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Step 1
Decide how much you are willing to work for per hour. Then decide how long it takes to make one craft item. If you work in assembly line fashion, make 10 items while timing yourself. Then, divide your time by 10 to reach a per item time period. If you want to make $10 per hour and one item takes you a total of 15 minutes, your labor cost is $2.50 per item.
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Step 2
Figure the total cost of supplies for one craft item. You probably buy in bulk, so you will need to take the price of each material and divide it by the number in a package. Do this for each material item that goes into the craft you are figuring. Once you have all the materials worked down to a per item price, add all the costs of what goes into making a single craft.
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Step 3
Consider additional costs. Consider time spent shopping for materials, or setting up your booth at shows and fairs. Add in other expenditures. You may need to figure these items over a month's time. Divide the total dollar number by the number of crafts you make in a month to decide on the amount to add to the price of each craft.
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Step 4
Look around at crafts similar to yours while you are at a craft show or fair. Are they priced comparable to your pricing? If they are priced less, you may need to reevaluate how much you will be able to earn per hour and still stay competitive in the craft market. If the prices are higher than yours, perhaps this means you can give yourself a raise and increase your per craft item price.
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Step 5
Increase staff. If your business increases to the point that you need extra help, you must work out the numbers to see if it will be financially beneficial to you to hire help. Remember if you are running a legitimate business, there are additional costs to hiring an employee than just their rate of pay. Investigate payroll taxes and procedures in your state. Another option would be to hire someone as a freelance crafter. Then she will be responsible for her own taxes. You will just purchase the finished crafts from her.
