Most of us know what we make in a year. Or at least some projection of what our business will throw off to us.
But what’s your hourly rate?
I’ve been in rooms where people brag about how many hours they work. It’s a weird flex for sure, especially when you’re salaried.
As business owners, we don’t have the ‘salaried’ problem. If our business is more profitable, we make more money. That doesn’t free us from the same question, but it does turn it around a bit.
A quick example, I pay a neighborhood teen to cut my lawn. They charge $40. It takes me an hour to cut it myself. There are so many activities I can do with my business that are worth more than $40/hour. Instead of wasting an hour cutting my lawn in the blazing heat, I do something more profitable.
Same for within your business. Sure, you can probably do most things more efficiently than an employee, if only because you have more info and context. However, for every thing you say yes to, you are saying no to something else.
Back to your hourly rate. You want to earn the highest hourly rate for your business. Closing that large sale might make you $5,000/hour for the work you put in. Establishing a new supplier might increase your business value by several percent. A new employee could free you up to work on lots of higher value initiatives.
Even just knowing what your hourly rate is, or having a targeted rate, is very valuable. I spoke to another business coach that will consult on marketing packages. When I asked how much they charge an hour, they didn’t know as they charged a flat fee.
How can you turn away lower value work if you don’t know what your hourly rate is?
Here are some questions for you to think through with regards to your hourly rate:
- What task/job in your business do you make the most from, per hour of effort?
- What about the least?
- Is there enough of this work to delegate it to someone else?
If the work is ‘too complicated’ for someone else to do, look out for my next article on creating a process.
If you don’t know what your business is worth, or even how much you need to retire, reach out!