27:7 How to work out your hourly rate
Pricing your projects or working out your hourly rate need not be complicated. In this episode I walk you through how to calculate both a reasonable and logical hourly rate and use that to price your projects and set achievable financial targets.
Pricing your projects or working out your hourly rate need not be complicated. In this episode I walk you through how to calculate both a reasonable and logical hourly rate and use that to price your projects and set achievable financial targets.
The breakdown
- What lifestyle do you want for you and your team
- Calculate capacity and hours available
- Work out your costs to survive
- Establish how much you want to turn over to include profit
- Compute the base rate
- Mark-up the base rate inline with the industry
- Use your rate to calculate reasonable productised project prices
- Set targets for how many of each productised service you’d need to sell per year
Example calculations
Available hours / capacity = Billable hours
Sales target / billable hours = Base rate
Base rate + margin = Sales rate
(Hours per project * Sales rate) + Margin = Project rate
The workshop
If you are a premium member, you can check out our workshop here that will help you:
- Work out your costs
- Work out your financial targets
- Work out your billable resource
- Work out project rates
- Sanity check you can deliver
- Establish your yearly sales targets
- Build on recurring revenue
If you are not a premium member you can join here.
