Most creative businesses have ups and downs, and it can be tempting to say yes to everything while they are knocking on your door. But how do you know how much is too much work at once? And how can you smooth out the workload to give you a more reliable income and nice work environment? We will work backwards from your ideal revenue and work hours to decide and plan our your project load.
OVERVIEW:
1. How much do you need to bring in?
2. How much do you want to work?
3. Work categories and time needed
4. Getting it right with pricing
5. Brain power
5. Creating a plan
6. Sticking to the plan
1. How much do you need to bring in?
Step one is to find out how much revenue your company needs every month. To do this, list all expenses including your salary. Make sure to include any taxes, ongoing costs and items that come up yearly. If you have been running your business for more than a year, use the past 12 months as reference.
If you have been running your business for more than a year, use the past 12 months as reference
I also suggest adding at least a 10% buffer for things like technology accidents and unexpected expenses. This just means that a small miscalculation does not put you in to red.
Also plan for any investments you want to make in your company growth. This can be things like improving your website, attend more conferences or renting an office next year.
Here is an example of what your calculation can look like. Depending on prices in your region and the size of your company, you might use very different numbers but you will likely find many of the categories to be the same for you.
2. How much do you want to work?
The next step is to decide how much you want to work. Setting a limit is a good mental practice to help us stay creative and avoid overworking. We will use the example of a typical 40 hour work week here.
If you are running your own business, it can be tempting to make work your life. I find there are often a lot of external pressure to live up to the entrepreneur role, but also internal pressure to make your business successful quickly. Usually the most successful businesses are those that manage to stick around so try and think long term when you set your hours. That old saying work smarter, not harder sums it all up.
3. Work categories and time needed
Once we know how much revenue we need and the time we have to spend, it is time to find out how much of that time we can spend on projects.
To do this, list all the activities you need to get done and allocate a realistic time to each.
For example:
Marketing: 8 hours
Accounts/Finances: 2 hours
Strategy: 2 hours
Networking/meeting up with potential clients: 5 hours
Learning: 3 hours
Time left for client work: 20 hours
Total: 40 hours
4. Getting it right with pricing
It's time to put it all together! We now know how much revenue you need and the amount of time you have to work on projects. To stop us from making a plan that assumes unrealistic expectations (ultimately leading to stressful late nights) we need to make sure our pricing is right.
Before we make a plan, we want to make sure we are charging enough to avoid chasing an impossible schedule
Create a list of your 1-3 top services. Estimate the number of hours it takes you to complete the project. Don't forget to add phone calls, meetings and any revisions.
Also write down what you typically charge.
Now, can you make enough money at your current pricing?
In our example above, we have 20 hours/week to work on designs. That makes 80 hours per month. The typical project fee is £2000 and takes 40 hours to complete. We need to bring in £5000 but at this rate, we would only bring in £4000. We need to raise our prices.
Bonus tip: take this opportunity to look over all your services. Are some a lot more profitable? Perhaps consider switching to offering only the services that really make financial sense or that make you extra happy to work on.
5. Brain power
Not all work is created equal. Some stages like coming up with concepts can be much more draining than e.g. putting together brand guidelines once everything is approved. On top of planning out the number of hours per month, also consider how you can mix up the types of tasks on your plate.
Some activities take more brain power, try to mix up the types of tasks in a given week.
If you have employees, anticipating when people will feel more tired and scheduling less intense tasks can really help create a more supportive environment.
6. Making a plan
Amazing! You did so much work and it is really going to pay off, especially for your sanity. To create a plan from your decisions, I suggest creating a "project tracker".
Your project tracker is essentially your creative hour piggy bank.
Project Tracker Example
On one side you show the number of hours worked. On the other you show the amount of money brought in. As you schedule a project, fill in the money side. Then whenever you work on the project, fill up the hours you spent. This is an easy way to get a clear overview of how much time you have available for upcoming months and it can prevent spending too much time on a project.
If you plan on hiring someone to do part of the job, the hours side can also function as an expense side.
7. Sticking to the plan
In the next part of this series, we will look at how to create a personal schedule so you can fit in all the different activities you want to get done. There are lots of great options so organisation lover or free spirit, we will have something for you.
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