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DirtRoads

" for a business where the output is so finite "

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--- Gep quote

Didn't want to hi jack the other thread, but this is really on my mind.  I'm at that point.  Currently I have 3 full time employees.   One in jewelry, the other 2 pottery.      Here's what I think ... for every person in pottery production, you need 1 kiln.  Every person can yield about $75K a year in pottery.   That's  what I'm seeing.  Does anyone have different numbers?   

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Sounds right to me. I am outputting just about $75k worth of pots per year. By myself, and I have no interest in expanding or having employees. Though I need two kilns to do it. 

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I've run your numbers several times.   A couple months back, I was on your blog and saw your "new" bathroom.  I made a comment about it and then remembered I made almost the same comment a few years back.       My business if I had just me and only did pottery, would have almost the same numbers.   You and I both realized that wholesaling was less money for us a long time  ago.   "By myself, and I have no interest in expanding or having employees".   I could totally go that way.    One of my pottery friends says that exact thing.   The employees I have allow me to do other things like my jewelry line and new fragrance line.      It would be very hard to justify 2 pottery employees if all I had was the pottery because I personally, wouldn't see a lot more income.  More revenue, but not more revenue.    I've run the numbers a few times and I think at around 5 employees, and adding wholesale, I could see more income.      But then I would be more in management and new product prototypes. 

"Output is so finite".    Seems a lot of potters never get to that point  That offers so much insight to this business.      I really pick and choose what yields me the most revenue.   Not always just inexpensive things.  About a month ago, I did the most expensive piece I've ever done.  $1500 but it included 2 on-sight trips and me making an exquisite floral arrangement in the container.  .   I  insisted on no payment until it was done.     Wasn't in the studio but they left me a $500 tip plus the payment of $1500.      Would I like more of that type work?  Probably so.   

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I have a 6 hour a week form thrower and a part time studio assistant . I peaked a few years ago at 150_+ K in sales-since that time I have downsized a bit  and now its just over 100 -120K in sales. I think on my own it would be about 70-85 without help of any sort.

This depends on how much I would want to work at it as it could be more if I was younger.

I have two gas kilns for this and an electric for about 8 bisques a year (little use)The gas kilns are each fired about 27 glaze fires.so 52 glaze fires approx.I only bisque in the large car kiln which will fill that kiln and my smaller 12 cubic kiln.

I'm working on buying a used giel 18 cubic gas kiln on a friends estate I'm claening out for him since he pasted away. About 80% done but got sidetrackied ina huge remodel.

If I wanted more $$ I could have worked more but I have other interests that are more important than making money.

 

Edited by Mark C.

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There was a point, almost ten years ago, when I was doing a lot of wholesale and feeling like I couldn’t keep up, that I sat down with my accountant and said “I think I need an employee.” He talked me out of it. “You’ll spend your time being a manager instead of a potter. You won’t make any more money, and you’ll be less happy.” He has given me lots of good advice over the years. He has inside views into lots of self-employed peoples’ practice, and I can imagine he watched a lot of small companies go south this way. 

He told me to design a workflow that I can handle by myself, and that is when I got serious about maximizing the dollar value of every hour spent working, And started cutting back on wholesale, realizing that it was not the best use of my time. 

2 hours ago, Mark C. said:

If I wanted more $$ I could have worked more but I have other interests that are more important than making money.

I schedule regular days off. I need them let my sore neck and back feel better, and to care of the rest of life’s responsibilities. I could probably output more if I wanted to as well, but don’t see the point. 

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One needs to decide if they want to manage people-I decided long ago that that was not what I wanted to do much of. I do have a few hours a week of this but its a small amount and its I have it working well for maximizing dollars for me.

If you have a helper make sure they help you and you are not spending your time helping them

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A good managerial accounting prep book might be a good read. Financial accounting is all about the financials for outside consumption but managerial accounting better deals with the reality of people making and shipping a product.  A lot of folks do it here with shows and you do it with your retail location and those two venues I think may cause a more finite sell through but wholesale and wholesale retail (selling from a wholesale production process at retail prices) can scale and I think in just about any area of studio pottery you will find a half a dozen companies doing it with studio pottery methods.   

Not saying everyone or anyone really should scale and I get it may be too much of a hassle to grow and add employees but if the pricing is right then it becomes a marketing issue on how many potters can be employed. Just like any other manufacturing company as long as a net net is achieved over COGS then what you sell caps what you make. The only way an incremental addition of labor only pays for the labor is if the pricing is off or unobtainable.

As an example, If you check out the marketing mug potteries (they have a stamped logo or marketing badges on them) you will find probably a half a dozen companies that have 30-40 employees and while some do slip casting, a lot of them throw, handle and badge just like a one man operation does. They just do a lot of them and the jobs are broken up into teams. Ditto for art tile companies. Check YouTube and you can see videos of a lot of their studios.  Rows of Skutt 1227's and/or car kilns and rows of potters wheels with guys throwing to gauge, buckets of glaze with waxed pots being dipped or tiles being hand extruded, hand cut and hand painted.

The difference seems to be that they have developed a national market of private companies and government entities that want these handmade pots over cheap few dollar imports. 

 

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