Chris Croft's Personal Blog

July 3, 2016

What’s my hourly rate? What’s yours?

Filed under: Uncategorized — chriscroft @ 9:49 am

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!

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2 Comments »

  1. Reblogged this on businessimpactsolutions.

    Comment by Business Impact Solutions — July 4, 2016 @ 4:34 pm

  2. I think one of the nice things about a smaller business is that you know (or SHOULD KNOW) what all those costs are. So every decision is based on a real knowledge-based choice: is it better to do this, or to not do this?

    We know pretty much what our fixed costs will be (salaries, office rental, benefits, etc.), which means we know at what point in the year we have done enough business to cover those costs – and everything thereafter is pure profit. That point is usually reached (so far) in July or August. I find it’s a nice way of looking at it.

    Martin

    Martin Herrington 3443 Burch Avenue Cincinnati OH45208 USA

    +1-513-203-4597 martinherrington@mac.com

    >

    Comment by Martin R Herrington — July 6, 2016 @ 9:44 am


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