Pricing Art for Sustainability

Monika Waterall

Pricing Art for Sustainability

1. Pricing Dilemma

2. Cost Allocation

3. Budget and Ensuring Wages

4. Wage-Based Pricing

5. Joint Venture Advantages

6. Cost-Based Pricing

7. Attracting Investors and Your Investments

Pricing Dilemma: Paying Bills

• Overhead• Supplies

• Short term supplies• Film, paper• Clay, glaze

• Long term = EXPENSIVE• Camera, computer• Kiln, wheel

• Rent• Utility • Wages

• Labor = Pay Yourself!

Accounting Terms & Practices

Damien Hirst

–Sotheby’s auction–Art Factories–160 employees–Personal business manager

Personal Budget: Weekly Fixed1. Add 4 weeks of pay

1. $36,000 / 52 weeks in a year2. About $700 Gross, $500 after taxes (Single

0 withholding)

2. Divide bills as evenly as possible per week

3. Remainder = Approximate Extra spending (going out)

4. This is how much money you see in your bank account

Personal Budget

Ensuring Your Wage: Industry Standard

Labor Hours x hourly wage

1. Glassdoor, Simply Hired, Ehow.com

2. Yearly Salary / 52 weeks in a year / 40 hours a week

• Ceramics Artist $27,000 = $13 per hour• Photographer $30,000 = $14.50

Wage-Based Pricing

( cost x 2) + ( labor hours x hourly wage)

= Price Per Piece

Wage-Based Pricing: Long Term Cost Allocation

Wage-Based Pricing: Short Term Cost Allocation

Wage-Based Pricing: Wage per Piece

Wage-Based Pricing: Price Per Mug

Short Term Cost $0.19 + Long Term Cost $4.50

Total Cost per Mug $4.69

( cost x 2)+ ( labor hours x hourly wage)

= Price Per Piece

Total Cost per Mug $4.69 x 2

$9.38

Cost per Mug $9.38

+ Total Wage per Mug$10.38

Price Per Piece = $19.76

1

2

3

Payoff of Long Term Supplies: Sole Proprietorship

$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a./ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies

Add Long Term Supply Costs from Sole Proprietorship:LT Supply #1 $_______________LT Supply #2 $_______________LT Supply #3 $_______________=$___________________________ Total Long Term Supplies

Payoff of Long Term Supplies: Joint Venture

$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies

Payoff of Long Term Supplies: Joint Venture

$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies

Joint Venture Activity

Find Best Possible Shared Cost

Joint Venture Activity

$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies

• Best shared cost = earlier payoff

• Double Cost Expense Returns after payoff= attracting investors

Cost-Based Pricing

30% Cost + 30 % Markup + 30% Labor + 10% Retained Earnings

= Price Per Piece •30 % Markup = pay off Long Term supplies, then profits after Break Even point•10% Retained Earnings = future investment•More expensive supplies = higher wages

Pay Off Long Term Supplies Early = Industry Investments

• Real EstateBrice Marden

Bought SoHo (artist neighborhood) properties cheap

• Gallery for Other ArtistsDay 19 (Jeremy & Clare Weiss)

Creating Capital: Sustainability

• Easy accounting

• Payoff of Long Term Investments = Pitching to Investors

• Guaranteed • Supplies• Wages• Profits

Pricing Art for Sustainability

Monika.waterall@gmail.com