I have been thinking about this alot recently, as most of you know, I do lots of shows, but I am becoming increasingly aware that lots of peeps are tempted to do shows and I really worry about how much money people are making or loosing. Its actually not as straighforward as you think to calculate whether you made a profit at a show, I think that lots of people see you taking money and think that you make a killing......this is soooo not true, and after the weekend of doing a very expensive show, taking thousands of pounds and calculating that I made a loss, I was annoyed, seriously annoyed because other people made bigger losses, this it's not OK. NOT OK that shows cost alot of money and then you are not guarenteed to make that money back, ofcourse you get new customers, but if you break even and do that then its not so bad, if you consistently loose money, then you could be spending it else where on something more effective.
So I thought I would write about it, I am going to to do a little spread sheet for vendors, where they can plug some numbers into, and it'll help them cost a show out, I have a day on wed to do it, so I'll share the link here so people can download a copy and run some figures through it...seriously if you do shows have a go, you might be really shocked at how much money you might not be making.
I know that maybe some people may not really understand why I would do this, but actually, there is a real community of vendors who do shows together, some of us only know eachother by seeing eachother at shows, but the shabby organisations of some shows and taking peoples money is starting to really annoy me.
When I twittered about this earlier some people were asking me if it was that it was organisers who were amatuers that was the problem, and actually its not, its actually the bigger shows which are the problem, when a stand costs a few hundred quid, you are not taking a massive risk, but when it costs you 500 or even a 1000 then you are. If I spend that much money on a stand I want to know that there is going to be the footfall I am paying for, and that the advertising has been made to get people there. And its not an excuse for the organiser to say they make no money out of it. We are here running businesses.
Someone said to me recently 'my stand cost 500, accomodation cost 200, I don't have travel costs and I took 800 quid, so I made 100 quid profit'. I had to restrain my self for not shouting because they probably made more like a loss of about 400 at least.
One thing that vendors sometimes forget to take into account is the cost of the product they are selling, how much did the materials cost? how long did it take to make? How much wages do you pay yourself per hour, and then add on NI and tax. Not to mention a squillion other things you have to take into account. So, I am going to do the spread sheet in the next few days and get peeps to have a go, but first of all, I know there are quite a few people who are doing this excercise with me, please go and work out how much profit you make on your product, once you have this information it will help you loads, sometimes its easier to figure out how much you make on a kilo, or a batch of items instead of 1, even time yourself over the next few days, its such a good excercise.
And you must make sure that you take wages as a cost before profit, don't not exclude wages.
OK, thats a start for now xx
Well said, Jen! Especially the bit about costing your product properly (so important) and the bit about shows not being properly advertised when they cost so much. Totally agree.
ReplyDeleteFab idea - I hope lots of people take notice and realise that taking lots of money doesn't mean you make a profit.
ReplyDeleteGood for you! And thank you for doing this.
ReplyDeleteAwesome exercise...you are a twinkly star :)
ReplyDeleteI hope some of the smaller vendors sit up and take notice... !!
I shall play along...
xXx
I am sooo pleased to se this addressed. It is something I have wondered about for a long time. I attend these shows as a punter and often look at some of the stands just after opening and wonder how on earth the sellers can make enough profit, with what they have on the stand, to cover their costs.
ReplyDeleteI do a small local fair every christmas, a table is £10 + 10% of what you take. The last 2 years I have made about £5 profit on takings of about £100. This is OK for me as it is not a business, just a hobby, but for those who are trying to do it as a business.........
I am sure this is going to be really useful for lots of people. I hope it won't put them off doing shows but it will at least mean that they go into them eyes wide open. :)
ReplyDeleteYes, nice to see this addressed. When you add it all up it's shocking
ReplyDeletehow little you make really. I looked upon my last show as advertising really
and it was worth doing in that respect, but what a bloody expensive exercise!
I'm just embarking on my own business, in ceramics, not yarn. But I have worked out the costs of a mug sized item, and the kiln maker worked out the depreciation of my kiln and the cost of a mug sized item too. He was excellent. I know exactly how much it takes to make each item, and how much I need to sell each item to make a profit.
ReplyDeleteIt was something we were taught at University to do.
This is such a great idea. I know in my real job my boss is acutely aware of profit margins and when we spend thousands on a fair we have to get tens of thousands of orders and new customers to make it worthwhile. It's so easy to feel yoiu made money when you have cash in your pocket but profit and cash aren't the same thing.
ReplyDeletegreat idea:) I wouldlike to see more shows where the costs are shared between the vendors maybe and then they know up front what it will cost them. A not for profit for the organiser. That was what I wanted to do til health took over. Organise an event at an acgricultural college as it tied in with the sheep etc, the costs being worked out and shared by the number of vendors. That way the admission would have gone to charity, kind of like a certain event that was supposed to do that last year in C:) Maybe less expensive venues but still with good access. I didn't go to Iknit but I know that if friends on rav hadn't mentioned it I would not have known it was on, no advertising. Rav adverts are essential but also guilds, fliers to vendors to give out and of course magazines. Free press doesn't harm either if you get a newspaper to do a piece on the event prior to it and of course radio:) Sorry have meandered on, blame the enforced bedrest and antibiotics:)
ReplyDeleteGreat exercise, and as previously stated, advertising can be freely done on various sites, RAV, facebook, twitter to name a few. On a smaller scale I am on my son's school PTA and we run a craft fair, we advertise in the local paper which is paid for, but we also let people know via our facebook page, local radio, posters in local shops, displayed in our cars and on our blogs. We find a more people come because of our free ad's rather than the paid for so its all about leg work and benefits in the long run. Its a shame that your profits aren't bigger as it is always a delight to see such wonderful stands at the various events throughout the year, but at the end of the day everyone has to make a living. Take care Nicky x
ReplyDeleteWell said Jeni - we don't do the shows that charge a high fee - it's just not cost effective for us! We try and price sensibly, this is our living after all, if only the other producers realized the way costings work!!! Hopefully you are getting the point across!
ReplyDeleteAs much as I can cost out my designing and production, shows are one part of the business where I know I'm missing things. Well said, and to reiterate, cash doesn't equal profit!
ReplyDeleteI agree with Deb, I just don't do shows unless I think I can make a profit on the event. This has to pay my mortgage. Some shows seem to think that the stallholders are like a bolt-on sideshow to the main performance i.e. the classes.
ReplyDeleteI absolutely love meeting customers and other sellers, but every single show has to earn its place on my calendar, and if it can't do that, I can't do it.
Hear hear! It's all to easy to get swept up in the excitement of having up your own stall at a show, but honestly, if we indies are to be taken seriously, we have to take the financial side of the business seriously too. My business is still small, so I've turned down a number of shows because the figures just didn't add up to make it profitable for me. Often I decided I'd rather enjoy going as a visitor (and inevitably spend lots of money on your stall :) Thank you for being brave enough to spell this out!
ReplyDeleteWondering about the same thing myself and whether doing the shows I do is a profitable way to pend my time. I don't do any of the big and expensive shows as I don't have the turn over to justify them. I look forward to your gizmo and to plugging in my figures.
ReplyDelete