Thursday, April 22, 2010

Tracking Data To Set Fair Prices

Setting a price for the work is one of the most challenging parts of being a craftsperson. Creating within customers' price ranges is the other. I wrote a blog post last year showing an app called FMTouch. It lets me create and use an iPhone version of the Filemaker database I created to track time and calculate an hourly wage for my contract work. You can read that post HERE.

Recently, I had to extend that database because now I'm making my own cloth and products. I still use the original system for contract weaving and for weaving my own cloth, but I added another layer to handle the creation of finished products from that cloth.

I've modified the whole system to let data flow in both directions: from whole projects to individual timesheets, and back. This gives me lots of information about whichever piece of data I'm looking at, and the whole context in which it lives.

So, how do I set a price for my finished products? Let's start at the beginning. I wind a beam, then weave a bunch of cloth. All of that setup time gets divided between all of the pieces of material in the project - 4.14 hours in this case. "Piece 5.25" tells me that all of the timesheets for this piece of cloth added up to five and a quarter hours. I have decided that my current weaving skill level should be paying me about $25 an hour, so I nudge the dollars per yard around until that's about what I'm earning. This piece of cloth would wholesale for $36/yd to pay for the yarn and pay my wage to weave it. For 54" wide handwoven, that's not bad at all! The database breaks that into cost per square inch to make it easier to calculate the cost of individual products.

In all of these screenshots, you'll notice that numbers in black are the numbers I enter. Grey numbers are calculated automatically. For the most part. This *is* a homemade work-in-progress!





[Cloth cost for "Purple Cappuccino", including time pulled automatically from timecards]

Now comes the new part, and it's a little tricky. What I needed was a way to track product designs, batches of products made from specific pieces of cloth, and timesheets for those batches of products.

Products refer to a pattern. These are not specific pieces, but a place to store data about the design and collect statistics from pieces made with that design.

Product Pieces refer to a specific Material Piece and a Product. They are batches of real products made from real materials. They pull their costs from the records created when making those materials.

Product Timesheets capture time spent on different tasks to make Product Pieces.

So, let's look at the new design I sewed up today: 4" shoulder bags with flaps. After designing the product, I create a new Product entry for it, including how many square inches of cloth it uses. For now, just look at the top box. We'll come back to the Average Stats in a minute.





[Product page]

Then, for each batch of bags, I create a Product Piece entry, selecting a Material Piece and a Product from the pulldown menus.




[Product Piece page for "Purple Capuccino 4" Shoulder Bags With Flaps"]





[Selecting a Product]

And finally, the meat of the system comes in tracking my time, noting which tasks I'm doing as I do them and retaining links to the Product Piece I'm working on.





[Product Timecard]

At the end of the day today, I know that I'm about half done with each piece I started. I still need to make straps, sew them on, cut the bags apart, and pull threads from the side fringe. Let's look back at the Product statistics for today...




You can see that I made 57 bags, spending about 7 minutes each. They use $1.06 in cloth. Since I'm less experienced at production sewing, I'm only asking $15/hr, giving me $1.63 in wages for each bag so far. My goal is to sell these bags for $10 retail. That means $5 wholesale. At $2.69 spent so far, I've got $2.31 left. That's another 9 minutes each. I can certainly finish them in less than that!

See? All this database stuff is really worth the setup cost. It took about a day to get it working, but now it earns its keep. It takes about 10 seconds to enter a timesheet whenever I start a task and 2 seconds to close it. Then, when it's time to set prices or analyze any other aspect of my work, I've got a complete set of data to help me make good decisions.

And once the data is in there, it's stored forever. I think it'll be more interesting to me than a diary in years to come. "Aaaaw, I used to spend 10 minutes a piece on cell phone bags. Isn't that funny!"

No comments: