The Cost of Quilting – Part 2

Last month, I wrote about the hidden costs of having a machine quilting business. Have you have been keeping track of ALL your business expenses, as I challenged you to do last month? Have you totaled them up and are you surprised at how much they really are?

Now we are going to take our monthly business expenses and have some “fun with numbers.”

First of all, take amount of your business expenses last month and multiply it by 12 (months) for a yearly total. Now, I know that this is not going to be an “exact” number, but it will give you a real good idea.

Let’s say your total monthly business expenses are $500.  Multiplied by 12 = $6,000 per year. For someone who has a full time machine quilting business, this amount, to me, seems reasonable. Remember, your business expenses may be different, and that’s all right.

Now I want to break this number down to “business expenses per quilt.” To do this, you need to know how many quilts, on average, you quilt per month. For this example, I will assume that all the quilts completed are Queen Size quilts.

Take the number of customer quilts you complete per month and divide that number into your monthly business expenses.

With business expenses of $500 per month –

  • if you complete 10 customer quilts per month, that is $50 per quilt.
  • if you complete 12 customer quilts per month, that is $41.66 per quilt. 
  • if you complete 15 customer quilts per month, that is $33.33 per quilt.
  • if you complete more or less customer quilts, your numbers will be different.

What this shows you is that no matter what I/you charge for quilting, the first $50 – $33.33 per quilt is to cover your business expenses!

But wait! There’s more!

Cost of your Quilting Machine – There is another part of the Cost of Quilting, and that is recovering the cost of your quilting machine. No, this is not depreciation or anything related to the IRS. (That is something you need to talk to you tax professional about.) This is simply a way of “getting back” the $$ you spent on your machine.

Let’s assume you spent $15,000 on your quilting machine and would like to recover this cost over 8 years. Here is the math on this –

$15,000 divided by 8 (years) = $1,875 per year, divided by 12 months = $156.25 per month. For easier math, I am going to round this number to $156. Now divide this number buy how many customer quilts you complete per month.

  • $156 divided by 10 quilts = $15.60 per quilt
  • $156 divided by 12 quilts = $13.00 per quilt
  • $156 divided by 15 quilts = $10.40 per quilt
  • And so on.

On last thing to include in the Cost of Quilting is TAXES! You need to include taxes into the cost of quilting. These taxes are self employment taxes and other taxes that are not sales taxes. I am not a CPA or an authority on taxes and can not give specific information about your tax situation. This is something you NEED to talk to your CPA/tax professional about.

For this post, I am going to include $15 per quilt for taxes.

Let’s put all of this together!

We need to add together the –

  • Business expenses (BE), per quilt
  • Cost of the Quilting Machine(QM), per quilt
  • Taxes (T), per quilt

For 10 quilts per month, that equals $80.60 per quilt
($50 BE + $1560 QM + $15 T)

For 12 quilts per month, that equals $69.66 per quilt
($41.66 BE + $13.00 QM + $15 T)

For 15 quilts per month, that equals $58.73 per quilt
($33.33 BE + $10.40 QM + 15 T)

According to these calculation, it will cost between $80.60 – $58.73 in total expenses BEFORE the quilting process even begins! 

I encourage you to do the math with your own numbers and see how much your expenses REALLY are in your own business!

Advertisements

About Cindy Roth
Mother of 3, Grandmother of 11 and quilting forever!

14 Responses to The Cost of Quilting – Part 2

  1. Pingback: Belated Happy New Year | Machine Quilting Business

  2. singingriverquilt says:

    Reblogged this on singingriverquilt's Blog.

  3. Pingback: Building A Solid, Profitable Longarm Business | Delightful Quilting

  4. You have really hit the nail on the head with this one. Like any business, all of the costs have to be counted to see what the bottom line is. With home based businesses, so often these “other” costs are never counted and you think you are making money, but you really are not. You are simply spending your time doing something. What else could you be doing with your time? What value are we putting on our time and our work?

  5. cindy, i just got my grace majestic long arm quilt machine and the bailerys 17e pro with the pattern perfect, i am just stairting my buisness in my home and the first quilt i am doing is a king size with triangles for a wedding present and i am not sure how much to charge the customer. she bought the material and said i could do anything i wanted with it. If you go to Kims wild quilts on facebook you can see the machine , i am really scared because i dont know what to charge my customer. Can you give me some idea?? thank you

    kimberly hambleton
    Kimber.hambleton@gmail.com

  6. Lyn Heilman says:

    Great post, Ida! Now if professional quilter’s will do this it would greatly increase the industry average for income:-)

  7. Pingback: The REAL cost of machine quilting | Cowtown Quilts

  8. Connie Antal says:

    How many quilts a month are you able to quilt? So far I have only managed about 6. Maybe I am exceptionally slow. For a quilt with few stops, what would be a good price to set for the quilting.

    • Margaret Landon says:

      Connie,
      Since my business is my income, I need to earn a living! Last year I completed 120 customer quilts. Of course, some queen, some baby! BUT. With the cost as Cindy wrote, I still need to do more! I charge .02 to .04 per sq inch, AND I do not do pantographs, but maybe that is an option…..if only for speed of completion.
      Margaret Landon
      The Quilt Parlor

      • Cindy Roth says:

        Hi Margaret,

        I, too, feel that professional machine quilters are grossly unappreciated and majorly underpaid. By educating ourselves in business, charging prices that make it worth the time and effort we put into a quilt, and focusing on customer service and marketing, we CAN make a decent living wage. We also need to educate our customers, and the public, to let them know that what we do DOES have value. We are NOT “just little old ladies who quilt because they have nothing else to do!”

        Like you, my quilting and teaching is my ONLY source of income. Because of this, I have to look at my business and pricing in a totally different way.

      • Margaret Landon says:

        Cindy, There is one other thing I would like you to do an article about. In this long arm business, there are other ways in which to add income, I sell batting and wide backing and sometimes customers will want Swarovski crystals on their quilts. And a class here and there with local quilters teaching. Are there any others that I am missing? Margaret Landon

        Sent from my iPad

      • Lyn Heilman says:

        I also offer binding services as well as piecing the back for an extra charge.
        Lyn Heilman

      • Connie Antal says:

        I also offer custom embroidered labels for their quilts. Especiallly the ones to be given as gifts.
        Connie Antal

  9. Margaret Landon says:

    Just finished reading part 2….how can we make a better wage for our services? I have recently increased my prices and my customers seem OK with it…one even said “it’s about time!”
    Cindy, you once priced out quilts, per month. Great article, but I still think we are underpaid.
    Margaret Landon

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: