There's an epidemic in pricing in women's work that I became aware of when I first started selling accessories under my design label 15 years ago: designers of beautifully made hand-crafted jewelry were selling it for $5, thus not paying themselves to make the jewelry, and maybe not even covering the cost of the materials. My accessories were sewn, and I lacked the patience to sit at a sewing machine to make them over and over again, so I always paid someone to make them, which I then sold on the website that I built myself. Designers selling on Etsy, at that time, had such low pricing, that my products wouldn't stand a chance.
Correction: I designed the website myself, and I paid a programmer to build it because I wanted it to look just so, and I couldn't code for websites at that level. That programmer has since become my long-time programming partner when I quit my day job to design and produce websites, so paying him was always part of the equation in any client work I won or accepted. Which is how I lost jobs on price, and even had friends get offended when I quoted them a price to build their websites if they struck out in their own business. This was in the days before DIY website platforms like Squarespace or Wix. Some friends expected me to give them my work, aka not charge my usual rate, and I couldn't because I had to pay someone to build it. It was guilt that I worked through over time.
Freebies and Indentured Designers
Designers around me could build all of their own stuff. Jewelry. Jackets. Websites. So they paid no one, and didn't factor this cost into their pricing. My accessories were priced higher than everyone else's. My checkbook cover retailed at $25. My jewelry pouch with 5 pockets, 3 earring straps and 2 ring loops was $65. A woman who I sought SEO advice from when I first launched my website suggested that SEO wasn't my problem, that it was my pricing. She herself, she told me, could make that jewelry pouch herself, and saw it usually retailing for $10 on the Internet.
Lots of the website SEO (aka Google) traffic I got, actually, was for patterns to make the products I designed. I can't follow a pattern, nor can I make one, so these searchers on Google could have fun looking for the pattern that I paid a woman stitcher to develop, as I wasn't about to just post it as a PDF on my website for anyone to copy. Even though posting a free pattern PDF is a great SEO trick because so many people search for it. Instead, to attract the people looking for freebies via SEO, I designed free desktop wallpaper, which did result in a commissioned piece once by a woman who wanted an illustration of high heels and bicycles. It was a flattering assignment, and I think I charged $75 for it.
Later on, after buying advertising with a reputable blog I followed, and getting subsequent PR for the exposure, my designs began to sell.The checkbook covers, and subsequent products like my "sexy sleepmask for travel" did sell on the Internet. Turns out, SEO and pricing wasn't my problem. Getting enough of the right people to my website was the problem. People who Googled "sexy sleepmasks for travel" bought the sleepmasks, and even a celebrity found it that way and bought one for his then girlfriend who he's now married to.
"You Don't Have To Work - I Can Support Us"
During my Morning Pages for my Artist's Way journey, a phrase bubbled to the surface that my very supportive husband spoke to me when we were engaged. I remember clearly where I was standing in our apartment, next to which living room piece of furniture. He said: "You realize that you don't need to work, and that I can support us. I want you to know that."
To many people, that statement is a gift. To a person feeling trapped in their job who really wants to paint and eventually sell their art, or to write and sell their book, this statement is a major support system to help make that happen. To me, it had the opposite effect. It was spoken in love and support, but tripped a money-earning blockage wire.
At that point, I paid for my own apartment on the 9th floor of a building in New York City. I proudly paid for it by my self - $1,750/month - and all of my bills. I had an ING savings account back then, and actively logged into my IRA account to fiddle with the investment settings - and even contributed to it! I was saving, I was working, and I had a plan.
When we got married, our joint returns unexpectedly bumped us into a higher tax bracket and we owed bunches of money in taxes because the quarterly estimates that I sent in each quarter were too low. The big tax return disappeared that year. They didn't factor in our joint filing which showed a lot of income.
I'm now on a payroll for myself, so that I don't have to send in quarterly taxes, but that "salary" is a pretty silly number, and is technically "poverty level" - I was told later by a banker who was considering me for a mortgage in 2008. Turns out $12,000/year is not impressive to a bank, even when you can write off most of your small NYC apartment because you work from it. He didn't care about the gross, which was $46,000, a number I was proud of and was the same number as the salary from the job I'd quit that year.
But the net, or my "Owner's Draws," led that banker to stop returning my emails. This is why I don't barter. The bank doesn't care how many massages you got in exchange for work.
Work as Choice - "You Don't Need To Work"
So what's with that phrase? Here is the discovery. When he said that, I was pretty jolted. I loved working. When you work for yourself, you usually love what you do. Being financially independent was a top priority for me. When presented with this statement, working became a choice. I don't have to work, but I wanted to work.
When I had my first child, all of my work income plummeted. Client work became very different. I wasn't emotionally ready for childcare, and everything changed. One afternoon I sunk to the floor of my kitchen, giving up, wanting to cry (ok, I probably was crying), and was encouraged by someone trying to help to "let it go...admit what you can and cannot do." But I didn't want to give up. I had visions and wanted to make them happen. I had ideas! A silly phrase a boyfriend once thought I was cute for saying.
Fast forward to now, and I have admitted to what I cannot do, and that means hiring people to work with me. I'm not giving up, and I'm making enough to pay them. But I'm not making enough to pay myself - no matter what the gross is. It's like a sliding scale of nothing. It's weird! The problem is in the profit margin, and not in the simple act of working and earning money.
