How do you define success? Many of us define success based on a number. I used to define success by this as well. It is quite common. Several years ago, however, I learned that success was not about a number for me. This is why I spent time redefining success for myself in the virtual industry. How will you define success?
Let me tell you a little more about this and why I think it is vital if you are an online service provider, freelancer, social media manager, or other online industry provider.
If you really read the definition, it is about setting a goal and achieving that goal that equals success (according to Oxford Languages).
No Two People – No Two Businesses
We all know that no two people are alike, but how often do we think of this (no two people alike) in terms of business? This truly applies, especially to the virtual industry. No two businesses are alike. Every freelancer, online service provider, etc. is different from another. So, why should we consider success by the same standards and measurements? This is another reason why I redefined success in the virtual industry for myself.
The way you and I do business will be different because we are different. How we manage, create, and even care for our clients is different.
Why Is This Important
I think it is important because too many online service businesses are working either much more than you would in a corporate job or the opposite is true and you are hardly working at all. If you are not overworking (more than 40 hours) then you are striving to do so in order to be able to hit that proverbial $100,000 mark. This is not easy and let me show you why.
Success In The Virtual Industry
In this article, I only want to peel back the layers of realities in this industry to help you define success for you in a realistic way. I do not want you to think you are doing anything wrong the way you are doing it. I just want to give you some facts to consider so that you realize you may already be successful!
Initially, I want to discuss numbers and give you a few examples to help peel these layers back for you. So, let’s talk about that proverbial $100k mark.
In order to see if you can make it to the $100k dollar mark is to do a little math. You will need to know your hourly rate, as I am showing you examples based on hourly rates. You also need to know how many hours a week you would like to work.
If you are transitioning from a standard 9 to 5 job you may want to continue to work 40 hours. Let’s take the first example from that point of view for the moment.
Example 1: $100,000+
If you say you want to make $100k per year we can back into that figure. We find that your hourly rate would need to be $49 per hour (and this would be a highly skilled freelancer rate) working 40 hours per week.
The math: $49 X 40 hrs x 52 weeks = $101,920
Then you can make $101,920. Sounds easy, right? Wrong!
If you were defining success as earning over $100,000 per year you would feel pretty good about this figure. I do not think you can really make this as a solopreneur unless you are providing a very high-tech service or consulting possibly and you cannot really work a true 40 hours per week.
The other option (and this is very possible) to make the $100k is to become an agency and add team members because this will multiply the revenue.
What Can You Actually Make
The reason I do not think you can make this amount easily is that more than likely you will not be working 40 billable (to client) hours per week. To work this amount of billable time you would really working a minimum of 45 – 50 hours or more per week.
As an online service provider, you will either be working at an hourly rate or a package rate. Let’s continue to assume hourly for our examples. When you work an hourly rate as an independent contractor you are working for the billable hours only that can be billed to clients on your invoices.
You have to understand, however, that you will not be able to work 40 billable hours a week as you did in a corporate job. Unless you do mind actually working 45-50 hours total per week.
If you try to work 40 billable hours you will work 45-50 actual hours each week. This is because you can only bill the time while you were working on each client. You cannot count the in-between time, nor the lunch break, bathroom breaks, reading other emails, etc. (you see where I’m going here). These times add up quickly.
Most online service providers or agency owners work an average of 30-35 billable hours each week (some less, some more).
Now, let’s assume you can work 35 billable hours each week.
Look at the math: $49 (rate) X 35 (hrs) X 52 Weeks = $89,180 Earned Yearly
At this rate, you will earn a nice $89,180. Still a very respectable, high yearly amount. And if you defined success as that dollar figure, you would still feel good about this, right? This, however, is more than likely still not the actual amount you will earn.
What You Really Earn
So far I have explained the difference between billable and actual hours worked. Then I took the actual billable hours down to 35 hours per week so that you will not work more than 40 hours per week (hopefully). And we have assumed you will work 52 weeks per year.
We need to be realistic, however, and discuss how many hours you will actually work in a year’s time. Although the 35 hours per week multiplied by the number of weeks seems logical to determine this, it is not what you will actually work in a year.
Remember, you only get paid for what can be billed to each client. Let’s consider how many days off you took this year. More than likely you took off for major Holidays like Thanksgiving, Christmas, Easter, etc. And let’s not forget the days you may miss due to those pesky illnesses. Lastly, consider if you want to take a vacation this year and how long.
You are ready now to figure out the real number of billable hours per year you will work.
How Many Hours You Work In A Year
As discussed you must subtract the number days of missed from the total yearly hours worked.
The number of possible Billable Hours Yearly can be figured out by taking the 35 hrs per week X 52 weeks = 1,820 total yearly billable hours maximum.
Math (Revisited from above): 1,820 hrs (total billable at 52 wks) X $49 hourly rate = Yearly Earnings $89,180
The problem here, as mentioned, is that I do not know anyone who actually works a full 52 weeks a year. I take off between the week of Christmas and New Year, and I go on a cruise every year with my husband. Both of these take my number of weeks to 49 weeks in total worked that year. That does not include any sick days.
Now, what happens if I miss a day or two because my Lupus or MS has decided to show up in a bad way? Or, Lord forbid, I end up in the hospital for a week? Now we are down to 48 weeks worked per year.
