If you're running a business, you probably work long hours. But you may not know how many hours you work each week, much less how many hours you spend doing paid work or how many hours you spend doing all the administration necessary to manage your business.
If I were to ask you how many work hours you think you need to devote to your business every week to make a profit, you might start thinking about how much you charge, your business expenses and how many hours you spend doing unpaid administration work.
But the number of hours you need to work really depends on how much you have decided to earn.
'Paid work hours' means the hours of work for which you are actually charging a client, as distinct from the other hours of work necessary when you're a freelancer or owner/operator of a small business.
Do you know how many paid work hours you need to do to each week to ensure your business is financially viable? If your business is very new you may not yet know this, but if you've been running your business for a few years already you're likely to have a 'minimum income' that you know your business has to earn to stay afloat. That is, taking into account business expenses and tax, how much gross income do you need to make for the business to be viable?
Example: Donna knows how many paid work hours she needs to do every week to stay afloat, so has scheduled more than those 'required' number of work hours into her working week because 1) she is able to handle that workload, and 2) it is always a good idea to earn more money than necessary so you are able to manage financially when business is slow or unforeseen expenses arise.
'Unpaid work hours' means the unpaid hours of work you need to do, to promote your services and manage your online business. (Note: it does not mean doing unpaid work for people, socialising on FaceBook or LinkedIn, or surfing the internet.)
Promoting your services may include commenting on social media in ways that give exposure to your business, adding links into various sites and platforms, conducting targeted emailouts to potential or previous clients, writing and placing advertisements. Managing your business may include sending out quotes and invoices and other aspects of administration, managing contractors and bookings, writing tender applications or contracts, book-keeping and managing finances.
Do you know how many unpaid work hours (i.e. administering and promoting your business) you need to do each week? If not, spend a week documenting how much time you spend doing all the different tasks required to manage your business. You may be surprised at how many hours you spend doing those unpaid tasks.
Example: Michael is an editor. He counted up the hours he was spending doing administration work and was surprised how much time he was spending doing those tasks for which he wasn't being paid. As a result, he 1) increased his rates so his charges covered some of the administration time required to manage those and other jobs, and 2) streamlined his administration processes so he spent less weekly hours on administration tasks.
Add your weekly unpaid work hours to your weekly minimum requirement of paid work hours, to see how many hours of work you need to do each week to keep your business afloat.
Now, assuming you want to earn more money than is absolutely necessary to keep your business viable: how many hours of work would you like to do each week i.e. how much money would you like to make each week? Some people have very high financial goals such as making as much money as possible or having a high fixed figure they want to make each week that will require working seven days a week. Others don't want to work seven days a week and are happy with a modest profit.
Looking at the lifestyle you want and your non-work commitments, decide the number of total work hours (including unpaid work hours) you are happy to work each week - or, how much you want to earn.
Example: for the first six years of running her scribing/editing business, Sally's goal was to simply work as many hours and earn as much as possible. She was committed to making her business successful and worked very long hours. Then (due to family reasons) her priorities changed and she no longer wanted to work such long hours, so she decided how many weekly hours she needed to work to earn enough for the business to stay profitable, and then (more or less) stuck to those hours.
One of the most important things I have learned from operating my online scribing and editing business over many years is this:
When business slows down and there isn't enough work coming in to meet your chosen target of X hours of paid work per week, spend those extra work hours for which you are not going to be paid actively promoting your business!
Sure, you won't meet your earnings target during those weeks, but if you are spending those same hours still 'at work' (albeit unpaid work), if you are clever and promote your business in ways that get results, then those work hours will indirectly, and longer-term, result in earnings. In fact, I'd go as far as to say that it is a good thing if your business slows down every now and then because that gives you the opportunity to spend extra time doing promotional work which every business needs from time to time.
So if business is slow, don't despair. If you are committed enough to continue to spend all of your scheduled work hours actually working (whether paid or otherwise), every single week, then through your promotional activities you will end up winning new clients and new jobs and, ultimately, achieving your weekly income goal.
Example: I do exactly what I have described above and it works every time. Sometimes the 'quiet period' extends for longer than you're comfortable. But if you keep on promoting your business, rain or shine - keep on working your usual hours, even though your earnings are slow - you'll win in the end.
How best to schedule in that X number of work hours you need to fit into your week?
Only you can answer that.
Work out a schedule that you can comfortably fit into your personal lifestyle and usual commitments. If you want to work more hours than you seem to have time for, you'll need to re-evaluate how many hours you really want to work each week, and the importance of your personal commitments - that is, work out your priorities. Whether you work days, evenings and/or weekends is up to you. But don't try to cram an unsustainable number of work hours into your week unless you are superman or superwoman.
Remember the schedule is not set in stone: it's a working schedule. After a week or two you might realise you can take on a few more hours than you'd planned, or that the number of work hours you had wanted to do was unrealistic. If this happens, re-evaluate how many hours you want to work and how much you want to earn, and write up a new schedule.
Also, this is the real world: expect the unexpected. Sometimes you'll need to work extra hours to meet a deadline, or a family issue will arise that necessitates taking time off work. When those things happen, don't stress. Do what needs to be done and once the event has passed, go back to your schedule and try to fit in some 'extra' work hours over the following week or two, to make up for the work hours you have lost.
Example: When Jenny was younger and had no family commitments, her weekly schedule was 9 am to 6 pm (minus a lunch break) scribing and taking bookings, then 8pm to 10 or 11 pm editing reports, Monday through to Friday; as well as doing five or six hours' work on Saturdays and Sundays. In fact, she took on all the work she could manage and there was always plenty of it, so she worked all the time. However, after a few years of all work and no play, she realised she was forgetting to live. These days, Jenny works 9.30 am to 5.30 pm (minus a lunch break) Monday to Friday, plus four to five hours' work on Saturdays. Whenever her scheduled Monday to Friday work is interrupted by a non-work activity she makes up for the lost work time by working those hours during the evening. Her life is far more balanced.
I've been operating my scribing and editing business for 14 years so all I've said is tried and true in regard to my business. But all businesses and business operators are different; you may have an entirely different perspective. If you've got any feedback about this article - if you see anything wrong, or something I've omitted to mention that you think should be mentioned - or if you have any other ideas about how many hours sole traders or freelancers need to work to make their businesses profitable, please share your comment below.
This article is based on my own experiences since 2002 when I started On Time Typing as a sole trader business in Darwin which has over the years evolved into an online transcription, scribing, writing, editing and proofreading business with clients across Australia.
Stay posted for future articles about the challenges of working from home, work-life balance and other aspects of freelancing and managing home-based businesses, especially online scribing, secretarial or editing businesses.