42: The answer to everything?
According to Douglas Adams, 42 is the answer to the all-encompassing question about life, the universe and everything else, but it is actually not insignificant for us self-employed in the event industry. A plea for more courage and entrepreneurial action when structuring daily rates.
I love my job. I think that's a sentence that makes our industry very different from many others. Not only are we all proud of what we do, we bring passion to every concert, conference, event we are involved with. But it is precisely this love and passion that has ensured that we have put ourselves in the role of low earners with the perspective of poverty in old age.
The 42 refers to an hourly rate set in a judgment (B 12R 7/15R) of the 12th Senate of the Federal Social Court (BSG) led to a remedial teacher classified by the German pension insurance as a bogus self-employed being able to successfully take action against this status.
The court came to the conclusion that "the fee (...) was of particular importance in the context of the individual circumstances". This fee of €40 to €41.50 per hour of care was “significantly higher than the wages of a comparable employee” and “thus allowed for personal provision”, according to the court, “an important indication of self-employment”. This shows that there are more points to consider when it comes to daily rates than just the monthly fixed costs. Unfortunately, at current daily rates, most SEUs in the industry are typically a far cry from €42 per hour.
The income of a self-employed person does not only have to cover the monthly rent, electricity, gas and water, not only telephone and internet, not only living expenses and health insurance.
Above all, it must also include liability insurance and pension provision to an extent that does not leave you with ALG2 at retirement age.
And don't forget: Holidays, illness, further training, bookkeeping, reserves for times with few orders, tax consultants. In addition, entrepreneurial activity also means that the company should generate profit.
By the way, children have not yet appeared in this list at all. Even if you don't have one, you can't expect to suddenly be able to impose a significantly higher daily rate on your customers than before when parenthood is approaching.
Accordingly, the possibility of becoming parents must also be included in the daily rate. And last but not least, the payment is also a clear indication of the “self-employed” status, as the BSG determined.
A common mistake when calculating the daily rate is the misjudgment of the productive days that can actually be billed.
If we look at the 365 days of a year, the following days must be subtracted:
- days off (about 115 days). We rarely have Sundays and public holidays, but the number must still be the same.
- vacation (20 days)
- Sick days (14 days)
- 44 days for acquisition and marketing (1 day per work week)
- 44 days for work at the company and administration (writing invoices, bookkeeping, further training, 1 day per working week)
That makes a total of 237 days of the year in which no money can be made.
There are 128 days left, i.e. 10.67 daily rates per month, which must generate the income.
If you work significantly more in a month, this must also be reflected in an additional income.
Another argument that is often used is that the market would not allow higher daily rates. And this is where the courage part begins.
Imagine a supermarket that would let its customers determine its prices – the end of the supermarket would be near.
And now imagine the buyer coming up with the argument that he doesn't have that much budget, in our industry for example organizers in clubs. Of course you can always negotiate, but it cannot and must not be to our disadvantage if customers cannot actually afford certain services and we take on this burden in the form of a small daily rate.
Unfortunately, in the past it has often become common practice for our customers to dictate the price to us. And it's up to us whether we bow to it or not. Of course, you need a sure instinct, nobody gets anything out of alienating their customers.
But experience also shows that the money is there and many customers would even be willing to pay more if they only insisted.
Of course, it is always difficult to change established structures. But the shutdown of our industry offers a unique opportunity: a restructuring of the price structure.
And not against our customers, but together with them.
It's important to understand: daily rates aren't set in stone.
The past has shown that small annual price increases of €10-20 scare off the fewest existing customers. In this way, you can start a slow but steady price development that does not overwhelm customers, but still raises the price level.
With new customers it is usually much better to set higher daily rates. Of course there will be customers here and there who will then say that it is too expensive for them, but courage also comes into play here: it is no drama not to get a badly paid job because it was too expensive. On the contrary, through clever entrepreneurial negotiations, it opens up the possibility of accepting an order that is better paid.
And last but not least, we should not forget one thing: our work also has value.
But we forget that all too often. Maybe it's because we've always been used to working in secret. In the end, a not inconsiderable part of our job has always consisted of ensuring that no one really notices what we are doing. Conversely, this does not mean that our work has no value, on the contrary!
And this value must also be reflected in the payment.
The fact that there will continue to be a gap is only reasonable, after all, better performance, more experience and greater responsibility must also be reflected in the daily rate.
A low daily rate, on the other hand, always emits a less high-quality service.
Let's be courageous together, for fair and appropriate payment in the event industry!
Under the following link you can download the ZIP file of the ISDV daily rate calculator.
The ZIP contains an Excel file, a Numbers file and an explanatory text.
We would like to thank Lewe Redlin and Bertram Zimmermann for developing the text and daily rate calculator!