Your business: how many hours do you need to work?
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, and that will partly depend on your commitment to/requirements of your business versus your commitment to/requirements of your family/life.
Paid work hours – working ‘in’ your business
‘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 is a freelance scribe/consultant. She knows how many paid hours she needs to do every week to make a small profit, and 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 a bit extra, so that you are able to manage financially when business slows down or unforeseen expenses arise.
Unpaid work hours – working ‘on’ your business
‘Unpaid work hours’ means the unpaid hours of work you need to do, to promote your services and manage your online business. (Note: this does not mean doing unpaid work for people, or chatting to friends on the phone or FaceBook (unless you’re chatting with professional colleagues or clients).
Promoting your services should include commenting on social media in ways that give exposure to your business, blogging (if that is a marketing platform used by your business), adding links into various sites and platforms, conducting targeted email-outs to potential or previous clients, writing and placing advertisements or marketing material. Managing your business will include the unpaid tasks of 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 marketing your business) you need to do each week? If not, try documenting how much time you spend doing all the different tasks required to manage your business, in a week. You may be surprised at the number of hours you spend on 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.
Deciding how many work hours you want to do
Add the weekly unpaid work hours you need to do to keep your business running smoothly (that you don’t charge clients for) to your minimum weekly requirement of paid work hours and the earnings from those paid hours, to see how many hours of work you need to do each week, and your average earnings ‘per hour of work’ (including the non-chargeable hours).
Assuming you want to earn more money than is absolutely necessary to keep your business viable, now you can think about how much extra money you would like to make, and how many hours of work you would like to, or could, put in each week. Some people have high financial goals such as a high figure they want to make each week that will require working six days a week, or simply want to make as much money as possible even if that means working 24/7. Others don’t want to work every day and are happy with a modest profit.
Looking at your non-work commitments (for example, family, lifestyle) will help you decide the number of total work hours you want to work each week – or, how much you want to earn versus how much time you want to spend outside of work. You also need to look at what you charge for your paid hours to make sure you are earning an appropriate hourly rate for all your hours of work and, if necessary, raise your rates so you are earning a fair income.
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.
When you can’t meet your weekly ‘paid work hours’ target
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 being paid actively promoting your business!
Sure, you won’t meet your earnings target during those ‘down weeks’, but if you are spending those same hours ‘at work’ (albeit unpaid), and are clever enough to make sure you’re marketing your business in a way that gets results, then those unpaid work hours will indirectly result in earnings, longer term. In fact, you could say that it’s a good thing if your business slows down every now and then, because that gives you the opportunity to spend extra time doing marketing work.
So if business is slow, don’t despair. If you continue to spend all of your scheduled work hours actually working (whether paid or otherwise), then through your marketing activities you should end up winning new clients, new jobs and, ultimately, achieving your weekly income goal.
Example: I do exactly what I have described above and it works. But in addition to that, I have learned to dedicate about 10 hours a week to marketing alone. (For me, this includes writing blogs – such as this – and participating in social media platforms such as Facebook, LinkedIn and Instagram which gets and keeps the name of ‘On Time Typing’ out there.) If you keep on promoting your business, rain or shine, and keep on working your usual hours even though the work has dropped off a little, and make sure you are charging the rates you need to charge to make a profit, you’ll achieve success.
Work out a weekly schedule (and stick to it)
How best to schedule the number of work hours you need to work, into your week?
Work out a schedule that you can comfortably fit into your outside-of-work lifestyle and commitments. You can work days, evenings and/or weekends. But don’t try to cram an unsustainable number of work hours into your week. If you want to work more hours than you seem to have time for, you’ll need to re-evaluate your commitment to earnings/work versus non-work/lifestyle; that is, work out your priorities based on your situation and needs.
Remember your work schedule is not set in stone. After a week or two of sticking to the schedule, you might realise you can take on more hours than you’d planned, or that the number of work hours you had wanted to do was unrealistic. If this is the case, re-evaluate how many hours you want to work and how much you want to earn, and write up a new schedule, and stick to it.
Also, in the real world of running your own business, you have to 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 out. When those things happen, don’t stress. Just do what needs to be done and once the event has passed, go back to your usual schedule but try to fit in some ‘extra’ work hours over the following weeks 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 also on 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. She made good money. However, after a while of all work and no play, Jenny realised she was always in a hurry and wasn’t enjoying anything outside work any more. She changed her priorities. These days, Jenny works 9.30 am to 5.30 pm (minus a lunch break) Monday to Friday, plus a few hours most 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 or weekend. She has found the balance she needs between her life and work.
What do you think?
I’ve been operating my scribing and editing business since 2002 and the above 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 or have any other ideas about how many hours sole traders or freelancers need to work to make their businesses profitable, while keeping their non-work lives in balance, please share your comment below.
This article is based on my own experiences since 2002 running my scribing and editing business, On Time Typing. Check out my other articles about the challenges of working from home, work-life balance and other aspects of freelancing and managing home-based businesses, especially online scribing or editing businesses, at: Work-life balance articles.
Image: Pixabay Creative Commons licence.
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