Working in Secret - A Shadow Worker
After after my second child was born, I was digging out of that stuff, and was on the road to recovery when I learned I was pregnant with my third child. The reason I plummeted was because working became a choice. A choice I felt that I was making over my children. So I didn't want to choose it over my children, so I only did it in secret. At night. When they were sleeping during naps. In the car at Target if they fell into a car nap. I have inverters in the car so that I can plug in my computer. I don't work from the car on road trips anymore because truth be told, my husband wants to talk to me, and now that the kids are in my life, they'd like to talk to me too - and be given snacks. But I do still plan for car naps in parking lots.
Sophie's Choice - Work or Children?
In my Morning Pages, I explored the phrase "You don't need to work - I can provide for us." What happened? When I was "working," which for me was both being creative and earning money, I was choosing to not be with my family - a Sophie's Choice syndrome (for those not familiar with the heartbreaking movie/concept, see here). This explained why I did a lot of work in the bathroom while on family trips. Secret. When visiting my husband's family, prior to kids, I actually did carve out time to sit at Panera, but that was when I had a retainer with a client, and had deadlines to produce for them. It felt justified. It wasn't my work, it was client work.
PS: This is beginnings of the cobbler dilemma for service providers who don't nurture their own businesses, only those of their clients, but that's a different article.
The Need to Work
So if we had all of the money in the world, and I didn't need the money and I didn't need to "work", would I still want to leave the house and "create?" I would! I would still want to leave and buy fabric. Or leave the house and draw something. Or leave the house to - let's be honest - go to a fitness class (this is a very hard thing to do! will the children be alright? will my husband feed them or will they waste away into TV and chips on the floor? truth: they will be fine - even with chips on the floor and ants in pursuit). Or close my door and cut fabric and sew something. But, I'd still be choosing my need to create or leave the house over my family, and that felt wrong.
Sure I could sew with my daughter, but she actually wants to work the machine. My son also. So I'm not pressing the pedal of the sewing machine, I'm enabling their experience of the sewing machine, which is awesome, but I'm not actually getting to make what I want to make. I want to help them and enlighten them, but you get the picture. Sophie's Choice.
The Joy of the Sale
Leaving something to create for yourself is not wrong. What I'm discovering through my Artist's Way, is that tapping into your creativity is inherent and necessary to live a sane life. However, one may feel the need to justify it with a sale. So a necklace gets priced at $5. A logo design gets priced at $50 or $350. Just so that it can sell, and the designer (or whatever industry) can say that they sold something. And then when I give my price of $3,500 (which includes paying my designer who specializes in logos and paying my producer fee for me - but still - logos are valuable even if I were to design it and involve no one), eyeballs fall out of their heads. Unless you're getting that number from an agency who has an office and people on staff, and then it becomes $10,500 and it's called "branding."
The epidemic is in the thrill of the sale - for any number - and it brings the pricing down for entire industries because people expect to pay $5 that took hours to make, and years of experience to make it special. It's the same as China pricing. Etsy pricing is China pricing. And Etsy isn't bad! It's a great platform to find wonderful things. It's the people who are pricing their things who need to up their game.
Women (might) feel that they don't "need to work" financially so won't charge, even though they do "need to work" to stay sane, and then charge nothing for their time. Women who work for themselves, but pay themselves half or nothing, and indenturing themselves.
My revelation was that money didn't factor into my guilt for leaving the house to "work" or to go create something. I was going to feel guilty anyway. The Sophie's Choice - kids/family or work? Since money didn't matter to my level of guilt, it suddenly disappeared. Of course I'm going to work! It keeps me sane, and I want the income! I want to contribute to my IRA again! Why wouldn't we want to deposit money into savings? Why wouldn't I want to pay into the mortgage? I get so excited when I do, because it's something that is very important to my own core values.
"I Didn't Go Back to Work Because It Cost the Same as Childcare."
Right - and when you do the numbers for all of the mothers work that you do - the primary care-giving - you're making about $5,000 a month. If you die, someone's going to need to come in every morning and wake the kids up, get them dressed, take them to school (or play with them if not in school yet), run to the grocery store, pay and manage all of the bills (which isn't as simple as just paying them - you may need to chase those bills and figure them out), then get the kids again, make dinner, and put them to bed. That's if you have a commuter husband like me who leaves at dawn and comes back after bedtime.
So yeah, you need that life insurance policy! Don't let your husband tell you that all is fine if you die - he'll make it work. He'll be facing a wall of expenses that he or anyone wasn't paying you before. Just searching for the child care replacement of you will take his time. This is why I have no issue with paying myself in pedicures. Or clothing purchases. Or having a life insurance policy.
"What Do You Need an LLC for?"
This phrase was another Blurt from a Time Traveler that emerged during my Morning Pages for my Artist's Way journey ("blurts" and "time travelers" are Artist's Way phrases). When I hung my shingle, I wanted to higher a lawyer to form my LLC because I'm just not that good at following directions on how to do that. This decision was questioned by someone who loves me and didn't mean anything bad by it, but couldn't see why I would need an LLC (the reasons why are a whole 'nother article...trust me...you need one if you're going to sell anything).
One reason why you need an LLC or SCorp is because you need a salary. You're not write-off. While it may be appealing to accountants or spouses to write off the expenses from your work ("we can write off your car!"), and keep your income low so as not to add to the joint filing, that must not feel very good to you as a person. It trains you not to want to earn more income, and trains you that your working amounts to expenses - negative.
Prior to 2010, the federal government sent out Social Security statements in the mail. It showed how much social security you were going to get based on your income. If you had a full time or W2 job, this is pretty clear. You're getting money back in social security. If you worked for yourself and never paid taxes, only hid them as expenses in your family tax returns, you're not getting any social security from your own earnings. You might not believe in Social Security anyway, but the concept is there - the monetary value not put into your work, is also monetary value not put into your future savings.
Pay thy self. You are not a write-off.