Tuesday, February 16, 2010

the business end

I've been writing about making pottery a business, and I hope all of my intelligent readers know that these points can be applied to making any art a business. Today I'm going to write about something that will probably make 99% of you squirm in your seat a little bit, send a flash of guilt through your brain, and then leave you feeling a little bit inadequate. I'm referring to running the business end of things, and I feel confident in saying that most artists want to concentrate on making art, not running a business.

I have had many struggles over the years in making the business a priority, and one that I could manage without wanting to start screaming and crying. I've fucked things up pretty bad in the past, and I finally had to give up and call in Mommy to clean up my books and make my invoicing system work. I have learned a lot from my experience over the years, and here are a few points to keep in mind:

1) It is never too late to learn how to make your business run. You may have put yourself in a corner where you have no idea how much money you are really making, if you are overspending for supplies, or what your production costs are. You may feel that keeping your head in the sand has worked for you for many years and there is no reason to change at this late date. There is reason, and the reason is that no matter how successful you are right now, you could be even more successful if you had a handle on your numbers. Why? Because the deeper understanding you have about your business, the more you understand how to make your money work more efficiently for you. And running a good business means just that: efficient use of your limited resources.

2) Never fall for the "I'm an artist, not a businessperson" line. Being an artist means being curious, and also multi-talented. If you want to support yourself as an artist, then you must be curious about how to do that. Turning the business part into a headache is self-defeating; instead, try to look at it as a question that you are trying to answer through learning and research. The question is, "How do I make enough money to support myself?" Answer it by learning Quickbooks, balancing your checkbook, tracking your expenditures and sales, and paying attention to your bank balance. Now that I do these things regularly, I've actually convinced myself that it is fun.

3) It is never too early to learn how to make your business run. I think a lot of artists are so overwhelmed and excited when they first start working for themselves that the idea of slowing down and figuring out the numbers just seems like a big drag. The longer you put it off, the bigger drag it will be as the guilt and procrastination accumulates. Even if you are only selling a few things a month, taking the time to log it all in, run the numbers, and see where it's all washing out sets you up with some good early habits that will pay off, and gets you comfortable with numbers, especially as they get bigger and bigger.

4) Taking yourself seriously as a business is a call to the Universe to take you seriously too. Yes, I live in California, so I have to bring the Universe into the discussion. Not only will the Universe take you more seriously and send you more customers-- no snickering-- your customers will sense your confidence in your art and your business and feel more sure in purchasing from you. Most people love seeing artists make it, and they love supporting that success. Running a solid business makes your success shine for everyone to see.

5) Ask for help. I am not a born businessperson, and likely you are not either. But there are a bunch of people out there who are, and they are dying to help you. Talk to your banker, take a business class, ask a friend to teach you quickbooks, hire a bookkeeper, read art-based business blogs for tips and support. You are not alone, or hopeless. No matter what your business problem may be, someone out there can help you figure it out.

Also, remember this: Nothing and nobody is perfect. I don't run a perfect business, and I still have a lot to learn. We all need to take steps to be better business people, and we will all have our failures while we take those steps. Don't stop because it's not perfect.

80 comments:

  1. What a great post! This year I vow to take a hard look at my actual cost of goods and stop pricing it based on "feelings". I know I undersell myself often. Thank you for the reminder!

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  2. Yes, that is how most artists price their goods, so you are not alone. But when you know why something is priced the way it is because you understand the cost of making, you won't feel bad or unsure of the higher price tag.

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  3. really.....thanks a ton for taking the time to put this down. i wish that we would all share more about what works and help one another tackle the business end of things. i'm 10 years into full time clay and just getting down to the nitty gritty of number crunching. i totally agree that customers can sense the confidence that comes from an artist who has their financial act together. amen sister...keep it coming.

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  4. Thanks so much for the awesome blog series.
    At this point in my pottery career, I would be happy just supporting my operating expenses. There’s a part of me that is afraid to tally up what it costs me to make and sell a piece of pottery. I’m probably just about giving it away… But in the same breath, don’t we all need to start somewhere?

