Dude and New Wave Princess want to sell luxury items. I use the word “luxury” to describe artwork and training because they are items that are not immediately necessary, and in the majority of cases, can be deferred indefinitely. Running a business has problems similar to getting a job, except you are selling your artwork or classes one at time rather than getting a salary for an indefinite period of time. This will make your income stream “lumpy”, rather than a check every two weeks. You might argue with me that something is better than nothing, and I’d agree, up to a point. For instance, starting a business doesn’t immediately solve the issue of not getting benefits. The cost of providing health insurance and other benefits just shifts to you.
There are also costs to running your business that are not borne by employees, such as the need to pay 15.3% of your net to Social Security taxes up to the maximum, and you can deduct the cost of things that I cannot, such as art supplies or room rental for the classes. You might decide to organize yourself as a limited liability corporation, though this is more important for NWP than for Dude.
If anything, people are going to be more particular about artwork than they are about hiring employees. Taste is arbitrary. Upwards of 90% of people will have no interest in what you do, and those who are interested will probably want you to drop your price. Anchoring, which deals with what we think something should cost, will kick in, and because you are unknown, you will attract only the “Starving Artists” rate, not the several hundreds of dollars per cartoon that you want.
In the training world, what sets New Wave Princess Enterprises apart from the “Dummies” books or things that one can get online for free? Much of the value added of an instructor is guidance and forcing a person to acquire certain skills within a certain amount of time. Where I work, we have “training week”, where we take all of the mandatory annual training at one time. This is fun stuff like drug abuse awareness and sexual harassment awareness. A local rehab hospital presents the drug abuse training, probably in the hope that if any of us need drying out, we will think of them. I managed to miss “Heat and Cold Stress”, so I talked the training coordinator into giving me credit for it by taking a more comprehensive course industrial hygiene course that I could get on line. I did the same for a waste management course that is required. I had taken the course, but the sign-in sheet got lost, and no sign-in sheet, no credit.
If you’re pricing a training offering, you need to charge something above what you think that your hourly rate sould be to cover the preparation time. The question that I’d be asking is what value you offer that isn’t easily met within a given company. Above a certain size, a company may decide to have their own training department, so your market may well be the same small companies that are rejecting you as an employee. If anything, selling your training offerings may well be an endeavor that requires more of an “in” with managers who can decide to hire you than getting a job.
Another thing to consider with training is the cost of the pay of the people who will be taking your course. This usually is a greater cost than what you will be paid. Even at $10 an hour, 20 people in a one-day training course is a loss of $1600 to the company. Have you considered private tutoring? This might work better in a college town or an area where a lot of children go to college.
The larger question that I am trying to ask is how do you generate demand for things that are more or less optional and where demand is very elastic? The guy who ran the birthday parties has the advantage of having children have a birthday every year, and in a lot of cases, the child wanting to have a party. Neither of you have the options of passively selling via a website. It’s necessary to go out to the art and craft shows or cold call companies about their training needs.