Here’s a handy technique you can use to help you find the right balance of income earning and creative activity. I use this on a regular basis with clients, and it usually helps them visualise how to divide their time effectively.
Once you have decided what the various parts of your portfolio (e.g. making, running workshops, selling online, teaching etc.) are likely to be, you need to decide what proportion of your available time you will spend on each. This in turn will dictate how much income you can expect from each part.
It also helps with the very important issue of setting financial goals – which are critical. You need to be able to estimate your inflow and outflow of cash as accurately as possible.
The process can be divided up and tackled in a number of easy steps:
1. Decide how many days a year you are available for work.
Don’t forget to take into account any days of paid work you do for other people.
Start with 365, then subtract weekends (or if you work weekends, the weekday equivalent thereof). Subtract the number of ‘holiday days’ you wish to take. Then subtract the number of days you need to spend on admin, marketing and running your business. Think about and subtract the number of days you might estimate to be ill each year. Finally think of the number of days you might want to devote to things which may earn you no money at all – reading and research perhaps – or being a parent or carer. And then take off any days that you will be working for someone else.
How many days are left out of 365? Whatever goal you have set yourself for self-employed income will need to be earned in that number of days.
2. How many different things do you do (or plan to do) which will earn you money?
For some, this will be simple:
· Online trading
For others, more complex:
· Running workshops
· Working as guest lecturer
· Working part time for an arts organisation
· Selling designs
Whatever they are, list them all.
3. Take a large sheet of paper.
Draw a pie chart that shows roughly what proportion of your available days you will spend on each activity. The pie chart approach lets you visualise the proportions easily.
On the list or in each ‘slice’ of the pie chart, write down the number of days you want to devote to each.
Now, bearing in mind the total income you want in the coming year, how much can you reasonably charge for a day’s activity in each area of work? Do the sums. At this stage, this will usually need careful thought and adjustment. You should end up with a balance of activity that lets you hit or exceed your financial goal. Don’t forget that your total must cover all your business costs, tax and insurance that you will have to pay, and your personal drawings.
If it doesn’t, check that your pricing is realistic, i.e. properly pitched, in each area of work. It can pay to compare notes with other people if you are at all unsure about what you might be able to charge for particular activities.
You may need to increase or decrease the number of days you have allocated to certain things.
Planning ahead in this way puts you in control. When you have established how many days’ work you want to get in each area, you can begin to assess how to go about your marketing. You can then allocate your time and budget accordingly.