designing an mba

more profit = more to give

For the record, I think there is nothing wrong with wanting to build a profitable business to create a comfortable living for yourself and your family.  (Provided that you are doing this in an ethically and socially responsible manner.)  But I also know that is is an area of thinking where many of us struggle.  If the idea of making more money for yourself is hard, why not consider it from this perspective:

The more money you make, the more generous you can be.

There has been a lot of talk around the creative community about creative tithing, and a few of you even brought it up in the comments of yesterday’s post.   This is the idea that you would take 10% of your income and spend it on products from craft and indie businesses.  I love the idea that we all need to support each other, and I think for many, the idea of being able to support other indie businesses is one way to put the pursuit of profit into perspective.  And of course, it doesn’t have to stop with indie businesses.  There are plenty of charities and social causes that you could also earmark some of your profit for.

To give you a few examples:

Let’s say that your business makes $20,000 in one year.  (And I’m not talking about gross sales here.  I’m talking about pure profit.)  So if you make $20k a year, and you’re trying to spend 10% on indie business, or donating to charity, or anything else that makes you feel good, you’ll be spending (or giving away) $2,000.  But when you only make $20k, giving away $2,000 can seem difficult.  It leaves you only $18,000 to live off of and put into savings.  And when you’re walking such a fine line, it’s easy to sometimes spend that $2,000 on other, more pressing bills.  (Like emergency root canals.)

Now what if we doubled the amount of profit to $40,000 a year?  Giving away (or spending) 10% leaves you with $36,000 to pay your bills and support your family.  That feels a little more comfortable AND you have more money to spend on the businesses and causes that are important to you.

But what if we multiplied that original number times 10?  What if you made $200,000 a year?  That 10% (or $20,000) would still leave you a very comfortable $180,000 to live off of.  In fact, you could give away a much larger percentage of your income, and still live very comfortably.  Think about the other indie businesses, charities, or anything else that would also benefit from the increased profitability of your business.

I realize that a lot of you are looking at that last example and thinking, “But Megan, I could never make $200,000 with my crafts business.”  To which I say, “Why not?”  Part of creating a culture of profit in the crafts community is confidently expressing your desire to make a significant profit.  I know I would love to make $200,000.  I’m not there yet, but I’m letting myself get comfortable with expressing the idea that I will get there.  And when I do, I can’t wait to spend a significant amount of money supporting the indie businesses and social causes that I’m passionate about.

So the next time you feel uncomfortable about about your desire to make money, make a list of al the worthwhile things you could spend that money on:

  • Other indie businesses
  • Your children’s education
  • Charities and social causes
  • Anything else that’s important to you

Make a list, a collage, or some other visual reminder and hang it somewhere prominent in your office or studio.  Use this list as your inspiration to pursue greater profits for your business.  When you think about making profits, don’t just think about making profits for you and your company.  Picture the people, businesses, or causes on your list as other partners in your business.  Now go out and embrace the idea of making a profit for yourself and all your business “partners.”

31 responses to “more profit = more to give”

  1. Steph

    Oh my gosh, LOVE this post. Seriously, I love it.

    I started my business just for fun, really. I make enough money at my day job to live comfortably, and I only turned making jewelry into a business because I thought it might be a good way to make extra money to chuck into savings. The idea of donating part of my profits to charities came later, and I really have no idea what I’d realistically do with the money once I (hopefully!) start drawing a regular salary.

    There are so many indie businesses I’d love to support, but I only have so much money to spend. Now I know exactly what to do if/when I start making a decent profit from my business. :-)

  2. Dora

    Ive never made enough to call it a living, but I’ve always tithed to my church or given to Gideons International. It seems that the more I give, the more I make. I really enjoy reading the daily posts, and gotten a lot of good information on here. I hope I can put some into place and watch my business grow.

  3. lara

    This is a great way of looking at the whole money making issue… it also brings to mind that if we are all earning and tithing, that there is no reason for everyone to profit and support local independent makers and doers… what a brilliant concept. I have just increased my ‘dream’ wage by 10x… :)

    1. tara gentile

      lara, i just wanted to give my own personal: WOOT! to you for increasing your dream wage by 10x.

      it’s not a “dream” if it’s within reach. set it high and be unapologetic AND work towards it everyday.

  4. Dave Doolin

    This is an incredibly important point.

    I have tithed before. Strangely, when you work hard to make the tithe as a matter of duty and obligation, the rest of your finances seem to fall into place. I don’t think it’s a magical result of the tithe, I think it’s a by-product of the process, the struggle.

    Another very interesting aspect to all this is that there isn’t much of an economy selling cheeseburgers to each other (this is an ancient reference to service economy discussions in the ’80s). However… if we use money gained *outside* the craft economy _inside_ the craft economy… we don’t lose that money. Sure, we’re passing it around among ourselves… but what’s the option? Pass it to Walmart?

    I hope I’m not being overly forward here, including myself in the discussion. I’m not a crafter, but I am a coder. And what’s happened to software is almost identical to what’s happened to craft: all outsourced. So I feel the pinch daily.

    1. tara gentile

      dave, i love that you brought up how outsourcing affected your industry as well. we are ALL to ready to reinvent the wheel when it comes to the handmade movement. it’s so important for us all to remember to learn lessons from what has come before – rework & reinvent them, sure – but LEARN.

      i think this is what megan’s so good at!!

      yay for such an awesome conversation.

    2. Kristen

      Really liked your post, Dave. Sometimes I feel apologetic that I don’t work as a full time artist, but after reading your comment and realizing that I am funneling money from outside the arts and crafts community to inside every time I support an artist, it made me feel really good. Never thought about that before!

