As a business professional do you charge what you’re worth on a monthly, weekly, daily or hourly basis?
If you say “probably not” you are not alone.
As a business owner this is an essential element in setting yourself and your business up for success.
It’s not about product or stock, but YOUR actual hourly rate.
Often business professionals under charge for their time as they are afraid of not getting new business and possibly losing current business.
There are 3 numbers that you should know to ensure that you are charging what you are worth
- Do you know what your hourly cost is?
- Are you paying yourself a fair, market related wage?
- Are you making a reasonable profit per hour?
Let’s explore these in a little more depth
- Do you know what your hourly cost is?
Your standard hourly costs can include hourly expenses such as contractor and employment costs.
However, you also need to include all of your overheads such as rent, rates, electricity, cleaning, insurances, memberships, registrations and licences.
Other costs to factor in include training costs, marketing expenses, conferences, travel and certifications.
Your bookkeeper should be able to assist you in establishing an actual “per hour cost” for running your business.
- Are you paying yourself a fair, market related wage?
Perhaps you are paying yourself a salary… or maybe not because “the business can’t afford it.”
When establishing your salary, it should be market and experience related. The question to ask is, “if I had to employ someone of my calibre to do THIS, what would I pay them?
If the business can’t afford to pay that then it’s not a business… it’s an expensive hobby!
- Are you making a reasonable profit per hour?
This may depend on your business goals.
The starting point is establishing where you want to go and by when.
Next establish where you are.
Now develop a road map to get you there. Ultimately your profit should be able to get you to where you want go within that time frame.
Once you know what your hourly rate is, ensure you are paying yourself a market related wage and are making a reasonable profit per hour you are well on your way to setting yourself and your business up for success!
If you are wanting to work with a bookkeeper who is able to assist you in answering these 3 critical questions, I invite you to reach out to me so we can have a chat and see how I can help you.
