You may have wondered if using an hourly wage is the right way to determine your pricing as a small business owner or independent artist. For those who make money from a creative hobby, there are factors we should first consider regarding the pros and cons of using an hourly wage.
Depending on your exact situation, using an hourly wage may be beneficial. If your business is centered around work that is easily quantifiable and isn’t super skill based - as in inventory management or order packaging, using an hourly wage and keeping track of the hours you put in to help determine your pricing. Similarly, if you are in the early stages of jewelry making and your skill level is progressing very slowly or remaining stagnant, an hourly wage can aid you in figuring out a baseline price, and in general get a handle on how much you’d like to be paid for how much labor you’ve done.
But as an independent artist dedicated to working on your craft, day in and day out, your skill is bound to improve. So as your proficiency increases, you will naturally require less time to do the same amount of work, while your technical skill becomes better and better. Does this mean that the value of your work is less? Absolutely not - but with a wage tied to how much time you spent on your creation, that’s exactly how it works.
Technically speaking, you could adjust your hourly rate to match the growth of your skill. But speaking from experience, that can get tricky to keep track of. It’s much simpler to establish a price range for a specific amount of work early on, which can be adjusted and expanded upon as your skill develop. This approach allows you to be more comfortable and confident in your prices in the long run, while also acknowledging the long-term value of your work.
It’s also good to keep in mind that part of the value of creativity is the freedom of experimentation, expression, and uniqueness, and the value of your work extends far beyond simply the time you spend working on something. Not to mention, creativity can get messy. If I spend 10 hours working on something, but early on at hour 4 I had to scrap all my progress and reinvent the concept, do I charge for all 10 hours, or do I charge only for the hours spent on the final version? This is to say that there is a natural ebb and flow to creativity that includes inspiration and improvisation, and attempting to quantify it all in an hourly wage is in direct conflict with the nature of creativity.
In addition to understanding the nature of creativity, you will also have to account for market demand for your work, your brand reputation, market conditions and client expectations - all of which are often continuously changing and are hard to account for in a set hourly wage. While few may be able to make an hourly wage work for them, most artists adopt a combination of approaches that they can modify and adapt to their different projects or clients as needed. Keep in mind on your journey that the only way to understand is to experiment, and there is no shame in experimenting with your prices until you find what works for you - even if that means pricing your items higher than other people think they should be priced, or lowering your prices if you think that will help them sell.