What Service-Based Business Owners Get Wrong About Charging For Their Time
- Lindsay Johnson
- Jul 4
- 3 min read
One of the biggest mistakes I see service-based businesses make, especially those of us who offer done-for-you or 1:1 services, is failing to account for the true cost of our time.
If you’ve ever thought, “It’s just my time, so I’m not really spending anything,” I want you to stop right there. That mindset is quietly sabotaging your profitability.
Your time is your most valuable business asset. And if you're not charging for it appropriately, or worse, not tracking it at all, you're not running a profitable business. You may even be running a very expensive hobby.
Time Is Money (And No, That’s Not Just a Cliché)
You might already know your hourly rate on paper. But are you really charging it?
Let’s say you charge $450 per month for a client package where you provide 3 hours of work at $150 per hour. That sounds great, until you realize you’re actually spending 5 hours a month on their work, including sneaky time-stealing tasks.
You've actually made $90 per hour and you just lost $300.
This happens all the time.
We don't count the "little things" like emails, prep, research, admin, sending that follow-up message, double-checking reports. These micro-moments add up. And because they’re invisible on paper, they go unpaid.
But guess what?
That’s real work. That’s real time. And if you’re not including it in your pricing, you’re not getting paid for it.
Hobby or Service-Based Business? Be Honest With Yourself
There’s a difference between doing something because it fills your soul and doing something because it fills your bank account.
I’ve had to make this distinction in my own business.
For example, I love creating YouTube videos. But unless a video is strategically aligned with my funnel or driving leads to my programs, it’s not “business.” It’s a creative outlet.
And that’s totally fine! I love doing YouTube as a hobby. But I don’t fool myself into thinking it’s a high-ROI task. It's not driving new business ... yet!
If you’ve got activities in your business that feel fun but aren’t moving the needle financially, call them what they are: hobbies.
You're allowed to have hobbies and do things related to your business that aren't the peak of productivity or generate revenue! Let yourself play.
And then make sure that when it comes to billable hours spent in and on your business, you're clear on what moves your business forward.
That clarity can save you from burnout and help you refocus on work that actually pays.
🤠 Need a refresher on the business activities that will bring in paying customers? Dive into my free course here
You Can’t Scale What You Don’t Track
If you don’t know how long your services take or you’re simply guessing, it’s nearly impossible to grow sustainably.
Start tracking. I don’t care if it’s a spreadsheet, a notebook, or a time-tracking app. Get real with yourself. How long does client onboarding take? Admin? Monthly reports? Calls? Prep?
You might discover that something you thought took 5 minutes is actually eating up half an hour. That’s when you get to make smart, strategic decisions: raise your prices, tweak your scope, or tighten your delivery.
This is how you scale without stretching yourself too thin. This is how you stop working for free.
Reflection Questions:
When was the last time I tracked how long my client work actually takes?
Am I pricing my services based on actual time spent, or am I guessing?
Are there tasks in my business that I’m doing for fun or out of habit, but aren’t bringing in money?
Have I ever calculated my effective hourly rate (total income ÷ total hours worked)?
What boundaries or systems could I put in place to protect my time moving forward?
If you're ready to get real about your time and your pricing, don’t just read this and move on. Open a doc, grab a notebook, or launch a time tracker. Start today.
Your future, more-profitable self will thank you.
Ready to charge what you're worth?
Watch this video for on how to ask for your preferred rates with clarity and confidence!
About Lindsay Johnson
Lindsay Johnson, aka The Radical Connector, teaches ick-free, ethical business skills to service-based entrepreneurs ready to stand out, make some noise, and use their brilliance to change the world.
Creator of the 1-year, Ick-Free Sales Community, Lindsay knows that building a business is a long game with a lot of moving parts and a steep learning curve ... and they're here to support you every step of the way!
