There’s a simple formula for figuring out your hourly rate: add up your costs / expenses and divide by the number of hours spent on the project. What’s missing here? Profit.
Profit is above paying yourself above and beyond your actual costs. It’s your salary plus a %.
Say you want a profit of 10%, then figure out your actual costs and tack on 10%.
Let me break it down for you:
Costs / Expenses to include:
So, if you can add up your costs for the year, or a typical month (use caution here, as some month’s expenses will exceed your average) you can divide by the number of hours you will likely be working at your BusinessArt.
Add up all of the ACTUAL costs for the past month:
number of hours on BusinessArt that month: 40 hours
880 divided by 40 = 22
$22 / hour is the break even hourly rate, meaning, meeting all of the expenses for the month.
The price you set for your artwork should reflect your time and materials. Yes, there’s some circular logic in there, since some materials costs are already factored into your hourly rate. But if you have to purchase any special materials to create the artwork, have it framed, etc. those are the hard costs for the specific artwork.
So additional materials costs specific to a body of work consisting of ten pieces: $1500
Divided by the number of pieces (10) = $150
+ your hourly rate to create each piece (10 hours each at $22/hr) = $220
Total break-even price of $370 per piece.
That would be if you sell all ten pieces.
What if you only sell one piece?
Then don’t divide the $1500 by 10
Leave it at $1500 $1500 divided by one piece = $1500)
add the 10 hours per piece x ten pieces (not just the one) = 100 hours
100 hours at a rate of $22 per hour = $2200
So one piece would go for $1500 + $2200 = $3700
That would be the break even price if you were to sell only one piece of an entire body of work.
Again, that’s the break-even price.
Now, figure out your profit.
10% of $3700 = $370
Is that enough to meet your living expenses plus some extra for savings, special occasions, or meeting some unexpected expenses along the way (e.g. car repairs)?
One month living expenses: $2000
Add $3000 to the $3700, and the price nearly doubles to $6700 for one piece, or $670 if you can sell all ten.
That's almost 100% "profit" if you double your prices.
So, somewhere between $670 and $6700 is your artwork price if you want to maintain your current living expenses.
Things to consider: What the market will bear?
Maybe you think $670 is way too high? You can always lower your prices, but expect to have to supplement your income by doing non-BusinessArt work.
Maybe you think $6700 is too low? Maybe you want even more profit, or have extra cash on-hand to set-up a retirement account, save for a downpayment on a house, pay for college, etc. Well, add that into the equation.
There are no real rules here, except what’s legally OK as far as taxes are concerned.
Colin Burke's observations on becoming, being an artist, art related news and analysis, features, reviews, tips, popular culture and historical references, facts and creative non-fiction.