How Much Should I Charge as a Professional Organizer?
One of the most challenging questions to answer when we’re starting out is: How much should I charge as a professional organizer? How do I calculate my professional organizing rates? How do I make a budget? How do I create price packages?
First, there is no magic formula to calculate our fees. Depending on your education or area of professional expertise you may never have been taught to calculate prices for a product or service.
Let’s take a look at other aspects that will impact your ability to calculate your price.
1. What value do you bring?
We may lack understanding of the value we provide, and that will impact our ability to set our prices.
We may know our skills are valuable, but we don’t know how to communicate it.
For example, organized kitchens are both practical and optimize household work. Managing well-organized fridges and pantries generates savings in both time and money.
Well-planned menus reduce spending on your clients’ groceries. They can also provide for healthier, home-made meals, and allows them to have dinner with family. All these improvements have a positive impact on their mental, emotional and physical health.
But, in our inexperience, we often have a difficult time communicating all these benefits when selling our services.
As new organizers with limited organizing experience, we haven’t had the chance to internalize the results we provide and create a vocabulary that will make the sale.
2. What about my business expenses?
Another aspect that influences our ability to calculate our fees is related to the cost we incur creating and operating our company.
As a “newbie” we come into this industry without any idea of how much is needed to start and develop our business.
So, how much do I charge as a personal organizer?
A commonly used exercise by business coaches is to use a formula based on “how much you want to earn” and then work it backward.
I think this is OK for your first year in business but to stay on solid ground, you should move to a more detailed way of calculating your fees as a professional organizer after your first year of operation.
Below are two ways to get to your number.
3. Professional Organizer Rate – Exercise 1
The simplest way to calculate your price is to do it having the end number in mind.
This form of calculating your fees is the most frequently used method by business coaches, and it can be quite useful when we are in the starting phase of our organizing business. We still don’t have a clear picture of our expenses.
So, let’s do a calculation. You should add an estimate for expenses and taxes.
Step 1: Determine how much you want to earn per year.
Let’s say you want to make $ 60,000 / year.
Step 2: Determine how many weeks a year you want / can work.
Let’s say you want to take four weeks of vacation per year and will work 48 weeks a year.
Step 3: Divide the total $ by the number of weeks.
Let’s divide the $ 45,000 by 48, which is the number of weeks you want or can work, and you get $ 937 / week.
Step 4: Determine how many hours a week you want / can work.
To get an income R $ 937 / week, working:
- 10 hours a week you would have to charge $ 94.00 for an hour
- 20 hours a week you would have to charge $ 47.00 for an hour
- 30 hours a week you would have to charge $ 31.00 for an hour
- 40 hours a week you would have to charge $ 23.00 for an hour
Knowing these numbers also helps you understand how many clients you need to enroll per month.
This simple exercise helps you estimate how much you should charge based on how much you’d like to earn.
However, once your business starts rolling, you’ll have costs associated with it making it very important that you keep a spreadsheet including all operating expenses. After a 12-month period, you’ll have a clear picture of how much you spend to run your business.
I recommend that once you commit to your professional organizing business, you invest and use an accounting tool like Fresh or Quickbooks.
4. Professional Organizer Rate – Exercise 2
Calculating your price with data.
After running your business for some time, you’ll know what your costs are, and you can use this calculation to set your professional organizing rates:
1. Create a spreadsheet and enter all the expenses you incur to run your business. See a list of suggestions below.
2. In a second column to the right, enter how much you paid for each service. Add up all these costs, creating a monthly total.
3. Divide this total by the number of days worked – if you work 25 days a month, divide this monthly total by 25.
4. The result (the monthly total divided by the number of working days) is the cost of a day’s work. This value is the minimum you need to “charge” to cover your expenses and any amount above that number is your profit.
An important benefit of knowing this number is that it serves as a baseline when establishing your fees for other services you may offer which require different levels of effort and/or engagement on your part.
To help you create your spreadsheet, below are common expenses in a Professional Organizer Business. You can also download a handy spreadsheet to help you get started now!
Professional Organizing Business – Common Expenses:
- Taxes – will depend on the legal structure that you use for your business.
- Business License – check your city’s website.
- Legal advice
- Financial expenses
- Bank charges
- Fees on sales online
- Credit card processing fees
- Insurance for property (equipment) and business (required here in the US)
- Professional associations (NAPO, ICD, ANPOP)
- Training – includes books, classes, lectures, workshops, courses.
- Annual Conference
- Car Maintenance
- Office – if you separate your office from your home.
- Phone – dedicated line for your business.
- Software – purchase, and upgrades.
- graphic design
- social media management platforms
- two options: pay someone or “do it yourself,” as I did.
- Two possibilities: pay someone or “do it yourself,” as I did.
- Maintenance – unless you are willing to research and learn how to install and monitor the security and integrity of your site, it’s worth paying someone.
- Stationery / Office supplies
- used in projects with clients
- used by you
I hope this information will help you understand and calculate your professional organizing rates. Being a successful organizer means having well-managed finances.