In today’s Vlog 30, Day 14 of my Intermittent Fast I discuss how to figure out “How much should you be making per hour?”
So many of us have ran into this struggle, how much should we be making per hour? What should be charging? Are just a few of the questions I know I’ve personally asked myself. Once I figured out exactly how to figure this out for myself. I started to teach the people I work with out to figure this out for themselves.
This is why this formula is extremely important to understand because it will make sure that you are not paying to work.
The formula goes like this
Take all your monthly expenses and calculate them into a monthly expense. The add them all together to get a grand total. For example
Land Line $100 per month
Cell Phone $100 per month
Car insurance $100 per month
Gas for car $100 per month
Lets say with all my expenses my Total $4,000 per month for this example now divide that number out by 4 this will give your total weekly cost for your expenses, Mine equals $1,000
This is where you need to figure out how much you want to work.
a) How many days do you want to work per week? Is it 7 days, 5 day, 4 days…etc you have to figure that out.
b) How many hours do you want to work per day? 8 hours, 5 hours, 4 hours…etc you have to figure this out for you but be realistic.
in my scenario I work 4 days a week 5 hours a day that is my goal
Step 3 is
I take my total weekly expense of $1,000 and I divide that by my 4 days work week and then I divide that by my 5 hours I work per day.
($1,000/5)/5 = $40 per hour
This gives you the exact amount you need to pay for all your expenses. This is what I consider is your floor hourly rate. No matter what you due, you never ever go below this hourly rate or you will be paying out of your pocket to work.
Step 4 Add in vacation and training.
Here is a trick I use
Say I want to go on Vacation 4 weeks of the year, plus I want to go on at least 2 courses 1 week a piece so that is 6 weeks in total. We know there are 52 weeks in the year so now I am working 46 weeks out of the year in this scenario. This is if you have a business that you only get paid if you work each hour. There are businesses systems that people do get paid for their products, training…etc. because they have setup eCommerce systems that run automatically. This if for the people that only get paid for the time they work.
We know the floor is
$1,000 x 52 weeks = $52,000 per year you need to make to pay your expenses.
now you are only working 46 weeks but still need to make $52,000 per year.
Here is the formula to figure this out.
$52,000 divided by 46 weeks in your new year of revenue divided by 4 days a week and 5 hours a day
$52,000/46 = $1130.43 / 4 days a week = $282.61 / 5 hours a day = $56.21
Now your new floor rate is $56.21 per hour.
Step 5 Now lets figure out your ceiling rate.
This can be as much as you realistically want, again it has to be in reason to people in your industry. If you are a personal trainer and the average trainer with your skill set charges $100 per hour. You will not be able to charge $250 a hour and make a living you have to stay close to what the market value is.
I would try starting out at 30% increase to your floor up to 50% increase
30% would be $56.21 x .30 = $16.86
Then add $56.21 + $16.86 = $73.07
easy formula would be $56.21 x 1.30 = $73.07
Now you can round this up to $75.00 per hour for ease of use, marketing…etc
50% would be $56.21 x .50 = $28.11
Then add $56.21 + $28.11 = $84.32
easy formula would be $56.21 x 1.50 = $84.32
Now you can round this up to $85.00 per hour for ease of use, marketing…etc
I hope this really helps you figure out your true value and you make the money you deserve to make.
Watch the video above to learn more.
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