      -Kristen

  5. Alisha

    A timely post, as the company I am working with has elected to donate 10% of our profits to charity. I think it’s an incredibly responsible and soul-nurturing thing to do :)

  6. Gina

    Great point Megan! I have a target amount of money I want to make and it’s high. I am not ashamed because like you said, if you are making money in an ethical and socially responsible way, then there is nothing wrong with that.

    Thanks for the continued inspiration and ideas.

  7. Courtney - Meylah

    This post made me think of Jack Johnson. I personally am a big fan of his tunes & today I noticed on his new cd that he is part of the 1% of the planet movement, http://www.onepercentfortheplanet.org/en/, it looks pretty awesome. I’m looking forward to researching it more, but it’s wonderful to see ways the various ways for artists to give back. I love it.

  8. erin rogers pickering

    Megan – I just found your site the other day and spent a good part of yesterday mornings reading as much as possible. Fantastic stuff!

    But this post was like an ah ha moment for me! First, I never considered myself an Indie business, but I am – and I love that term! Feels great to describe my biz that way.
    And I realize I was thinking small — too small. And your words just flipped the switch so my dream wage just got multiplied by 5. And that feels great too.
    Thanks you!!!
    Erin

  9. Wendy (Bags Of a Feather)

    A post near and dear to my heart! I have been involved in parrot and bird rescue efforts for years, and 3 of our current flock of 5 are rescues, (including our macaw who was confiscated in a police raid on a crack house). I give 10% of my sales to a rescue group, and truly believe it is absolutely the right thing to do. I am not at my “dream wage” yet, but I know I will get there.

    Paying it forward is something that will come back to you tenfold!

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  11. theresa

    I find your articles encouraging and fantastic. It gives lots of us more confidence when it comes to pricing our products accordingly. And it does take sometime to digest and implement it. I already changed some of my pricing after having discussed with a friend who owns a bakery business.
    The thing that still confuses me is how do you count your hourly wage? I do have 3 staffs who are working for me (sewing, cutting & finishing) and my part is doing patterns, fabrics searching & designing.
    I’m completely in the dark when it comes to how to measure monetarily the latter part.
    Will you have an article about this as well?
    It will be wonderful if crafters community can grow big enough so as to be able to compete and challenge bigger brands, manufacturers, etc…
    I hope that day will come for all of us…!
    :)

  12. Kristen

    I appreciated this post very much as someone who struggles with pricing and profit. I have a really hard time putting a dollar value on what I make and figuring out what it might be worth to someone else, and am always scared that I will price too high. And somehow I feel guilty for making money on artwork and crafts (and for some reason I don’t feel guilty at all making money at my day job! go figure!). Is artist guilt normal? This post is helping me realize that feeling guilty about making money as an artist is not really helpful to this community in lots of ways. Hmmmm – good stuff to think about!!!!

    -Kristen

  13. Carri

    I really appreciate this conversation. I am constantly having this debate with well meaning friends and family about my art and my pricing. Their argument to me constantly is ” well someone else will make something like you and sell it for less because you’re too expensive” … I don’t see it that way. I know what I put into my work, with materials, time and yes, love. I price accordingly. Hopefully if we all price our work as it truly should be valued, then I won’t have to keep having this debate with my family and friends! =)
    Thanks!

  14. Cathy A

    I find this to be a wonderful idea and timely for me in a personal way. I’ve tried selling handmade items, but I ended up selling things for too little money and I was making no money, and possibly losing a bit. I find it discouraging when people within the same community try to compete by offering the lowest price and pricing everyone else and then ultimately themselves out of business. Then everyone loses. With a practice that you are promoting, everyone wins instead.

    (And I love, love, love Jack Johnson for some many reasons.)

  15. Katie

    This post has given me something of a break-through moment!

    For years now I’ve been struggling with two conflicting impulses.

    On the one hand, I want to and feel I ‘should’ (its always a bad sign to hear the word ‘should’ in your head) continue my commitment to the charity I work for full-time and the difference I make in the world through that work. I do love that work, but it’s not the only thing I want to do with my life.

    On the other hand, I desperately want to develop my creative work. But that idea always gets crushed as being both self-indulgent and on a highway to nowhere financially.

    The concept of tithing – to charity and/or back into the creative community – gives me the permission not only to pursue my creative goals, but also to make money from it (real money even!), and to contribute back to others in a real and significant way.

    This has broken through about 15 years of repression – ever since high school when I abandoned my plan to go to art school and instead went into the health professions.

    That is quite a big step. Your posts on profit have been spot on for taking timid creative souls like me onto the next level. Thank you, and keep at it!

  16. Jen

    Finally getting to the last of the profit week posts (well…not the last… but pretty sure the last one I’d not yet read). Megan, you are a brilliant woman with a mindset more artists and people in general need to embrace. I’ve gotten into all sorts of trouble for being an evil, capitalist-minded swine, but you are right: when I (or anyone else) make more money, I can spread it all over the place with far more ease! To other businesses, to favourite charities, and of course to family & friends in need of financial help, whatever. Small donation or not, well given, every little bit will indeed count.

    Some of the wealthiest people I know and know of are also the most generous, though not braggarts regarding that fact.

    It has also long been my belief that generosity with one’s earnings translates into greater success (in fact, it’s in the Bible, should one be so inclined as to believe that). Regardless, the joy one gets from helping others is worth far more than the money and/or goods given! BRAVO to you for this post.

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