Many decorators focus only on ink, paper, and substrate costs when determining how much is spent on production. This calculation leaves out all the overhead costs, including rent, power, insurance, phone, website, e-mail, advertising, marketing collateral, chamber and professional association fees, etc.
A more accurate calculation of production costs should include all the anticipated overhead costs for the year, including a desired paycheck for yourself. Overhead costs and your salary should be allocated proportionately to the price of your products to ensure profitability. If prices are too high after overhead and salary are factored in, then focus on reducing overhead costs or focus on increasing production so that the allocation of these costs is smaller.
-Jimmy Lamb, Sawgrass
