Whenever I am stuck for a post subject, one reliable default has been to write How-To articles about pipemaking. This is usually interesting to everyone, has many pretty pictures, and helps spread useful information. Today, however, I’m going to write a How-To that’s specifically for newer pipemakers, and it’s going to be dull as hell – No sexy workshop photos, none of that. What I’m going to write about is how important it is to know…
A) How long it takes you to make your pipes, on average, and
B) What your average hourly wages are per pipe.
You have to know this because if you don’t, you will go out of business unless you are so wildly overpricing your work that your income can easily accomodate your lack of planning. Also, you need to know this because it’s the only way you’ll know if you’re getting faster, and speed is important because as you learn to produce equally good results via more streamlined processes, that’s more profit for you and more competitive edge in your pricing. If you’ve never kept records of your average times on various pipemaking steps, you need to pay me $350 to come over and hit you with a rolled-up magazine, because it’s that important.
Right now, my own records start off here:
I’ve got a great big Excel file that I use to track our income and expenses, and two pages of this thing are dedicated to figuring out how much time I’m spending on what, between our various types of pipes. This can have a hugely beneficial effect – For example, for years I didn’t make a lot of Ligne Bretagnes because they were lower in average hourly wages than our Talbert Briars. I knew there was a pay gap there, and over time I calculated it down to my average wage per LB, AND what it needed to be to make equal money to a Talbert Briar. With those figures in hand, I knew I had to raise prices, and also exactly how much, because I didn’t want to overshoot or gouge anyone. IIRC, I ended up raising the average LB price from something like $119 to $136 – A small jump, but just enough that it bumped the wages on them up to match the Talberts, and it enabled me to make a lot more of them each year. Before, we made maybe 20-30 LBs a year. Now, we do about 100-130.
That pic above shows my time measurements for the first stage of a typical handmade Talbert Briar. If you’re new at this, I’d suggest breaking these stages out a lot more – Measure your average times spent drilling (So you can later compare your averages via lathe drilling, drill press drilling, and hand drilling), shaping, measuring, etc. The value of these initial figures will show up when you can accurately compare, say, the average times for 20 classical shapes turned on the lathe versus 20 freehand shapes styled by hand. Over my 15 years at this, I’ve mostly worked out the kinks in my process so I have a good idea what’s what, and these days I squish my steps into smaller lumps for a more overall comparison.
It does still help to keep track of times for blasts vs smooths vs rustics, though. The part of this that will bite you in the ass is the nest step, which is tracking all of your OUTSIDE-the-workshop time for a particular pipe:
That’s a bunch of extra time, there – From the photography of the pipe to the website catalog page write-up to the email inquiries, the actual selling of the thing to a buyer, the time it takes to pack it up and box it, all the way to the time spent driving it to the post office and writing Thank-You emails to your customer. (And if you don’t write Thank You letters to your buyers, you deserve to go out of business, but good customer relations is a whole other blog article…) All that extra time has to be figured into the price of that pipe.
A couple of things you’ll notice in that pop-up pic – I keep tabs on what percentage the “after workshop” work is to the total cost, and I also track possible wholesale wages based on easily adjustable wholesale discounts. I found out two things early on – I can’t afford to wholesale Talbert Briars to any dealer at the usual 50-60%, not without taking a whopping wage cut, but I can afford to wholesale Ligne Bretagnes. The workshop times for the pipes are sufficiently smaller compared to the after-workshop time that if I can eliminate all that after-workshop time by selling 20 of them in one lump to a retailer, I actually make the same amount of money because of the time savings. Ergo, now you know why we’ve been retailing LBs via Pipe & Pint these past couple of years!
The bottom line is, you have to know how much you’re REALLY making, and then you have to use that to figure out how much you need to set aside each month for taxes, and what you’ll have left over… So you know whether you really can afford that new car, or big-screen TV. AND you’ll know, as the years go by and your bills increase, how much more hourly wage you need to cover them, and just how much you need to raise your prices.
If you’ve read this far, congratulations! Just by reading this, you’ve already demonstrated enough regard for the important parts of your business that you’re 300% more likely to survive your first two fulltime years than the next guy. Go forth and make pipes!
Oh, and I lied – Here’s one sexy closing picture, at least.