Business with Evy’s Tree: Knowing Your Worth and Hiring Help

Hello again friends! Did you see last week’s Handmade Business post? If you did, you know that I don’t consider myself an expert on any of this business stuff at all, but I have learned a thing or two that has worked for me since starting Evy’s Tree….so I figured it wouldn’t hurt to share it. :) Hopefully all this helps some!

Also, if you read last week’s post, then you should know how to figure out your profit margin. I had several people ask me questions that sounded identical to this:

“How do I know how much to pay myself per item? What is my worth?” -Anyon

This is such a good question, and a hard one too. Especially if you are working/or have worked a high paying job. When I first starting doing my hoodies, I was appalled that a college educated professional might be working for minimum wage, which was what I was making there in the beginning. I was earning a large amount of money per hour before I quit my job…and it was taking me an hour to make one hoodie, so I naturally thought that I should continue getting that large amount. Here’s the problem with this one: If you charge  per item what you are accustomed to being paid, you may never sell it.  Let me explain…let’s say I charged $40 an hour to make one hoodie. Let’s plug that into the COGS from last week:

You can immediately see the problem here…there is no way I could charge $35 for a hoodie {which I don’t anyway, ha!} with my labor at $40. I could charge $48 for the hoodie, and count that $40 as my profit margin, which would probably be fine, if you didn’t want to grow as a little company.

When my Dad came over and found me sleepless, cranky, and surrounded by unfinished hoodies…he immediately sat me down and gave me the “You will never grow if you don’t get help” talk. It was a scary talk indeed. Hand over my well loved product to someone else to complete? Trust others with my patterns? PAY someone to make them when I wasn’t even making any money myself? These were all thoughts that drifted through my tired, overworked mind. And I am sure you have wondered the same thing.

I think it boils down to this….the first step you must take before you hire any help is a mental one. You must decide how big you want to grow your business. If this is just a creative outlet for you and you don’t want to really make any money off this, then I suggest you stop reading this post, put a pot of coffee on, relax knowing you have a fun little stress reliever that can fulfill your creative dreams and thank God that you don’t have to worry about the money!! :)

But if you are wanting to make this a money maker, then I would read on.

“How (not what) do you pay the people that work for you?? I run a small hairbow business and the reason it has stayed as small as it is that I can’t juggle it all single handedly, house… Mom… Homeschooling… Church functions. How do you determine you can trust their judgement when the products they are making will have your signature on them?? I have a really hard time thinking someone can make them with my level of standard.. And I want to change that, terribly!”- Sarah

Well, here’s the truth: I would never, ever, ever be able to run this business on my own. NEVER. Here’s another truth: Evy’s Tree pays my employees more often than it pays me. That is how strongly I feel about having help. Yes, I might not make a lot of money at times, but at least I’m not a freaked out stress case who doesn’t sleep at night due to the massive sewing pile that sits next to my sewing machine.

Here’s the first step to hiring help:

You must decide where you need the most help and find someone to assist you there. When I first started, the area I needed the most help was sewing. So I hired a seamstress to work as an independent contractor to help me sew one style of hoodies. This seamstress was the first one I ever hired and she still works for me. She is amazing. The second person I hired was a book keeper. I am HORRIBLE about keeping track of my books and I knew that I needed someone to help me see my bottom line. She also works with my accountant and makes sure I stay legal with all I do. My book keeper is also amazing and she too still works for me.

From that point on, I hired a couple more seamstresses {to the point that I don’t do any sewing anymore} and a part time assistant to help me around the studio, {ie, shipping, cutting, inventory, etc.}. Oftentimes my nieces will come in and do odd jobs, even piece work for me, to make a little extra money. Even with all this help, I still work full days most weeks, there is just that much to do. And not to mention, I am a mom. Kids always make life more complicated. :)

My two nieces and their friend Maddie working for Evy’s Tree.

So back to Sarah’s question: “How do you determine you can trust their judgement when the products they are making will have your signature on them??” How can I just hand over my beloved products to someone I may not know very well and get the products completed properly? Well, you have to have a little faith. You have to be willing to try them out…and let go. Here are some steps I take in hiring a new seamstress:

1. Pray about it - I ALWAYS tell the Lord what I need and allow him to lead me.

2. Ask around- When we lived in Stockton, we were lucky enough to have a large circle of church friends. I always put it out there first. It will surprise you who is crafty and who has a little extra time on their hands.

3. Ask for references- Speak with people who know them. If you don’t know anyone who knows them, ask for their last job and speak to their supervisor.

4. Have them sign a confidentiality agreement- These people are going to learn the ins and outs of your business. You want to make sure you can protect yourself. A simple confidentiality agreement states that they will not sell your products or give out info about them while working for you and for X amount of years following their termination with your company. Here is an example of one.

5. Ask them to complete some samples- Give them several samples to finish and critique with them present. Make sure they understand what they did/didn’t do and judge their ability to take constructive criticism. The last thing you want is someone who isn’t willing to learn or change.

6. Leave the sample period open ended-Let them know that you are giving them a sample to test their work but to also give them a chance to bow out gracefully if they don’t like what they are doing. You want them to enjoy it too, not just you.

7. Decide how much you are going to pay them and when- are you going to pay by piece? If so, how much will you pay them? {we’ll cover this in a second} How often will you pay them? Through what medium? Make sure you cover all these things and they agree to it before you hire them.

8. Find out their limitations and any other facts you may want to know about them- Limitations might include: kids, another job, sick family members, church agreements. You need to know how much time they will put into your business and how fast they can turn things around.

9. Remind them that the first sample they do will take them at least 3 times the amount of time it will normally take them- This is a big deal. I had a seamstress that would always panic when it would take her several hours to do one new hoodie. My answer to her was: Do 5 of them in a row and then call me back and we’ll talk. Never fails….by the time they had reached their 5th one, they had cut their time by at least 3 or 4 times the amount it took them the first time. REMEMBER: Consistency = efficiency. The more they do one product, the better they will get at it.

Sarah’s question again: “How (not what) do you pay the people that work for you??

I pay people all sorts of ways. Some people I pay by piece {which I would definitely recommend for piece work such as product}, other times I pay by hour, it just depends on the job.

My nieces doing inventory for me.

To pay by piece {which works with the COGS sheet above} I figure out how long it will take someone to do a piece and then divide that by 60 minutes and multiply it by the hourly wage you would like them to make. So your equation will look like this: {time/60} x hourly wage= piece wage. For example, if it takes someone 15 mins to finish a product and you are paying them minimum wage, your equation will look like this:

{15/60} x $8= $2.00

So you would pay them $2.00 a piece. For all my independent contractors, I ask them to keep record of what they do and I double check it on payday. I use those handy dandy record books above, they are so helpful as I get a copy, they get a copy and I can submit one copy to my book keeper. AWESOME! :)

And to answer the last part of Sarah’s question: “I have a really hard time thinking someone can make them with my level of standard”…

Yes, this is VERY hard. Here’s what I recommend about that. BE FLEXIBLE. Allow them to make mistakes and be willing {and brave, ha} to tell them when they aren’t working up to par. Inspect EVERYTHING. Understand that you will have an oops bin, and that is ok…put all those oops in there and sell them as is with a discounted price. Be patient. I promise if you give people time, most of them will exceed your expectations. My seamstresses are WAAAYYY better than I am when it comes to these hoodies. They have to tell me how to make them now! :)

My neice making flowers with Evy. My niece makes the best flowers EVER!

I hope this helps some of you!! Please feel free to ask questions in the comment section! Any suggestions on what you would like to talk about next week?

Big hugs to you all!! xoxo

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