Why Is Job Costing Important to a WordPress Freelancer?

Job Costing for the WordPress FreelancerYou’re a WordPress freelancer. Great. You may even have an agency. We’re proud of you. But do you know how much you really make?

Samantha McCoy, a recent MBA Graduate from Pepperdine University, spoke at the April Orange County Women Who WP Meetup on job costing. She gave some specific hypothetical examples on unit costs and some reasonable things to include.

She focused on profitability during this presentation with several goals in mind:

  • Are you accounting for all of your costs?
  • Are you pricing your jobs correctly?
  • Do you really make $100 an hour?
  • Would you be surprised if you $100 an hour is really $16 after job costing? If you charge $100 and bid 50 hours, how much profitability do you really have?
  • Are you accounting for all of your overhead costs? Overhead costs are generally considered to be fixed costs that don’t fluctuate and are sometimes referred to as your burden.

Some of these costs include, but are not limited to:

  • Salary
  • Internet
  • Office Phone
  • Office Supplies
  • Office Equipment and Computers
  • Vehicles
  • Marketing & Advertising
  • Personal Development
  • Bank Fees
  • Self Employment and Income Taxes
  • Insurance (health, professional liability, etc.)

An easy way to account for these expenses is to add up your monthly expenses and take an average, or take your annual costs and divide by twelve. Then divide that cost by your average monthly hours. That’s your burden.

What if I can’t charge that?

Samantha suggested getting used to saying, “This is what you deserve and this is what you’re going to get.”

“But if you decide to do extra work,” she reminded, “That’s great, but remember it’s customer service. It’s marketing.”

Samantha explained that if you do something special, you need to make sure it is a conscious choice rather than something you’re forced into. She explained that you could send them a zero dollar invoice with the scope of work and mention that you normally charge to set reasonable expectations for the client in the future.

How does job costing affect the WordPress Ecosystem?

If we, as a business ecosystem, continue to under-account for our true expenses, we will under price our jobs. “Part of your responsibility in the WordPress Community is to charge enough so your friends will also make a living wage,” Samantha stressed.

Did you miss it?

Don’t worry if you missed this presentation. You can watch most of the presentation here.

Finance for Freelancers by Samantha L. Rockmaker McCoy

Posted by Women Who WP on Wednesday, April 19, 2017

Also, there is a brand new Orange County WordPress Meetup on the third Monday of the month, lead by Samantha called Business Track. View her slideshow presentation here: