Time management, job estimation or pricing make the difference between working hard to make ends meet or working smart to build a business into a successful business model. Dr. Minette Riordan, creative marketing expert expert and author of The Artful Marketer: A Fundamental Business Guide for Creative Entrepreneurs, recommends developing extreme focus and clarity on your time management and business profitability. She shares some of the same no fluff advice she gives her clients so that you can quickly boost both your productivity and profitability, while maintaining your creative integrity.
1. Take a Time Audit
Finding ways to develop insight into "where to place your energy" considering Time Flow Out versus Cash Flow In can start with a simple time-tracking audit. Per Dr. Riordan's advice, write down exactly how your time is spent over the course of a week and review against your business goals. I spent over 60% of my time on writing, speaking, teaching and Podcasting versus client design work. Looking at the actual time breakdown causes you to think about whether or not doing all those things are valuable to your business bottom line goals. In my case, these tasks are essential to my business' sales and marketing goals and can't be skipped or I will have a revenue dip. If I need to free up more time for client work, the time audit showed me opportunities for efficiency improvements or outsourcing.
2. Always Overestimate
Especially when you have a new client or are entering into new project territory, overestimate the job - I typically double it. It is so un-motivating when you get into a project and find out that your 100 hour estimate is actually a 200 hour job and now your profit is cut in half or non-existent. If you really have excess time at the end of the job because of overestimation, give them a little something extra as a bonus or a discount on their next job.
3. Draft Check Your Perfectionism
Create connection points in your job delivery process to give clients a chance for feedback. When you think it's good enough for a first draft review, send it over to the client to check. Perhaps what you think is not good enough is as Dr. Riordan put it, "so far beyond everyone else's expectations" and is perfect for your client. Let them be your guide and don't overdo it.
4. Business Pricing vs. Hourly Pricing
Pricing needs to cover all of the costs of providing your service, not just your time. Too often equipment, supplies, allocation of general costs, benefits, taxes, training and marketing are overlooked. You are in business and need to price your services like a business, not like an in-house hourly employee. Many entrepreneurs, especially young freelancers make this mistake. Your hourly rate needs to at minimum net you a take-home pay equivalent to those salaried employees after all expenses and taxes are paid.
5. Believe in Your Value
"What creatives don't understand is, when you charge too low or deeply discount, clients perceive that as a lack of experience or skill. If you don't value yourself, how can anyone else?" advises Dr. Riordan. Here are a couple of ways to discount and retain value:
- Never change your going rate. Give a one-time discount at the bottom of your invoice for first-time clients or special projects.
- Offer a discount on the final invoice if a client brings you qualified referrals during the project or a valuable testimonial.
- Using a bulk discount for multi-month commitments or prepayment terms can be a great incentive without lowering your overall value. Don't forget to include penalties for early termination though.
Fixing the relationship between your time, money and value mindsets and your actions can quickly transform your creative work into a profitable business.