You cannot use a multiplier for determining your price unless you know exactly how much it costs you to do business. It can’t be by the year, it can’t be by the month, it can’t be by the week or day – it almost has to be done by the hour. In other words, you have to know how much it costs to keep your store open by the hour. You need to know exactly what it costs to produce something with your overhead and what you want to earn with each employee by the hour. You can’t compete with your clients by coming up with a price out of the air – you have to know what it’s going to cost you.
Run your business as if there are enough value-added things in your business that makes it worth what it ought to be. Multiplying something out (i.e., charging $4 for an acrylic item that cost you $1) doesn’t always make you enough profit. You have to know what you spend and then what sort of profits you want to make.
—A-1 Awards