Figuring Out Your Time Off
It is time to subtract the time off for Holidays, Vacations, and Sick Days (+ Misc) from the maximum total number of hours (billable hours per year).
OK, is your head spinning yet? I know those of you who are not math geeks may be cringing. Hang in there, you can simply add your hourly rate and multiply it by the total number of total billable hours we figured to make it easier for you, assuming you take the same approximate time off.
We found the actual billable hours to be 1,680 yearly. The next thing we should do is take your hourly rate and multiply it by the actual billable yearly hours to get your yearly earnings.
Back to our math: 1,680 billable hours X $49 rate = $82,320 total annual earned
For the Non-Math Virtual Professional here is the formula, already done, for you:
Formula: 1,680 total hours worked per year (multiplied by) X $_____ (your rate) = Your Total Earned Yearly
What Does All Of This Mean
This is still a pretty good income to be able to work from home, isn’t it? You may be wondering, “What does all of this mean, anyway?”
Considerations That Affect Yearly Earnings
- What if you cannot count on this total number of billable hours?
- What if your niche or skill level only qualifies you to get $25 – $35 per hour, not $49?
- What if you can only work 25 or 30 hours per week, not 35 hours?
See how tricky this can get? Especially with all these possible narratives.
If you earn $25 per billable hour and you worked 30 billable hours per week.
Math – $25 X 1,440 (48 weeks x 30 hrs) = $36,000
If that was the case, then you are looking at closer to $36,000 annual pay. This is a huge difference and unfortunately a far cry from the $101,920 annual pay we started out with in the beginning. You need to plug in your figures to complete your formula fully. So, I have provided a formula for you below.
I’ve supplied the overall formula for you below but wanted you to understand how I got to this formula.
______Your actual hours worked per week X _______ Number of Actual Weeks you will work (minus time off) X ____Your Rate = _________ Your Yearly Earnings*
*These, of course, are the averages if you are putting in approximate hours weekly and yearly.
Would this be enough to equal success for you?
Virtual Industry Rates
Rates in the online service space can fluctuate greatly.
What determines your rates?
Rates also depend on a number of factors.
- Your location
- The current market
- Your niche
- Type of industry you serve
- If You have high-tech skills
And other factors can influence the rates you charge your clients. Doing competitive research is essential when setting up your rates and packages.
Remember, you do not have control over everything and some of these things can affect your earnings.
What Do You Have Control Over?
You can control:
- The number of billable hours you can work each week (if your client base is full)
- The number of weeks you work per year
- The number of clients you take on
- Your rate (if your skill & educational level are up to par)
- Type of clients you accept
What You Cannot Control
You cannot control:
- The Economy
- Number of clients you attract each year (not fully, marketing efforts help this)
- A Pandemic
- Your Internet Services Reliability (location, weather, etc. can cause disruptions which means you will work fewer hours)
There are many items within our control and yet so many that are not in our control. The best we can do is to make sure all that we can control is excellent and serving clients well. There will always be some uncontrollable things in our life but the way we adjust and bounce back determine the type of person we are in the end. And this will attract clients to us as well.
How Do You Determine Success
As you have seen, many factors can affect our yearly earnings as online service businesses and agency owners. You have to decide what is enough and what does success look like for you.
For me, I had to decide to stop spinning my wheels and go after the next shiny thing that promised to catapult my business. There are no easy ways, by the way, so don’t fall for the hype. I had to take a hard look at my business and my life.
Questions to Consider:
- Am I Content or Fulfilled?
- Do I Think I Have The Power or Strength to Go Further?
- What Does My Family Life Look Like?
- What Will My Family Remember About Me?
- What Are My Top 2 Priorities? And Can I Make A Difference With These?
- Who Should Most of My Time Be Spent With Right Now?
- Am I Chasing A Dream That Cannot Be Fulfilled?
- Do I Have the Skills Needed to Accomplish My Goal(s)?
Lastly, I think you really have to consider what your actual goals are right now. They will change over time, of course, but have you set goals to achieve?
“Without setting goals they are just wishes”-Unknown
These questions can really open your heart to what motivates you and where your priorities are for you.
Where I Redefined Success
When I finally redefined my success it came down to my priorities and what I really wanted to achieve in this lifetime and the type of legacy I wanted to leave behind.
That’s it – that simple! My legacy and priorities were and have always been God, family, and business. That’s my bottom line. I did not even put a dollar figure on it at all. As long as I was able to work & earn, whether from bed or in my office (as I am now), and keep my priorities (God and family) right, that was ALL I NEEDED!
So, why was I running in circles trying to achieve a number that really wasn’t needed? That didn’t mean that I didn’t hit that figure, just that I didn’t NEED to do it to feel successful.
Your Definition of Success
You have to define success for yourself. Your individual priorities and needs are different than mine. I need to work from bed at times due to my disability but I hope that you do not have and isn’t a factor for you. Consider the questions above and redefine success for yourself. I’d love to know what you come up with so please share it.
To Your Success
Thanks for reading and let me know your thoughts and questions. I really do answer my comments and questions on social media and through my email.
To Your Continued Success!