Besides being a tax accountant, which is my full time job, I have owned various small businesses, which is something of a family tradition. My grandfather was a successful entrepreneur who started businesses, built them up, and then sold them before moving on to the next. Over his lengthy career he was a tropical fish wholesaler, owned a real estate office, a restaurant, started an online business at age 70, and took on about a dozen other enterprises. His ability to create a business based on seemingly ridiculous products and grow it into something solid is legendary, and so when I got “the itch” to generate some extra money from my hobby of knitting sweaters for my dog (and after I had knit my dog enough sweaters to sashay down our street in a different one each day of the week), I asked his opinion on the potential enterprise.
He told me to think about the cost of the inputs for each sweater. Dutifully I ticked off the cost of yarn, website fees, processing fees from Paypal, and flat rate postage. My grandfather nodded and then imparted the most important piece of business advice I have ever been given, or given in turn to someone else: How much was I planning to pay myself for the labor that went into knitting each sweater? This would determine how much I should charge for each sweater and whether that price equaled, or was less than, the price that customers would be willing to pay, would determine whether moving forward with “DoggoneKnits” was a good idea, or if I should keep knitting as a hobby.
I sat myself down, started a stopwatch, and instead of knitting intermittently, between answering e-mails and other distractions, I knit a sweater from beginning to end without stopping. Since my business was to be for custom fit dog sweaters, I needed to know how long it would take to knit one for a larger dog, a medium sized dog, as well as my own small dog in order to price accordingly, and so I went on to knit medium and large sized sweaters, working out a formula of time, materials, and size.
I compared the price that I thought was fair to charge for the sweaters with the amount that I thought I would need to pay myself per hour (plus the materials inputs) and concluded that yes, this was a business that I wanted to pursue. Of course, in my grandfather’s tradition, I continue to think about new and different ways to expand my business. Anyone interested in a scarf to match their dog’s sweater?