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  5. Thanks Whitney! Really good stuff. I have taken the plunge this year and hired an accountant to do my taxes. (with urging from my wife, who also is an advocate for the Universe, she's not from CA though).

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  6. As usual...excellent info and very well written! It applies to many types of artists and other businesses as well.

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  7. Another good post. Yes, most artists don't have accounting and record keeping in the forefront of their creative brain. But at least help yourself STAY in business doing what you love and do the basics -keep ALL receipts (stuff them in a big envelop if you have to), open a business checking account and track your spending but most important PAY YOUR TAXES...

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  8. Thank you so much for this post. I love how direct and honest it is. I haven't done the number crunching - except at tax time. You just inspired me to go out and learn one of the accounting programs on the computer and get my stuff together. Thank you!

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  9. I like that vase in the picture. :)

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  10. Thanks Bren-- is that a hint?

    And it thrills me to my tippy toes that I inspired someone to get their accounting act together. Congratulations Elisa!

    And Cindy, "There’s a part of me that is afraid to tally up what it costs me to make and sell a piece of pottery." You don't have to be afraid, it's just information that is useful for you to know, and the truth is going to be there whether you acknowledge it or not . If you are not that concerned about making profit, just paying your costs, then you need information to do that. Fear is a great tip-off to your conscious mind that there is something there for you that needs exploration. Don't back away.

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  11. Thanks Whitney,
    I'm just going through a new product phase, and this was the perfect time to hear this!
    Pricing what you make is a tricky and sometimes illuminating task.
    It shows me what I think I'm worth, and what is real!

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  12. beautifully put, thankyou!
    am doing the bakery 6 wk business course as i was sick of asking myself the same series of bus-related questions and never getting any answers {from myself!}, building up a cycle of guilt/anxiety etc
    feels good to be learning!

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  13. Whitney: How do you put a price on your time? Material cost is easy, but I always struggle with time. My time in the studio is limited, so it's not so easy for me to crank out work, but I don't want to underprice (or overprice) my work!

    Thanks for the frankness in your post! Love it!

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  14. Whitney, thanks for the sensible and honest post. Your advice is always great to hear, and I think it helps a lot of us who experience this aversion to the challenges of running a business. Thanks for taking the time and for sharing your thoughts and experiences!

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  15. Putting a price on your time is really hard to figure out. You can't really do, say, $15 an hour because while that may cover your "life" it won't cover the overhead of running a studio. You really have to spend some time thinking about it while also considering what you think people will pay for your work-- your skill level has to come into play too.

    Underpricing will hurt your sales, as will overpricing. I will often pass on items I think are underpriced because I assume there is something about it that makes it less valuable that I can't see.

    I have always pushed the envelope on pricing, and I'm always ready to explain to people why my work is "expensive" though I rarely encounter that question anymore. The question you REALLY have to avoid is "How long did it take you to make that?" If something is $40 and it took you 30 minutes to make, then people assume you are making $80 an hour-- and we all know that is not true!

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  16. YES, SISTER! Thank-You! I'm taking a deep breath and resolving to keep it real this year.

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  17. Wonderful post and spot on. I help tons of people with their small business issues and the excuse I always here is that "I just want to focus on the art." You really can't do that and expect to be successful.

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  18. Whitney, Thank you so much for giving me the nudge I needed.
    I recruited some expertise from my CPA Daughter. 13 hours of number crunching and creating spread sheets. I now know exactly where things stand. What an eye opener.

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  19. Congratulations Cindy! And how lucky are you that you have a CPA for a daughter?! I didn;t make my fist spread sheet until last JUNE, 13 years after I started selling pots, so you are way ahead of the game as far as I'm concerned.

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  20. thank you for this post. i've been thinking along these lines lately, but you really clarified the thoughts for me. i'm a little scared to do it but i guess it's time for me to do some number crunching.

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  21. This is really great! Thanks so much for laying it out -- I am slowly but surely getting more organized, and praying it will pay off...

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  22. LOVE IT! BTW, I'm in New York, but always bring the Universe in to it too, lol.

    I definitely agree that the Universe will fill the gap, being an unbiased source YOU/WE have to tell the Universe what we want.

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  23. We all need a "mommy". My mother is a goddess and is gifted in supporting artists (for example, me) but I am happy to share her contact info for people who need a surrogate mommy who will kick their ass, teach them how to use QuickBooks, and coach them into a more efficient artist lifestyle. She ain't free (unless you can call yourself a daughter) but she's good.

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  24. love the way you write...practical & down-to-earth. john & i have to go thru a bookkeeper for tax prep anyway because we own a house together...this was the first year (3rd yr. in business)where i actually started to "get it"...why i need to know my inventory & why i should get rid of my old stock.

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  25. Love your take on this very sore (for me) subject!! I've just recently been trying to get my head in the right direction (tax time right now and it feels like hell!)
    I've spent a week now just trying to find all my papers, receipts, etc--and have vowed it won't be like this next year!! Love your blog on the subject!

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  26. i needed to read this this am ...as I sort thru boxes or mismatched receipts for tax season ...lol

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  27. Great post. One site I discovered recently is Outright.com - a free site where you can track expenses and payments. It's a simple system but I can track my supply costs and sales and see what my profit or loss is.

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  28. Yes, i just checked out Outright.com, a very interesting resource.
    http://outright.com/

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  29. Great post! And how true! I´m still squinching when I think about having to sit down and work out all the cost and expenses.

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  30. Thank you for your most excellent blog post on the business side of art.

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  31. Oooh, this did, in fact, make me squirm a little. I needed this SO much. Your blog was listed on Etsy and I'm so glad it was. Thank you!

    P.S. I didn't snicker at the Universe stuff...loved it!

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  32. What great advice. Thank you. Good food for thought. x

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  33. beautiful work!!

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  34. Awesome post! I've been focusing a lot more on the "business end" of my art site over the past few months and this type of advice is exactly what I need. :)

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  35. What great advise. The value of an artists time and their unique talent should be the basis for the true cost of art and not the supplies and tools. Thanks

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  36. Great post! Thank you for the encouraging words. I get scared when I spend too much time crunching numbers or doing research and not creating. I keep telling myself that the "back end" has to be taken care of too, but your post helped me to truly believe that!

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  37. Yes, I used to get so pissed off when had to spend a day doing office work or paper work. But I have convinced myself that it is all my job, the creating and the managing. One of these days all the jobs will be farmed out to professionals while I go on inspiration trips to Italy, but for now I do it, and it's just as important as creating. Resenting it is a waste of energy.

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  38. what a great thing! thanks to guide us about the actual cost of goods.

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  39. Hi Whitney, what a great blog! I love all of your creations. You're words are very inspiring for me to get my shit together!

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  40. What a great blog.

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  41. pricing things based on cost and the true value of your time may just help you think more creatively about how you can be more efficient or conservative with time and materials to help the price reflect the true value of the work and what you "feel" it should cost.

    artists who undervalue their work do the community of those who NEED to accurately value their work a great disservice by devaluing the entire market.

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  42. Thank you! That was just the talk I needed to get me to actually use those receipts I've been tucking away to take a good look at my business and whether I'm in the black or not. I agree completely about the universe - those positive intentions make a difference. Thanks!

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  43. Thanks Whitney, for being so candid. A few months ago I vowed to be realistic about my pricing and not turn away from the nitty gritty numbers, so reading posts like yours really cheers me on. Great to find your blog!

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  44. awesome, awesome post. And Etsyshop!!! Very inspiring and after doing this years taxes a little less chaotic than last year and much faster I totally agree with you: the more you know the better you do.

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  45. Great post and good advice, thanks!

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  46. "artists who undervalue their work do the community of those who NEED to accurately value their work a great disservice by devaluing the entire market."

    Yes, I agree with this point. I have a good friend who makes AMAZING work and lives in a sparsely populated area near a very famous potter whose prices are very very low. It makes it very difficult for her to get more than $20 for a mug, even though she would easily fetch $50-70 in the Bay Area. This is an extreme example, of course, but sometimes it really kills me to see a 14" bowl selling on etsy for $15.

