The Real cost of Doing Business
I would charge £1200 to come to you in Manchester for a day and run a training course. Is that an excessive hourly rate? For an 8 hour day it’s £150/hour: blimey!
But apart from the supply and demand argument (not many people are prepared to risk being self employed, do all the travel, and do the selling and the doing, when they could get a well paid job running a factory or whatever)
…..and also the value-to-you argument: that day or training might save you £1million a year in better negotiating or better-run projects, and if the ten people on the course each get 1% more effective then the £120 each you’ve spent on them has been worth it,
…. But apart from these, let’s look at the REAL hourly rate. And this is important to you as well, because you’ll have the same sort of thing going on in your own business. Lots of costs that get forgotten when you price up your time, either as a manager or as a service provider.
So it looks like £1200 for 8 hours. “£150 per hour!”
But the 8 hours is really…
Including travel at least 2 hours each way = 12 hours
(not counting staying the night before)
Including prep time = 13 hours
Including invoicing afterwards, and booking hotels = 14 hours
Plus selling and client maintenance and arranging details of room, numbers, changes etc = 16 hours
(YOUR work will have a similar list of extras that you don’t always think about)
Then there’s the money coming in:
After tax the £1200 is more like £800
After petrol it’s £700
After hotel it’s £600
After printer ink, folders, books and cost of office it’s £500
(not counting website, marketing etc)
Then there’s the cost of holidays, pension and sickness which self employed people don’t get – very conservative estimate of £100 for this and we are at £400
So really I’m getting £400 for 16 hours which is £25 per hour.
Don’t get me wrong, I’m happy to earn £25 per hour for a job I love doing, but just don’t accuse me of getting paid £150!