Charge for Your Time or You Don't Have a Business
Module: What to Actually Charge
Here's the thing nobody tells you: you can do everything else right—decide it's real, keep your hours separate from your neighbor hours, write the idea down clean—and still not have a business. You just have a very expensive way to be nice.
I learned this one the slow, dumb way, so let me save you the trouble.
What I actually charged the first time
That wedding luncheon I keep bringing up, the one that started all this for me. I charged the neighbor $200. Felt generous, felt fair, felt like a nice round number a nice person would charge.
It cost me $340 in groceries. Eleven hours of my time, start to finish, shopping to cleanup. I didn't tell her. Just smiled, took her check, and went home and did math I should have done two weeks earlier.
I wasn't running a business that day. I was paying $140 out of my own pocket for the privilege of cooking for a stranger's daughter. Bless me, honestly.
The part everybody skips: counting your own time
Most people pricing their first job think about ingredients, maybe gas if they're organized. Almost nobody counts their own hours at first, and even once you start counting hours, it's easy to only count the hours where you're actually doing the thing—cooking, sewing, building, whatever your thing is.
Here's what I mean. I priced a job once purely by gut feel. Family up in Draper, nice open house, good-sized crowd. I quoted a number that felt right in my head and never once thought about the drive. Hour up, hour back. Two hours of my day, gone, unpaid, because I didn't count it as "real" work. It was just driving.
Except it wasn't just driving. It was two hours I couldn't spend on anything else—another job, my own family, sitting on the couch doing nothing, whatever. Time is time. If your business doesn't pay you for it, you paid for the privilege of having a business.
Now I count the drive. Always. Every job, before I quote a number, I write down: prep time, active time, drive time there, drive time back, cleanup time. All of it goes on the page before I think about a dollar figure.
A simple way to start doing this at home
You don't need software for this part. I use a spreadsheet, always have. Here's the shape of it:
- List every hour the job touches you. Planning, shopping or sourcing materials, the actual work, delivery or setup, cleanup. Be honest. Include the boring parts.
- List every dollar the job costs you. Materials, gas, any fee you pay to sell (booth fee, platform fee, whatever applies to your thing), and don't forget the small stuff—the extra trip to the store because you forgot the vanilla, that counts too.
- Decide what your hour is worth. Not what you wish it was worth. What you'd actually be upset to work for less than. Write that number down before you start pricing anything, so you're not making it up under pressure with a client waiting on a text back.
- Add it all up. Materials plus (hours times your rate) equals your floor. Not your dream price. Your floor. The number below which you are, again, just being nice with extra steps.
Do this on paper, with an actual idea you're testing, not a hypothetical. If you don't have a job lined up yet, price the last thing you did for free. See what it actually cost you. Might be a rough number to look at. That's fine. Better to know now.
The opinion I'll just say plainly
Charge for your time or you don't have a business. You have an expensive way to be nice, and there's nothing wrong with being nice, but call it what it is. If you want to cook for the ward party for free because you love the ward party, great, do that, on purpose, with your eyes open. Just don't let it happen by accident because you never sat down and did the math on hour four of standing at your own stove.
I still, to this day, catch myself wanting to undercharge people I like. It's not a flaw you fix once. It's a number you check every time.
Before next time: pull one job you've done or want to do, and run it through the four steps above. Bring your floor number to class, we'll poke at it together.