Podcast

How to work out your hourly rate

S27-E7 - Featuring Lee Matthew Jackson

May 20, 2019

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.

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.

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