Are You Charging Enough For Your Time?
One of the biggest costs within any business is the cost of labor – and for most in the wedding industry, a large percentage, if not all, of the labor cost in your business, is your labor. Thus, it is important for you, and your business, to not only understand what you are doing for your couples, but how much time you are spending doing it. This allows you to evaluate your pricing per couple vs. the time spent per couple, and determine if you need to raise your price and/or cut back on the time you spend with each couple. In addition, since figuring out the cost per couple must include time spent in and on your business, but outside of a particular booked couple, it allows you to better evaluate your systems and processes. For example, when should you outsource, how targeted your marketing needs to be, and whether or not a marketing vehicle is working well enough.
The first step to making changes is to know your average time cost per couple. If you are brand new to this business, estimating how much time you are going to spend per couple can be imprecise. You may be able to get some information from industry groups and by sitting down and talking with others in the industry, but your initial estimate will probably contain some guess work since what you plan to do for your couples, and the customer journey you will take them on, is something specific to you. I guarantee that it definitely contained guesswork for me, as the process that I thought I would have my couples do was not what I ended up refining it to. That is why it is recommended that you initially base your pricing on a combination of industry averages for your area and your expected costs.
Whether you are new to the business, or someone who has been around a while but doesn’t have a good idea of the number of hours spent per couple, you can create a system to figure it out. Of course, to do this, you must spend some time, as you need to track your time. The way I would recommend is to create a time budget spreadsheet or journal and use it for your next certain number of couples… let’s say about 10 couples. The reason you can’t just do it for one or two couples is that, although the process each couple goes through might be relatively the same, some couples require less effort than the average and some couples require more. The idea is to average the hours out across a good sampling to get an accurate amount. That way, the extra hours you may spend with a more difficult couple is averaged by the lower hours you spend with an easy couple. In this spreadsheet, you want to record all the time you spend on a particular couple – you might want to do it in 15 minutes increments, and even if something doesn’t take an entire 15 minute block (e.g. simple response to an e-mail), you are covering the time to “switch gears”, the time it takes to get the mind from whatever you were doing before to whatever you are going to do next.
This spreadsheet will give you a good idea of the time you spend on the actual client, but you also need to factor in time spent not specific to that couple. This includes bookkeeping, marketing and social media posts (not the play time, of course), networking, and, also of course, the time that you spend on inquiries that don’t become bookings. For inquiries that don’t become bookings, I would track that in a spreadsheet, similar to one that you are using for booked couples. And I would track it for about 10-15 inquiries that did not book to give you a good average. For the other “fixed time” areas, you can add them to the spreadsheet as you do them and/or go from past experience. For example, monthly bookkeeping takes about 3 hours per month; you average one networking event per month at about 4 hours; etc. Calculate these time costs across the number of expected bookings for the same period to get a time cost of that item per booked couple.
So, yes, it will take time to figure it out, but the process itself can give you a better realization of how long each task takes – and to know that you are spending 30 hours per booked couple vs. the 20 hours you were assuming it was can lead to changes necessary for a more successful business.