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Terry Stone Business Performance Solutions, LLC 38 Poor Farm Rd. Colchester, VT 05446 802-878-3550 [email protected] www.bpsvt.com Growth through Planning & Problem Solving
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Terry Stone
Business Performance Solutions, LLC
38 Poor Farm Rd.
Colchester, VT 05446
802-878-3550
www.bpsvt.com
Growth through Planning & Problem Solving
Calculating Earnings: what you need to earn from your business.
Setting rates within your market
Charging for extras – or not
When to raise your rates
Business Performance Solutions 11/10/2010
“Billable” Hours
40 hr/wk x 52 weeks = 2080 hours/yr
160 hrs. = 4-weeks vacation
168 hrs. = 12 personal days + 9 holidays
384 hrs. = Admin work, Marketing/Networking,
Scheduling, Continuing Ed, Job Bids (1-day/week for 48
work weeks)
192 hrs. = Non-billable time, down time, delayed
projects, rescheduling, etc. (4-hrs per work week)
Total non-billable time = 904 hoursTotal billable time = 1176 hours per year (24.5
hrs)
General Rule – use 1000 hours to set your price
(20.83 hours)
Business Performance Solutions 11/10/2010
$52,000 salary = $25.00 per hour
$52,000 SE income:
Based on 1,200 billable hours
$67.28 per hour (25/hrs wk)
$81,096
Based on 1,008 billable hours
$80.73 per hour (21/hrs wk)
$81,376
Business Performance Solutions 11/10/2010
Evaluate your competition’s pricing within your industry
Evaluate your competition’s pricing within each geographic area
ADJUST your rates accordingly
Business Performance Solutions 11/10/2010
Travel Time and/or mileage
Postage, special delivery, faxes, copies
Travel Expenses – actual vs. per diem
Specialized computer programs, equipment or other supplies
Administrative costs
When NOT to charge…
Minimal cost – not worth tracking
Industry practice is to not charge
Goodwill – but, list on bill as “no charge”
Business Performance Solutions 11/10/2010
When increases in costs begins to eat into your profits
When you increase your overhead to better service the clients
When you increase your knowledge and credentials in relation to the competition
When you invest in equipment or systems that result in increased speed
At a minimum, increase your rates annually to cover inflation (Don’t let your “boss” refuse an annual raise )
Business Performance Solutions 11/10/2010
If you’re a consultant, your KNOWLEDGE is your inventory… don’t give it away
If you are in retail, AND make your own inventory:
Price first as though selling to an unrelated retail establishment, then…
Price at retail as though purchasing your products from an un-related wholesaler.
Don’t let clients walk away with your inventory without paying for it, and price your inventory at full retail.
Business Performance Solutions 11/10/2010
Terry StoneBusiness Performance Solutions, LLC
38 Poor Farm Rd. Colchester, VT 05446
Growth through Planning & Problem Solving
Q & A
