A lot of us who start out a business put countless hours into running the behind-the-scenes. We figure, money is worth sacrifice! And while that's true, we shouldn't sacrifice all of our time just to make money. Our time is worth something too! Whether it be time with our family or time working on new side projects that can make us more money in the future, time is money and we want to be as efficient as we can in business. So, what is your workflow costing you? Follow the process below to find out:
Service Based Business
1. What is the price of your most booked package
2. How many hours do you spend on this? (Ex. Emailing w/ client, traveling, preparing materials, actually providing the service, anything else you spend time on per service package you book).
3. What are your average costs per package booked? (travel, gas, day care, outsourcing, etc.)
4. Calculate: Your package price – your total costs / total hours spent = your total hourly rate.
Product Based Business
1. What is the price of your product
2. How many hours do you spend on creating this product + behind the scenes? (Ex. Emailing w/ customer on details, preparing materials, actually making the product, shipping, etc).
3. What are your average costs per product created? (shipping, materials, gas to buy materials, etc.)
4. Calculate: Your product price – your total costs / total hours spent creating it = your total profit per product sold
Example: Wedding Photographer
2. Emailing client/ questionnaires (2 hours) + traveling to shoots (5 hours including engagement shoot, bridals, wedding day) + shooting (6 hours) + Downloading, Culling, Editing (10 hours) + posting on social/blog (3 hours) = 26 hours
3. Babysitting ($30/hr, lets say you need about 13 of the 21 hours covered per wedding to get things done (*not necessarily consecutive hours of babysitting, but total hours per 1 wedding you're working on) = $390 ), Gas ($50 including engagement shoot, bridals, wedding day) = $440
4. $1000 - $440 / 26 hours = $21.54/ hour
If this is you, maybe it seems you're making more than you may at another student job... But this exercise hasn't even included taxes, insurance, monthly subscriptions, educational content you need to improve, business licensing fees, software, etc...
Going through this can really help you realize how MUCH you're working for so LITTLE.
From here, you have a few options to make more money.
Charge more, work more, or work faster.
Hope this was helpful to you guys! If it was, leave a comment below or on our Instagram post! :) Tune in next week for another #WeEducationMonday !