Thursday, January 5, 2012
How do I charge enough?
This is how to live the lifestyle you want. Answer these two questions:
1. How much money do you want in a week?
2. How many hours do you want to work in a week?
Now figure it out. Here are my answers, using the example of a Christmas light installation company I'm starting:
2. 40 (36 hours install, 4 hours overhead)
$1500/36 = $41.67/hr
So to get to $1500/wk, I need to get 36 hours worth of work at that rate, or less work at a higher rate, etc.
Since I'm looking at splitting the profits 50/50 I'll have to bill accordingly, around $83/hr. Plus there's driving time to and from jobs, travel costs, some fix-up jobs after the work has been done (which may be included in the initial install) so I'll want to bill a little higher than that $83/hr.
Let's look at 36 hours of work and say that only 2/3 of that "work" will actually be doing installs. Maybe that's a little conservative... Yep. I'll want to bill above that.
Am I going to be able to get enough business? Good things happen at the Exchange Cafe. Thanks Mario for the advice!