This email is rather a long one so do grab a mug of coffee before you get stuck in.
One of the questions that comes up a lot is how much to charge, and how to figure that out.
Some of you charge per hour to a client, or for a class.
Some of you don’t charge by the hour, but you have packages priced up.
Most of you probably know how much income you made last year, and some of you know how much of that was profit after paying yourself...
Let’s be honest, the number of working hours you squeeze into every day is slightly terrifying even if it doesn’t always feel very productive…
But what are you actually earning per hour worked?
I think we can often struggle with our pricing because it looks like we charge a lot for “just a couple of hours” with a client. Sure, we spent a lot of money on our training – but that was our choice, and personally I study because I love it.
Take a simple home visit for a recently rehomed border collie who is very excitable and seems to have no concept of loose lead walking. Here’s the breakdown of what this case requires:
Reading the initial enquiry email and replying to offer a phone consult (actually my lovely Office Manager does this)
(client books and pays for phone call – all done online)
Reading the pre-consult questionnaire and prepping some key questions
Initial phone consult to discuss situation and propose a plan
Typing up action plan, and sending by email plus hard copy in post
Follow-up email with availability to make sure client books in
(client books and pays)
Travel out
Face to face visit
Travel home
Typing up training plan with resources, send by email and hard copy with recommendation for package
Follow-up email to ensure book package
(client books and pays)
4 x travel plus 45min lessons fortnightly
4 x brief action plans and follow-up emails
Now your processes might look different to mine. I do use an Office Manager to deal with initial enquiries (we have lots of set template replies and automated options). My initial phone chats are paid for sessions but I know that fee does not entirely cover my time – it’s a gamble but 80% of people take up the recommended sessions.
Everything I have listed above costs me time. That’s time I can’t be doing something else like running with my dogs, taking a bath, meditating, cooking soup. I like doing those things, so the costs need to balance out. If I charge this very lovely client a flat hourly fee based on face to face contact time, I will seriously undersell myself.
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And what about the hidden costs of running a business?
- Phone bill
- Internet/broadband
- Vehicle maintenance
- Insurance
- Professional memberships
- Office supplies
- Replacing laptops and printers
- Admin time
- Website maintenance
- CPD
- Advertising
- Accounting fees
- Banking fees
So when you start thinking about your hourly rate, DON’T start by asking what everyone else is charging. Some of your competitors are barely scraping along, some are losing money and at least one is probably about to go bust.
Start with those numbers you already know – how many hours you WANT to work, and how much income do you WANT/NEED to make.
That might already give you a slightly scary figure.
Then you can think about what the costs are of delivering your services, because those need to be absorbed too.
Can your business cover its costs AND pay you a decent wage AND make some profit for re-investing and improving?
Some kinds of cases probably take you longer than others. Some take more out of you emotionally. Travel doesn’t just cost money, it takes your time and energy and saps you in the dark evenings.
Can you afford to stay in business?
Are you doing things right now that aren’t making you enough money – by enough I mean paying YOU that hourly rate and making the business some profit too. Because if you are something needs to change – and that might be you stop doing some things and concentrate on others.
It isn’t just about charging lots of dosh, or “valuing yourself” although that’s important.
It is about knowing how much it costs to deliver a service you are proud of, and making sure you don’t subsidise your own business.
I’ll sign off for now, and I hope that’s given you some more ideas to chew over this week!
Morag
Ultra-Canicross Runner, Firewalker, Clinical Animal Behaviourist
PS
The Loving Your Behaviour Business webinar series has gone live for booking (and you get access to the recording for 30 days after each webinar too). Our next topic is all about pricing and how much or little to charge...
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