Do you work for pennies – not dollars?

By Jerry Bellune

Our friend Ruth King analyzed one of her client’s financial statements and found he was earning 34 cents every billable hour.

Don’t let this be you, too.

Calculate your net profit for each revenue-producing or billable hour dividing your net operating profit by your total billable hours.

If you earn less than you could at a fast food restaurant, maybe you ought to work at MacDonald’s – or consider doing this:

• Figure out what you actually earn.
• Decide the net per hour you want.
• Decide how to earn that amount.

You might increase your employees’ productivity or raise your prices. You can add value to justify increasing prices.

Or you might bill for every hour you or your employees work on a client’s project.

Ruth’s client gave customers a flat rate for a project and invested hours more than estimated. He over- delivered more than promised but spent hundreds of unpaid hours doing it. His clients got a great deal but it was costing him money.

Did he lose any clients when he increased his project rates? No. His clients valued his expertise.

Calculate your net profit per hour. If you aren’t earning enough, raise your rates.

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Copyright 2018, The Bellune Co., Inc.