What is the value of your time?

 

Every business owner faces this quandary.

What are my talents worth? What is the market rate?

How can I generate enough revenue to make a

successful living while pricing my services or product

at a rate that is attractive to potential buyers?

 

First, consider your financial requirements. Think about

overhead costs, including travel, equipment, office

space, websites, marketing materials, and advertising

costs. Do you need to stock inventory or hire staff? 

You must budget for health insurance and possibly

liability insurance. If you are a LLC or Corporation, you

must think about legal fees, filing fees, and other general start up cost requirements. Uncle Sam requires his share. Oh yeah – and you have to pay yourself too. Overwhelmed yet?

 

The good news is that many of these costs are isolated occurrences, but nonetheless – they are out of pocket dollars you may not see again for a while. You may incur costs that will be reimbursed at a later time…but will you have the up-front money until your reimbursement comes through?

 

The big question: what is a reasonable fee that will generate interest and still cover your costs of doing business, including a salary to yourself?

 

Consider the following:

 

1. Figure out how much you need to earn (what did you make last year? How much more do you want to make this year?)

 

2. If you have recently left a regular job that included benefits, add 20% to cover health insurance.

 

3. Are there any equipment costs or major start up cost investments you need to make?

 

4. Divide your new figure by the number of hours you plan to work in the year (a forty hour work week = 2080 hours per year).

 

5. That is your hourly rate…the value of your time.