can't see spending $1,500 on a bullet-proof prairie settle, when they can get a sofa, love seat and recliner for the same price, even though it will last them only 7 years. Rich people can see the value in that prairie settle."

is correct.

You equate a decision to purchase with taste and seeing value. Your completely leave out the financial factor. Many people have the "taste" for truly expensive fine furniture (for example a $15,000.00 chippendale secretary for Drexel) but simply cannot afford it. Those same people cannot afford to purchase a custom made piece of furniture from a true craftsman. They may even recognize that it will be bulletproof and last a lifetime. If the money isn't in the bank or the credit card balance is too high they simply cannot afford to buy it. They have no choice but to buy the cheaper furniture evening knowing that it will last only 7 years.

My point is that you should not look down at the market simply because your product is not selling. It is your job to find a way to sell your product.

Rex made an interesting comment that you don't think that the average one man shop offers credit. I do not understand how anyone is is really in business today does not accept credit cards as a form of payment. It is easy to set up an account and there are wireless terminals to take to craft shows to process the sales right at the show. It is simply a necessity in our present day economy.

It is not what price a piece sells for or how much an individual grosses at a sale. It is how much profit is made at the end of the day. If I sell 100 cutting boards for $30 each where each board cost me $5 to make I will have grossed $3,000 and netted $2,500 in profits. If I sell 10 items at $600 each where each cost me $500 to make I will have grossed $6,000 and netted $1000. If I do not think in terms of net profit, I can quickly make the mistake in thinking that $6,000 in sales is better than $3,000 in sales, but in the foregoing example I would be very wrong.


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## TopamaxSurvivor (May 2, 2008)

KnickKnack & Jack_T make very valid points that most trades people over look. One thing you need to do early in a business is critically access your capabilities and determine your comfort levels on a very objective basis. Highly skill artisans are rarely great business people.


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## pashley (Mar 22, 2008)

*Jack T*, of course, what a person can afford also is part of the equation, as with anything, I'd assume. Some people can't afford a $1,500 couch, though it may be the best value overall.

"I do not understand how anyone is is really in business today does not accept credit cards as a form of payment."

I agree. We have a ladie's hair salon in an upscale mall near us; they don't take credit cards. They told me it's because the owner doesn't want to be charged the 3% (or close to that) by the credit card companies. So in other words, if you want an $80 perm, color and cut, you'd better have cash, or a check. I don't think that's a smart business move. I've been by there several times, and was looking for a haircut but had to go somewhere else because I usually don't carry cash.

I can't help but wonder just how much business that guy has lost due to missed sales opportunities like mine.


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## Jack_T (Feb 6, 2010)

Don't kid yourself Pashley, its not the 3 % that the credit card companies take. Its the 40% that the government takes when he has to report the income because the credit card companies made a record of it.
Not all the cash is being reported.


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## pashley (Mar 22, 2008)

Maybe, Jack, but he does have a register ringing up sales, and employees to pay, so it's a risk, if he is doing that.


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## TopamaxSurvivor (May 2, 2008)

One of my basic philosophies which has served me well is do not get yourself so busy doing work that doesn't pay that you don't have time to do work that does.


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## dbray45 (Oct 19, 2010)

I posted this on another page but it applies here so if you will forgive me, I'll paste parts of it here. These are from my experience, some of it the hard way.

In a hobby, the overhead is just something you do and if you have a loss, you fix it when you have time and no harm done.

In a business, every hour that a tool is out of commission, that tool is not making money for you and is in fact costing you money because jobs are not going out. In a one-person shop, this is even more stressed because you are spending your time repairing, replacing, making calls … instead of doing what pays. If, when you work with customers - all of them - and you take a business approach, unless you are giving someone something, you are not only paving your way to a business but building a customer base - and - you are building your tool reserve.

Every one of the tools that you used for each of these projects are degraded from doing their respective duties. Every blade gets worn, I recently re-milled some cherry for a floor (my kitchen) and burned up my router. The replacement, if I were running a business, would be amortized into the pricing for every job it was used. The electric bill is being paid from what you charge, as are medical, phone, lumber, etc…

After you add the tool expense, you may actually be making a negative income. Lets say that you lost both a tablesaw and bandsaw motors in the same day - working on whatever. If these are commercial duty motors, and they should be, you are out $400 at a minimum, maybe $800 plus down time. Every job that you use these tools should be contibuting to an account to maintain your tools. Accounting software will account for this, the small business should create a savings account for your replacement. This account should have enough to replace every tool in the shop at least once.

Then there is the eating thing - need I say more? And you want a vacation?

Just a thought


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## dbray45 (Oct 19, 2010)

Oh, I forgot - expect to pay taxes on the reserve fund (depends upon where you live).


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## Puzzleman (May 4, 2010)

Yes I do take credit cards from my customers. And yes I do report all of my cash sales. I have under gone a tax review by the IRS and I am very glad that I do report my cash deposits. They were looking for cash that was not deposited. Since I do a lot of personalized work, I have order forms filled out with each one that also marks the method of payment. I had to pull out those receipts and they correlated the amounts on those with my cash deposits. The amount that I pay in taxes is less than the amount I would have to pay with penalties and interest.

In fact, I take credit cards from my wholesale accounts as well. Saves me the trouble of sending out statements and waiting several weeks for a check to show up.

My feeling is to report all of your income. Lying about it does not help your situation in the long run. I am running a business, not a hobby. I have bills that most of you don't see such as work comp ins., liability ins (2 mill), building costs, payroll taxes, unemployment ins, etc. I cannot afford to not report all that I make. I need it to pay bills.


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## Jack_T (Feb 6, 2010)

Puzzleman: to be clear, I am not advocating that anyone should not pay taxes. I was merely commenting on the hairdresser.

Of course we all should report our income; in part for the reasons you stated, but more importantly because TAX EVASION IS A CRIME. You can go to jail for it. In addition to interest and penalties there is also the expense of legal fees for the civil IRS claims as well as the criminal prosecution.

You also made a very good point when you mentioned you carry liability insurance. It is imperativ thay every business carry liability insurance. The insurance should include product liability coverage which may require a rider to a general liability policy.


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## roman (Sep 28, 2007)

when you loose money the IRS and or the CRA are the least of your worries

loses are almost always tax deductable no matter where you live, they judge by what you made $$$$$ not what you lost $$$$................just a guess to all you bean counters and actuaries out there

he/she/they do good work

you should learn an expensive lesson and move on ?

lick your wounds and count your blessings….........thats what I do

Those who live in the past get no future…............

Those who forget their past are doomed to repeat it…...........I've found that the more painful the memory, the least likely I am to forget it.?

you might think not, but some day, you might even be glad you learned this lesson,...............and your clientelle will agree.


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