Do you value your time and charge what you're really worth?
If you work for yourself or run a small business the chances are you charge for your time.
When you're starting out, knowing what to charge can be a tricky and uncomfortable conversation.
In order to build your confidence, know what to charge and therefore how much you’re worth, start with a few basics.
- Your current/desired annual income
- Total working hours - weekly/monthly - part-time/full-time. How many hours do you want to work?
- Total billable hours - not every hour you work on/in your business is ‘billable’.
- The cost of doing business
Once you’ve established your hourly rate it’s easier to work out the cost of your products or services.
There are other factors to take into account but it gives you a starting point and builds confidence knowing it’s not just a finger in the air calculation or complete guesswork.
What your industry charges can be used as a guide, although this can be highly variable.
What To Charge
Many years ago I was invited to speak on time management at a business event and asked what I charged.
I already had an hourly rate for my coaching but hadn’t priced up an event like this before.
So, I needed to take into account everything else that goes in to creating and presenting a one-hour time management session.
- Calls and meetings with the organiser beforehand
- Research into the audience/industry
- Planning and preparation for the talk
- Producing the slides - more research, image search, downloads
- Practice and running through the presentation
- Creating/printing workbooks, leaflets and resources
- Travel time and costs to and from the location - how far is it?
- Setting up, testing out the tech.
- Follow-up afterwards
All of that in addition to the one-hour talk.
As a result I created a Speaker Calculator based on my Simple Hourly Rate Calculator.
I now use a version of this for all ‘project’ work, professional fees, as well as speaking events.
Ultimately, deciding whether or not to accept an invitation to speak, take on a project or complete a piece of work is up to you.
It's not always about the money.
Billable Hours
Certain professions, such as the legal, financial, consultancy and contractors, bill by the hour or bill for project work based on a number of hours.
You may be expected to bill for a certain number of hours in a week -70-95%.
Any shortfall is often made up putting in longer hours to complete the non-billable work.
Working more efficiently increases the available billable time.
Value Your Time
Even if you don’t charge for your time or have an hourly rate - your time still has a value.
Know your true value so you make better decisions.
- how you plan your time.
- How to prioritise your work
- when and what to delegate.
- How and what to charge
- Make better choices with your time
- The cost of wasted time
And wasted time adds up. Saving an hour a day = £3,900 ($4890) a year.
On average employees waste over 11 hours a week on distractions, interruptions, not working on priorities = over £11,000 ($13,700) a year.
Key Mistakes
A key mistake people make is undervaluing not only their time but also their knowledge, experience and expertise and not charging enough.
- Miscalculating how long a piece of work will take and only charging for the obvious or visible hours.
- Charging too little because you think you'll get more work. People don't choose based on lowest price.
- Taking on a lower value piece of work while missing out on higher value work.
- Lack of clarity of what is and isn’t involved.
- Not including everything that goes into creating and delivering a product or service.
What happens when the client/customer asks for more or just adds ‘one more thing’?
Do you simply end up putting in more and more hours without charging extra or agree the ‘extra’ work is an additional cost?
- Time tracking is important to know how and where you’re spending your time and how much you have available.
- Have a schedule and plan ahead so you work more efficiently and waste less time.
- Prioritise tasks to increase your efficiency.
- Set expectations and boundaries upfront to avoid 'scope creep'.
As I said last week, when you respect and value your time, others will respect
and value it too.
