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Here is a method to help you determine what you should be charging for your services. The resulting amount will be an estimate of what you should charge, based on how much you wish to make per year-realistically-and your overhead.
1. There are 365 days in the year. From 365, subtract 14 days for vacation, 9 days for holidays, 5 days for sick time, 12 days for training, 44 days for marketing, 104 days for weekends, and 28 days for administrative activities. This leaves you with 149 "work" or "billable" days. Based on a typical 8 hour day, that gives you 1192 hours that are available to render your services.
2. Let's assume that you need an annual, personal income of $40,000. You can change this number to suit your own needs, but in this example, we need $40,000 per year.
3. Add together the following expenses:
Our total is $23,200. In our example, we work in a home office, and don't pay rent. If you do pay for office space, you will also need to add that yearly total, along with any other annual expenses not listed here.
4. Add our $40,000 salary to our $23,200 overhead. We have a total of $63,200.
5. We have a total of 1192 hours in which to earn the $63,200 that our company needs to meet expenses and pay our required salary. Divide $63,200 by 1192. It averages out to 53.00 per hour.
6. You should add about 15% to 53.00 for your businesses profit...which means that, in order to meet your expenses for your business, and pay yourself the salary that you need, and make a profit for your business, you should charge around 61.00 per hour for your professional services.
Please change the information in this formula to suit your own needs...as everyone's needs are different. Perhaps you need a $50,000 salary. Maybe you have less expenses, or other expenses than the ones listed above. Maybe your business needs a 20% profit margin. You will have to change the basic information to get the amount you should charge.