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  47. Loved your post. I'm also learning how to run my business and I know how hard it can be. Thank you for being so motivational :)

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  48. Thanks for your honesty and wisdom. I think all of us artists struggle with this. Your ideas were great. It motivates me to get my act together. Are you teaching a boot-camp for that?

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  49. this is some great, honest advice which is hard to find. i love your work and even featured you on my blog today, before I had even discovered yours!
    -kat

    you can see it here:
    http://heartandcrafts.blogspot.com

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  50. Awesome post and one I need to hear over and over. I am having difficulty trying to make my Etsy store sell more and teach high school at the same time. I have GOT to learn more the business end if I want to handle bigger numbers. Thanks!

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  51. Great advice.
    I have finally started to take the numbers seriously and get Quickbooks and some help. To take a hard look and approach to how I price my work, my work hours etc.
    Tax time is always a fearful hell for me because of my lack of accounting organization. Now that I am getting into wholesale orders, I am Forcing myself to do the number crunching and get some help - no more avoiding the hard truths!

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  52. Did I mention that I have been a professional artist since 1999? I have attempted to "take control" several times, but without help. Sound like one of those commercials to quite smoking or something!
    I want to stop dreading tax time and accounting!

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  53. This post is really helpful. I've been lurking around your blog for awhile and find your writing informative and frequently entertaining but this one hits close to home. The mental noise that comes from neglecting the business end has been getting louder and more distracting. Thanks for the push.

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  54. This seals it. I'm learning Quickbooks tomorrow. Thanks, lady for the thoughtful and inspired post. And for the conversation today. Now I want to show you the business end of a good cup of coffee soon.
    xo Alice

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  55. Is it wrong that my nipples just totally got hard when you said that?

    Thank YOU for the great yoga class today and helping to regain my balance. No more tears today!

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  56. Thanks so much for this post - this is exactly what I needed to hear at this precise time! Your honesty and directness is much appreciated!

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  57. Great!!! Thank you so much, I have to start doing this cause I have a mess with my numbers right now!!! It is never too late!!!

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  58. Thank you for all your advice!! Great article :)
    http://sofisticata.etsy.com

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  59. Thanks for the candid post. I realized about a year ago that I needed to get my numbers under control after having so many people tell me that I was not charging enough for my work. I was lucky enough to get some help with building my own spreadsheets for inventory costs and product pricing which has really helped alot. Now though I need to find an Excel expert who can help me to tweak my spreadsheets so that they can automatically deduct inventory used when I enter amounts into my pricing spreadsheet. This would streamline things so much more for me. If anyone knows of anyone who could possibly help pls let me know. Thanks again Whitney.

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  60. Very inspiring! Thank you

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  61. Thanks for the reminder, I know all these things but still don't do them, you set things out really clearly and shame me into being more organised I hope.

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  62. I grew up in a family business, so when I started making jewelry, I was immediately encouraged to turn it into a business! When I first started I did a couple of craft shows and priced my items with no rhyme or reason. And then my dad told me about how I need to be tracking my cost, etc. Now I have a very in depth excel file of product cost, cost to post it, cost of packaging, shipping, it's overwhelming! And I'm certain there are things I'm leaving out, like time to go shopping for materials, time it takes to make the piece, etc. I feel like I at least have a good start on keeping my business in order, but I am certain I can do more. Thank you for the reminder of how important this is!

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  63. WOW...you have certainly hit the nail on the head,post after post after post! What a great blog AND ARTIST! (I am still at pre-school level pottery.) Mike Hale has been a self-employed artist for over 20 years, and as you've so perfectly stated, it takes a lot of work! We are both at that point again where we feel like wind-up toys bumping into the same wall. I can't begin to tell you how excited I am to find your blog! Your posts have definitely put things into a much needed fresh perspective! Thanks so much!

