A handmade business can consume hours before the first product is made and after the last customer leaves. Ordering materials, bookkeeping, inventory, event applications, website updates, social media, customer messages, planning, cleaning, tagging, packing and scheduling are all work required to keep the business operating.
If your pricing math counts only the time your hands are physically making the product, this other labor can disappear.
Separate production labor from business-management labor
Production labor is active work used to make the product. Business-management labor is time spent operating the business that has not already been counted in production or event labor.
Keeping those categories separate helps prevent double counting while making the hidden workload visible.
What belongs in business-management labor?
Common examples include:
- Ordering and sourcing materials
- Bookkeeping and recordkeeping
- Inventory management
- Festival and market applications
- Website maintenance
- Social media and marketing work
- Customer emails and messages
- Planning and scheduling
- Cleaning, tagging and packing not already assigned elsewhere
Not every business will use every category. The useful question is whether the work is necessary to operate the business and whether you have already counted it somewhere else.
Do not count the same hour twice
If an hour is already included as production labor, do not add it again as admin labor. The same is true for event labor. The goal is to reveal missing work, not inflate the calculation.
Why this matters even when you do the work yourself
Owning the business does not make an hour disappear. You can choose how much value to assign to your time, but treating every management hour as automatically free can create a business model that works only because the owner continually subsidizes it with unpaid labor.
For the production side of the question, read Should You Pay Yourself for Labor When Pricing Handmade Products?. For the wider pricing structure, see How to Price Handmade Products for Festivals.
Turn annual management work into a shared business cost
A simple worksheet can estimate annual business-management hours, apply the labor value you choose, and spread that cost across expected annual sales along with other recurring business expenses. More complex businesses may use a more detailed allocation later.
The free Know Your Number™ Pricing Workshop gives you a place to start. This part of the framework is discussed in Episode 6 of Festival Geeks.