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7 Secrets to Writing Inventory Procedures
You have permission to publish this article free of charge, as long as the resource box is included with the article. If you do run my article, a courtesy reply to sean@bizmanualz.com would be greatly appreciated. This article is 994 words long...
Buying Overseas Property
Copyright 2005 Hugh Griffin
Fourteen Top Tips for Overseas Property Investment:
1. Buy what you want to buy. The most important decision when buying a property is deciding exactly what you want the property to do for you. Is it purely for...
How To Realistically Set Your Fees - Part 3
Effect of Benefits
We have previously examined realistic billable hours and the effect of business expenses on your hourly rate. Now we'll look at the effect of benefits.
Once upon at time, when we were employed, we received a benefits...
Nine Advance Networking Skills for Seasoned Networkers
A seasoned networker knows the real meaning of networking -- being organized, efficient, effective, and, of course, work the event to its fullest. Attending networking groups after so many years can tire and drain anyone’s excitement. Especially...
Understanding Financial Statements When Approaching Lenders
“The bank is asking for our financial statements”, these are 8 words that often bring apprehension to many business owners. They are a young and maybe struggling company, they need bank financing to survive, and they haven’t got a clue what the...
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How To Realistically Set Your Fees - Part 1
We all know there are 52 weeks in a year and 40 working hours in a week. Therefore, we can bill 2080 hours per year, right. Wrong. Too often this is the trap that many new service businesses fall into.
The first step in calculating your billable hours is to define a realistic working year. If you were employed elsewhere, you would expect or want at least two weeks vacation time, one week sick time, one week personal time and paid holidays. So, where does that leave us - 52 weeks minus four weeks leaves 48 weeks minus about 10 paid holidays, or a total of approximately 46 weeks per year.
OK, you say, that means I can still bill for 46 weeks times 40 hours per week or 1840 hours per year. If I charge $25 per hour that comes to $46,000. Not bad, that is more than I was making on my previous job. Wrong.
What you have just established is a realistic working year, not the number of billable hours. You still need to account for marketing time, administrative time, bookkeeping time, equipment maintenance, continuing education, etc. You also need to calculate in equivalent time for self-employment tax, local business taxes, etc. In many locales, this can add up to an additional 20% or so in time or money.
If we assume approximately one hour per day for marketing and one hour per day for administrative, etc., (and this is a very conservative estimate, then we need to subtract: 46 weeks times 5 days per week equals 230 days at 2 hours per day equals 460 hours, from 1840, for billable time left in a year of 1380 hours. Now
subtract approximately 20% for the above taxes or 276 hours and that leaves you with 1104 billable hours in a year. And this may still be high, but at this point, you can see to earn that $46,000 per year you will need to charge $46,000 divided by 1104 hours or about $42 per hour.
There are many factors which need to be examined in setting your fees. We'll look at those items that need to be taken into account, such as business expenses, insurance, pensions and profit margin, in upcoming articles.
Hopefully, this article has at least pointed you in the right direction.
Next article we'll take a more in depth look at the role expenses play in setting your fees.
Copyright 2003, DeFiore Enterprises.
Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 17 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our FREE "how to" Home Business Solutions Digest, it's like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com
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