By Bill Doran
What is your time worth? Part two.
Last month, we looked at the value of your time. What is it worth? This month, perhaps we can look at ways to determine that value. While there are many methods that you can use to determine this, I will focus on a few simple ideas to help you determine your worth.
First, break it down into parts.
In scuba, courses are often offered as a package. For instance, you may offer an Open Water course for a set amount, including the course material, all lessons, the open water dives, and the certification. While this may be the usual way people offer scuba courses, we are not alone. Often, in other careers, people do the same. An example could be a carpenter, who may give you a quote on building you a storage shed that would be a final and complete price. This type of quote has advantages and disadvantages, but a discussion on that would be an entirely different article.
At this time, I would like to focus on one big issue I have seen many times in many types of businesses, whether running as a multi-person business or as an independent, one-person business. Seeing items as one price often leads us to think of one income and one cost. However, there is more than one cost and more than one part of the budget that you must consider.
So, let us break course costs into parts. They would be course material, equipment costs, and your time. Is this correct? Often, instructors or other businesses will get to the end of the season and go where is the money? I taught ten courses for 500 each; should there not be 5000? Well, the answer is no!
Let us take a look at what is missing and make a list:
- Course material (Agency learning package)
- Equipment costs. This has separate areas to calculate o To pay yourself back for the original purchase
- Maintenance and repair
- Putting aside money to purchase new teaching equipment so that it is current and of quality
- Purchasing and replacing your equipment
- Air fills.
- Water costs. This could be pool costs or costs to get to and from the lake, river, or ocean. Yes, fuel and vehicle costs are there too!
- Professional and membership fees.
- The facility cost of your business. Even if you are an independent instructor, you have costs to store your equipment.
- AND DON’T FORGET YOUR TIME.
Second, focus on each part.
The list above may seem like you have a lot of work to do. That can be true depending on the size of your business. However, you must know your costs. This time well spent can be the difference in making versus losing money.
An easy method is to start a spreadsheet. I use Excel, but any spreadsheet software will work. Start with a column on the left that lists your Income from a course and then below it each of your costs as identified above.
Here are some points to consider when making your spreadsheet:
- How many students do you plan to teach per year?
- How many students per class?
- Start with a spreadsheet for one course only. Please keep it simple and then expand your plan accordingly.
Your spreadsheet could look like this:
Here is a link to an Excel spreadsheet where you can get started. Please note that the numbers are only there to fill in the blanks and make the formulas work, and you will need to fill in your numbers as these are simply placeholders. Open Water Diver Course cost template.xls. If you want a copy, let us know by emailing info@ScubaBiz.Help.
Try making a spreadsheet of your own and get a number in every box. The good thing with a computer program is that it is easy to change, add, or adapt your spreadsheet anytime. The important thing is to start NOW!
As you develop and adapt your course cost spreadsheet, you will see what your time is worth. Is that the value you thought you were getting? You will also see your income per student based on the course size.
While this is only one tool and far from a complete accounting system, you will find this is a powerful tool. I have completed this assignment with dive instructors countless times, and they have indeed gained from developing and using it. You can use this concept and have a spreadsheet for each course you teach and guided dives and trips.
Third, keep it separate.
Keep what separate, you ask? The answer is … the money!
So often, we spend the money before the bill to pay comes in. This article even has a money management tool in it.
Have you ever considered keeping your money in separate bank accounts, jars, or envelopes? It is an easy way to manage money and to make sure that the money is there to pay a bill when it arrives. Who among us did not struggle to pay the annual insurance over the past few years? Wow, it is crazy how the increases have been. Can you imagine having a special place to reach in and pull out the cash? It is possible.
When my children were in their teenage years, I sat down with them when they got home from school; we would have a snack and watch a television series on money management. This show was called “Til Debt Do Us Part”. It was an excellent show that helped people with money management. I feel that it genuinely could help instructors with the value and worth we are discussing. In this series, the host, Gail Vaz-Oxlade, helps a couple in each episode to see where their money is going and shows them how to spend it in the right areas. She used glass jars for the people to place their money, one for each category. This way, the money was spent in the correct place, and people could see the value of the money and what the money was worth. If you can go on the internet and watch an episode or several. It will be time well spent. Here is a link https://youtu.be/6Oo40fOgavc, where you can watch an episode or a few!
What does “What Your Time is Worth” have to do with all of this?
So many times, we confuse what our time is worth versus the money we bring in. Simply put, these are two very different items. Knowing what we are bringing in money-wise for our time is crucial to see if we are getting the correct amount for what we are worth. Far too many scuba instructors do not make it past the first two years for precisely the reasons covered in this article.
In next month’s issue, part three, we will look at promoting your time and service at a value of what your time is worth.
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