The Holidaze are almost upon us and as service providers, you can feel a little unsure of what to offer, how to expand and how to ensure that your business thrives in this season of ecommerce shopping and gifting.
We’re kicking off a four-part Black Friday Entrepreneur Prep series with an easy way to support your scalability as a service provider and a quick and dirty solution for building a team before you have the funds to do so. We’ll also be sharing new ways to promote your business, ways to support your clients’ growth and promotion, and how to leverage your email marketing efforts to convert new leads before the first snowfall (or before you’re out for the day’s surf lesson depending where you are in the world!).
As a service provider, it can be challenging to create packages for your ideal clients. It can also be challenging to scale your business as you gain new clients to support the growth and expansion of your team with similar, or complementary, skill sets. This is where packaged services billed at a team rate can help even the most solo of solopreneurs create new streams of revenue and build a business with a strong foundation for long- and short-term goals.
A team rate is how I built a six-figure business in six weeks in 2015 and how I grew my company, Agency 6B, by 430% from March to September in 2020 during the COVID-19 pandemic. In this blog, I’ll share what a team rate is, how to establish one and three reasons why it will help you scale with stability for years to come.
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What is a team rate?
A team rate is, in the most literal sense, a pricing model that takes into account the individuals who will be working on a project and generates an hourly rate for all of them to work on it for a specific period of time during the duration of the engagement. It’s the easiest way to determine your profit, understand where you need to allocate resources and figure out how to grow your team (and offering) as you continue to build your business.
Most solopreneurs offer a flat hourly fee or a monthly retainer for projects. This model works well because it allows individuals to determine how much business they need to be profitable and how much business they can onboard in a given month. Despite the benefits, an exchange of time for dollars can stall efforts to scale. The solution? A team rate. A team rate allows a service provider to build in outsourcing costs before outsourcing the work, thus ensuring funds for scalability as the teams grow.
How do you calculate a team rate?
This varies by service, by market and by experience. At Agency 6B, we don’t outsource work, we work with a network of collaboration partners I know personally. I also am able to execute every single service we provide at an expert level -- guaranteeing that I understand the value, rate and time it takes to complete different pieces of our service provider puzzle.
If you’re just starting out, this might be trickier to ascertain. However, it is not impossible.
The easiest way to figure out a team rate is to start with the average salary for the skills you possess in your market. Use salary.com to look up the average salary and then divide that by 40 hours per week for 52 weeks. That number then needs to be multiplied by two in order to create a base rate. Why two? Because the number doesn’t include all of the overhead that small- and medium-sized businesses have.
From there, you can calculate how many additional positions need to be included in your blended rate.
Another way to do it is to determine the salaries of the individuals you want to onboard, as you grow and divide those salaries by the percentage of time they’d be responsible for each project.
Why do you need a team rate?
Reason 1: Scalability
The biggest pothole in the road to success for solopreneurs is scalability and time management. A team rate allows you to set boundaries with your clients and determine the best way to “staff” each project. For example, maybe you need to bring on someone for one, small piece of the puzzle, like a copywriter. With a team rate, you should be able to build in that cost without sacrificing any of YOUR hard-earned hourly rate from the project. It will also allow you to create a true sense of team support, which is a more premium service.
Reason 2: Packageability
Packages will save your business. You know what your ideal clients need and in this pandemic-riddled world, they need you to collapse time for them and show them a new way. Packages allow you to do this. Review your client agreements, find the top three services from the past year and package them into a three-tier offering with the middle tier being the offer that YOU can fulfill the most of in the shortest time frame.
Reason 3: Reliability
We’re all working in new and challenging ways this year -- maybe your kids moved back home, your parents might need more support or your younger kids are dealing with remote school for the first time. Whatever you’re juggling, you’re not alone. And partnerships with collaborators (supported by a team rate at the beginning of your new business development cycle) will allow you to quickly bring someone in to support you should your personal needs require more attention at one point or another.
One final thought on team building
The most challenging part of building your business is building your team. Even if your team is a trusted network of collaboration partners, there are a lot of things that you need to know about one another in order to be effective. That’s where having the right tools comes into play and that’s what we’ll tackle in the next blog focused on leveraging the right tools for promotions.
A team rate is meant to support your growth, increase your bottom line and provide new ways for you to pivot with purpose. Have a tip you’d like to share? Find me online at @vixreitano on Instagram and Facebook, @vixinthecity on Twitter or email me at [email protected].
Vix Reitano is a Creator, the Founder of Agency 6B and an International Speaker. Reitano has provided content to brands like AOL, USA Today, The Skimm, Huffington Post, Thrive Global and dozens more. She is a Google News Initiative Trainer with the Society of Professional Journalists and focuses on providing quick, thoughtful content for audiences of all ages. Learn more at vixreitano.com.