sewing business resources
Let me be clear - this is not the content you’re looking for if you think I’m going to tell you to charge top dollar for your services based on fluff and #becauseyoureworthit quotes.
There are plenty of coaches and educators out there pushing people to charge more without backing up their sentiments with reasoning and skill-level. Rather than hyping you up, I wanted to share this formula with you so you know exactly what YOU YOURSELF should be charging to cover your lifestyle.
I’ve never asked other tailors or seamstresses what they charge - even the ones I’m close to.
It isn’t helpful. I don’t know their income situation, who the breadwinner is in their family, if they’ve been left an inheritance to afford all their fancy machines (when I started my business I found out I was comparing myself to someone I thought was a competitor where that was the case), or if they JUST want this to be a hobby that pays for itself.
The key to profitable pricing is to charge what you yourself require.
You need a plan.
This is a simple pricing guide to help you reverse engineer what you need to charge per item or per hour.
At the time that I quit my 9 to 5, I was making $40k/year before taxes, so that’s what I wanted to match. Let’s remember, that’s what I needed to net after expenses, so rather than just quitting my job and trying to find sewing work, I reverse-engineered what I would need to charge to make that happen after taxes, supplies, and expenses. I broke down how many days I wanted to work per week, how many custom pieces I want to do, make, how many alterations I would allow myself to take on.
So here we go, these are my exact steps for how to price your services and products.
You probably already know your personal budget and expenses, so this is your chance to do it for your business too.
Start up a spreadsheet of everything you’re going to need each month to stay in operation. This could be simple materials expenses such as thread and fabric costs, zippers, and buttons, but it’s also going to mean maintaining your machine(s), fixing it if it breaks and puts you out of commission, and paying for web hosting, email marketing services, and online education. Don’t forget to add the expenses you had in getting legal, and factoring them in each year like clockwork. All of these expenses add up, and you need to know them upfront before you factor in things like taxes, LLC fees, accounting and potentially even payroll.
There are two types of expenses to account for.
Fixed costs happen no matter what you’re making.
Fixed vs. variable costs...
Examples of fixed costs include: sewing machines, equipment maintenance costs, web hosting expenses, rent, insurance, etc.
Variable costs are based on what kind of projects you are doing.
Examples of variable costs include: travel, renting equipment, utility bills, contracting assistants, fabric & notions, packaging, postage, etc. These costs vary based on the scope of the project and will be different on a client to client basis.
Now that you’ve got your fixed and variable expenses listed out, and you know what number you’d like to hit this year. It’s time to math, so grab your calculator and let’s dig in.
Desired hours worked per week x Number of weeks you will work this year
It’s okay if you want to work every week. It’s also okay if you only want to work for 6 months. This is your life, your rules, your party. For me, I came from a scenario where I would put in 48 hours of overtime every pay period (my job was intense to say the least). So I was fine with working 60 hours a week if it meant I could do it from the comfort of home, with no commute, and could take weeks off to visit family.
Next...
Hours spent on project/client/product x Number of desired clients per year
Total fixed expenses + Total desired yearly profit
1 - (tax rate in percentage)
----------------------------------------
= Total working hours
For example…
If my total fixed expenses per year equate out to $27,000, and I want to match my $40,000 salary, then rather than just telling myself I need to somehow come up with $67000 a year from sewing, I use the equation. I wrote out that I want to work 60 hours per week, at 50 weeks per year (giving myself 2 weeks off), and my tax rate is 30%, so my math looks like this….
27,000 + 40,000
1 - (.30)
_____________________________ = $28/hour
3,000 hours (60 hrs/wk x 50 wks/yr)
3,000 hours x $28/hour = $84,000
All of a sudden, it’s not so difficult to make a living doing what you love, pay for the party, and pay taxes!
Keep in mind every state’s taxes are different, your business classification changes your tax percentage, and you need to get this info first for your equation to be correct.
Find out your tax rate, and plug all your data into the equation, so you can find your new hourly rate.
Don’t be alarmed if your hourly rate was vastly different than mine - mine doesn’t look this way anymore either. As my skill level increased, so did various expenses, and in addition, I now work very different hours.
The point is, your expenses, workdays, and vacations look differently from the other creatives around you, so your hourly rate should look different too!
Step One: Know your expenses
sTEP TWO: LEARN YOUR HOURLY PROJECT RATE
