Most craft businesses are born out of a passion that you already have, and the idea of someone wanting to buy something that you made to put in their home is so exciting and validating. Just that feeling alone makes it all worthwhile in the beginning.
Eventually though, if you want to turn it from a hobby to something that generates some income, you'll need to do a little bit of the boring stuff and make sure that what you are doing is actually profitable.
This stuff is not necessarily hard once you get into the habit of doing it, but as creatives, we can definitely feel resistance to this side of things when all we want to do is create.
It's important to have your finger on the pulse with your costs, income and cash flow, so that you can be confident that you are not losing money or getting underpaid for your time.
What this article will teach you
By the end of this guide, you will know exactly how to:
-Track your pottery business income & expenses simply and cheaply
-Understand your real costs (materials, firing, labour, overhead)
-Price your work so you earn a real profit
-Build a record-keeping system that’s easy, reliable, and tax-ready
-Build habits that keep your studio financially healthy year-round
If you follow what’s below, your business becomes clearer, more organised, more profitable, and less overwhelming.
1. Start with the Fundamentals: Know Your Real Costs
Most potters dramatically undercharge because they don’t understand true cost.
Profitability starts by breaking costs into clean categories:
Direct Material Costs
These include everything that goes into the piece:
-Clay
-Glaze
-Underglaze
-Tools used per batch (e.g., lusters, decals)
-Packaging (boxes, tape, padding, labels)
Firing Costs
This is usually ignored, but it matters hugely.
Calculate it by:
-Find your kiln’s kWh usage per firing
-Multiply by electricity cost
-Add kiln wear, maintenance, shelves, kiln wash
-Divide by number of pieces in that firing
It doesn’t have to be perfect.
It just needs to be realistic.
Labour
This is the biggest missing piece.
Track:
-Throwing
-Trimming
-Glazing
-Decorating
-Loading/unloading
-Photographing
-Packing
Even if you’re not “paying yourself” yet, assign a fair rate (e.g., £12–£18/hr). Profit requires valuing your time.
Overhead (Annual Studio Costs)
This includes:
-Rent or studio costs
-Website fees
-Software
-Kiln repairs
-Tools & equipment
-Market fees
-Insurance
-PPE
-Electricity (beyond firings)
Break this into a monthly figure, then allocate per piece.
Our Pricing Estimator Spreadsheet:
We have created a pricing estimator for this (click here to download)
You can use this sheet to:
- List your monthly overheads
- Estimate costs per piece
- Allocate overheads per piece
- Work out break-even prices
This spreadsheet is intended to estimate costs. It's a great starting point, but you will need to keep a more detailed record when it actually comes to making the pieces, so that you can make sure that you are accurately tracking your material costs and labour.
2. Build a Simple, Cheap, Realistic Record-Keeping System
You want your record keeping system to be as frictionless as possible. A simple google sheet is more than enough for most people, especially in the beginning.
Option A: Spreadsheet (Free, Flexible, Most Popular)
Set up a google sheet that tracks every single cost that you have. Every time you pay for something, log it in the sheet. You'll then be able to see clearly exactly what you have spent.
In the same sheet, you can also track your revenue. Every time you make a sale, add the sale to the sheet and add the income.
We have created an example sheet for you to use: Download
Option B: Wave Accounting (Free Software)
Wave was mentioned several times in the thread for a reason:
-It imports bank transactions
-Categorises expenses
-Generates real profit/loss reports
-Helps at tax time
Perfect for potters who want automation without paying for QuickBooks or Xero.
3. Know Which Expenses Are Tax-Deductible
Using your provided list and real-world pottery practice:
You should track and save receipts for:
-Clay, glazes, colourants
-Kiln elements, thermocouples, shelves, posts
-Tools & equipment
-Workshop, seminar, and conference fees
-Books, videos, and online learning
-Packaging materials
-Studio rent
-Website fees, domain renewal
-Software used for business
-Show fees and market fees
-Mileage (to studio, shows, suppliers)
-Electricity used for firing
-Photography equipment for product shots
-Business insurance
These categories came directly from the archive and record-keeping article you shared.
4. Systemise Record Keeping (This Makes Tax Season Easy)
This part uses the detailed instructions you shared about systemisation, record retention, and tickler systems—rewritten to be clean and useful.
Weekly habits (non-negotiable):
-Enter all income
-Enter all expenses
-Save receipts or photos of receipts
-Log kiln firings
-Track inventory updates
-Reconcile bank/credit card transactions
Monthly habits:
-Check cash flow
-Update overhead totals
-Organise receipts into digital folders (cloud recommended)
-Back up your accounting files
Quarterly habits:
-Review what's selling and what's not
-Adjust pricing if needed
-Prepare for VAT (if registered)
-Pay tax instalments if required
Record retention:
Most regions require 5–7 years of:
-Sales records
-Expense records
-VAT/tax filings
-Bank statements
-Invoices
-Kiln logs (if you claim electricity or repairs)
This structure comes almost directly from the record-retention and systemisation section you sent, but trimmed down and modernised.
5. Control Costs Without Sacrificing Quality
This part uses advice from the potters in your archive plus modern best practices.
Keep overhead low:
-Use simple glazes you can batch in large quantities
-Buy clay in larger bags to lower cost
-Avoid unnecessary studio subscriptions
-Repair tools instead of replacing whenever possible
-Share firings or materials with other makers
-Use free cloud storage instead of paid systems
Don’t bulk-buy everything
It feels efficient, but:
-It kills cash flow
-Leads to waste
-Reduces flexibility
Buy enough, not too much.
Kiln maintenance matters
Regular inspections and logs reduce:
-Element failures
-Firing mistakes
-Expensive breakdowns
This directly relates to the kiln-related operational advice embedded in the materials you provided.
7. Cash Flow: The Most Important (and Most Ignored) Factor
Cash flow is what keeps the lights on.
Improve it by:
-Keeping a 1–2 month emergency buffer
-Avoiding unnecessary equipment upgrades
-Planning large expenses (kiln repairs, events) in advance
-Paying yourself something, even if small
-Breaking big supply orders into smaller ones
-Tracking expenses weekly, not quarterly
Your original material highlighted this clearly: cash flow basics matter more than complex accounting.
Final Takeaway: A Profitable Pottery Business Is Built on Systems, Not Guesswork
I know that was a lot of information to take in, so I'll summarise a quick system here:
- Use our pricing estimator to get a rough idea of costs and what you should be pricing your work
- Use our costs and revenue spreadsheet to track every single bit of money that comes in and out of your business
- Create a spreadsheet where you can fully log the costs per piece. This should include: Labour time for each stage, clay cost and amounts, glazes cost and any other costs related to it
With these three spreadsheets, you should be able to clearly see:
-What everything cots
-What you are earning
-Why your pricing is correct
-When you’re overspending
-Which pieces are worth making
-Whether your studio is healthy
It’s the result of clear record keeping, smart pricing, controlled spending, and steady production habits.
As always, if you need anything - let us know!
The Pottery People