Here is a business expense breakdown done on excell for those people who want to know how much to charge hourly to be profitable, how much is going to expenses, profits etc.
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Please note I had not updated the first 2 lines on my excel sheet
The actual yearly price for line 1 is $4800 and for line 2 is $3000 (not $3384 and $2160)
Also it changes:
Yearly total from $56,172 to $58,428
Grand Total Yearly from $133,772 to $136,028
These changes did not affect the hourly breakdown as they are properly done
So here is the formula to break down your hourly rates:
Hourly:
=400/35/4
= Monthly Cost / Weekly Paid Hours / 4 Weeks a Month
Yearly:
=400*12
= Monthly Cost * 12 Months a Year
you assume the 35 hours a week doesnāt change? (9 hour workday 5 days a week by my averages after drive times etc)
how about winter, summer, sick, vacation, holiday, personal?
I propose the .85 modifier (lower like .7 if in harsh winter areas)
35 hours a week x 52 weeks really ends up being 29.75 a week as a 52 week average of the last 12 months
74.28 really needs to be at least 87.39 to equalize that
plus thatās a 9 hour work day
things should be based on 8 hours, why should you give away an hour a day for āfreeā to make your budget?
at 8 hours a day, with 6.2 per day on the job ābillable hoursā that comes out to 31 'on the job" hours a week which would mean $98.66 per man hour or $135,184 gross revenue per year
of course, you can gain a little annual revenue āheadroomā working longer days, Saturdays etc, but that should be extra, otherwise its like someone banking on overtime all the time
in other words: charging $98.66 per man hour will give you $135k a year AFTER sick, weather, holiday, vacation , personal time off and working 6.2 billable on the job hours in an 8 hour workday
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like I said, the modifier becomes .7 (8.4 working months out of 12) or similar instead of .85
charge $120 per man hour = $135k a year
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or stick to oneās guns at 74.28 and end up at $101k or 83,817 in harsh winter areas
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@Bruce
+1
I love the systematic thought process you use.
Great input Bruce thank you for sharing great information with all the forum members.
Thanks for the input fellas. Its great to get the conversation rolling. The reason for 35 hours/week had to do with a lot of billable/non billable hours, how many hours youre actually working (deducting lunches, breaks etc)
Also its just a basic breakdown. For example i used it to get my base hourly price which was basically $75/hr. That is the minimum i have to charge the client.
When i started i knew min i had to charge $75. But because im in business to make money when i quoted the client i charged 80$ (thats an extra $5/hr). The next year i bumped my prices up to $90 and now this year i cranked it to $120/hr.
You can tweak everything and make it work for your part of the country, state, province, etc. (changing the formula)
Here in the Pacific northwest (vancouver) we can still work year round winter months are a lot leaner