    & Co.
    The other half :)

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  64. I think you had some great ideas running a pottery is not just making pots

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  65. Thanks for an excellent post. I do okay on the business side, but the market dictates so much to us on price. You always have to be aware of the competition, and many times on Etsy, there are sellers who are just not calculating their costs accurately to be listing at such a low price. I know what it is costing them, and they are not asking enough, but just don't know it. They are my competition though, and I get a bit stuck, because I can't be too much higher than their item. I constantly work on my cost side of things to improve our numbers.

    I didn't see it in any of the comments, but "Outright" was a suggestion from Etsy awhile back, and I joined for free, and have all of our accounting in one place done for us. You can connect your PayPal, bank accounts, etc., and all of your expenses, income are spelled out for you...even your taxes. You can also send your files to your accountant at tax time, and it's all packaged up, ready to go. Just always try to spend on business with your business card, and not personal, so that it is all tracked separately and keep your receipts as back up.

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  66. Thank you for this post. I started out doing pretty well, but as sales became slower, I let it go. And I know I undersell myself.

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  67. great article and wonderful advice, thank you so much for sharing. i have admired your pottery work for a very long time by the way :)

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  68. This year I vowed to start looking at the business aspect of my art. It is scary....But, fear can be a great tool. Your post on Etsy was so inspiring to me. It gave me courage.
    Thank you, and here in Iowa we believe in the "Universe thing" too. Although it could be the fact that I did some West Coast time....

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  69. all great advice, especially the part about asking for help, which is something i find very hard to do. you've inspired me to try this. thanks whitney!

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  70. Wow! Thank you! I am so glad I stumbled across your blog (thanks to a post on Etsy). Your words are so encouraging and this article in particular is extremely helpful. Incredible. I've been trying to embrace the business side of my business as "fun" just as you said rather than wanting to just do the art part. I suppose the universe had a plan for me b/c I have always been an artist but ended up going through business school to try to be more "normal." Now I have both skill sets. And you've inspired me to use them. Thanks!

    P.S. I love your mention of the universe. That's probably because I was a California resident until recently:)

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  71. This post is awesome. I love how you acknowledge that you and your business are not perfect. I try to step back and take a good look at the business end at least once a month so I can feel where I am and where I need to be. I too have begun to use outright to handle my books and am looking into other programs as well as tapping my human resources like my business major friends for accounting help and advice

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  72. Thanks Whitney,
    Actually I was a self employed artist from when I was 21 until I was 30 and my daughters were born and I had to get a real job, with health insurance.
    I worked for engineering firms as a designer/drafter for 27 years. I made good money and had great benefits. I put both daughters through college and paid for both weddings. Then three years ago when the housing bubble burst, I lost my job.
    Being 60 years old, with a wife of 35 years who is 60 also and unable to find any bottom line philosphy businesses to hire me. I decided to create my own career path just as I had done way back when.
    Thanks for your encouraging article on going it alone. I swim a lot better than I sink.

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  73. Thank you it is sometimes discouraging and overwhelming at first to work in all department of my shop. I'm not good at the computer photos and product decriptions. I have learned it is okay just put yout item and and you can always fix it later and Etsy is very forgiving. So thank you for letting me know I an not alone and I will get better. Best to you in the new year!

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  74. Great information. Thank you for taking your time to write this for us all. We all know how valuable our time is, especially when we could be creating:) best to you from the universe!

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  75. Wonderful post! Personally, I love your positive attitude and truly believe in the power of positive thinking (and I'm from Michigan, of all places, so there is no resident of California excuse for me haha). But in all seriousness, like Lola Rain Photography, I too went to business school and the business side of running my company doesnt even come easy to me, someone who went through 4 yrs of business school and got my BA, then worked in the field for 4 yrs before deciding that life is just too precious to waste it by spending 8+ hrs a day 5 days a week doing something I hate. It wasnt that bad at first, but after dealing with the same office politics and other irritating BS for 4 yrs, I couldnt take it anymore. I decided I would do whatever it takes to make my jewelry business successful - even if it means making much less money and changing my living standards to make ends meet. In the end, there is nothing more valuable than your time because once it gone, it's gone, and no amount of money will change that, ya know.

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