Is your business on Facebook, Twitter, LinkedIn? Do you spend a fair amount of time updating your posts and pages to inform and connect with customers? Then it may be time to assess how much participating in social media is costing your business and whether it’s a good use of your time.
Social Media is Free, Isn’t It?
If you’ve hired a social media professional to handle your business’s presence on the most popular sites, you know the hard costs of promoting your products and services, or establishing your brand and expertise, online. But what if you handle social media yourself? Most small business owners and entrepreneurs do, but that doesn’t mean social media is free.
Social Media’s Opportunity Cost to Your Business
Remember when your economics professor covered the concept of opportunity cost? Everything we do has a cost, even social media. One way to determine that cost is to access what your potential earnings would be if you used the time you invest in social media to focus on activities that will drive revenue for your business.
Ironing Shirts and Opportunity Cost
The best way I ever heard opportunity cost defined was listening to two business associates argue about whether or not they should iron their own dress shirts or send them out to the laundry. One guy insisted that ironing his shirts himself was well worth his time, since he liked the way they felt when he wore them much better than the stiffer laundry-ironed variety.
But his peer asked him a few simple questions: 1) How much does the laundry charge to iron one shirt? Answer: $3.00 per shirt. 2) How much do you earn per hour? Answer: $43.00 per hour. 3) How many shirts can you iron in an hour? Answer: 3.
Doing the math, it was costing the guy who ironed his own shirts $14.33 per shirt based on the fact that he could be spending his time – and valuable time at that – doing other things. If he’d sent his shirts out to the laundry, three shirts would cost him $9; but doing them himself cost him $43 – almost 500% more.
Evaluating the Cost and Worth of Social Media for Your Business
So what does all this mean for your business? Using a simple method of assigning value just for argument’s sake, and leaving out the varied nuances and complexities of undefined ROI and brand value social media brings to your company, let’s see how much it costs a small business owner or entrepreneur to handle their own social media.
Business Owner A earns a net income of $40,000
Business Owner B, $70,000
Entrepreneur A, $100,000
Entrepreneur B, $120,000
If they each work 50 hours per week, their hourly wages roughly come to $15, $27, $39, and $47 respectively.
The following chart estimates the opportunity cost each of them invest if they devote one, two, or three hours a day to social media.
An Hour a Day of Social Media Can Cost $12,267 Every Year
As you can see, investing only one hour a day toward social media can have real costs:
Business Owner A - $4,176
Business Owner B - $7,047
Entrepreneur A - $10,179
Entrepreneur B - $12,267
Three Hours a Day of Social Media Can Cost $36,801 Every Year
Business Owner A - $12,528
Business Owner B - $21,141
Entrepreneur A - $30,537
Entrepreneur B - $36,801
Making Social Media Profitable for your Company
It may be time to hire a social media professional to take care of your online presence for you. Only you can decide what your time is worth and how best to spend it for your company.