Thursday, June 23, 2011

What's your Value?

Knowing Your Value: Women, Money and Getting What You're WorthI saw a story on the news a few nights ago about Mika Brzezinski and her new book Knowing Your Value: Women, Money and Getting What You're Worth.  While they were mostly talking about how her new book related to the Walmart class action suit that was overturned yesterday, it made my think about knowing my value in this world.  As an engineer you have an idea about what you should be making based on the type of degree, certifications, and other job related requirements.  As a small business owner and crafter, I couldn't begin to tell you my value.

I decided to do some searches to get an understanding of how people in the craft field value themselves.  Little did I know this would be a difficult thing to ascertain.  I found a lot of great blogs and websites that discuss having a successful craft business, but nothing discussing the cold facts and art of developing your salary or even an hourly rate. I've heard quotes ranging from $10/hour to $30/hour that people build into their sales price.

Personally, I'm of a different flavor in trying to build a business some resemblance of a bank account.  My current philosophy at least for the time being is more based on true salesman perspective.  It's strictly commission based.  Meaning, I don't get paid until something sells.  I take a percentage of the sale as my payment, wage, salary, whatever you want to call it.  The remainder of those funds goes towards paying for the material I used to make product.  If that is already paid for by a previous sale then it just goes into one of my asset accounts until I need to make another purchase.

Because of this, my general "value" is low right now.  I do this for several reasons.  The main reason being that this is a brand new business and needs time to build up it's own cash flow before I start making withdrawals from it.  If I start paying myself an immediate wage, I feel I am setting myself up for failure and my business will be in constant need of cash infusions.  In my opinion, this is not a strong position to be in.  That is not to say that this won't ever happen, just that I'd like to minimize it as much as possible.

Once I feel comfortably in the black, I will readdress this issue.  My thought is that I will probably just pay myself a salary instead of worrying about an hourly wage.  But that is a few months out I believe.

Until then, I challenge you out there to evaluate your value.  Are you still thinking of your business like a hobby?  Are you setting yourself up for success?  Am I completely naive in my thinking?  You tell me.

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