6 PRO • Volume 22 Number 1 • December 2009 • www.promagazine.com
ASK A PRO
WHAT SHOULD I CHARGE?
Q: If you’ve tried networking a year for trucks and equipment. (Gas an hour for overhead).
with contractors in your area and maintenance are really variable Throw in the seasonality of the
but they just won’t share any overhead items, but I am trying to keep business and you really may only bill
info with you, how do you find this simple.) 1,500 hours a year, making your over-
out what the next guy is charg- Even in a small company where you head $14.67 an hour. Now you are at
ing for his services? do the work yourself, you will have at almost $35 an hour.
least another $5,000 a year in non- You are right, it can be difficult to
Here’s the thing: You need to figure field owner’s salary. determine what to charge because
out your own prices. If you go ahead Cell and business phone is another your competitors aren’t going to tell
and charge $35 an hour when your $2,000. you. We teach a program that helps
real cost is $45 an hour, you are going Throw in other overhead costs like with this, and also cover it through our
to lose a lot of money. business license, office supplies and networking groups. Our “Knowing Your
Start with a simple expense bud- business insurance for another $3,000. Numbers” CDs are also very helpful
get. Here’s an example. Keep in mind This puts us up around $22,000. with pricing. Feel free to give me a call
that this is only an example using very Suppose you work 40 hours a week for some free advice.
basic numbers—you need to run your and 50 weeks a year. This equates to
own numbers to figure out your own 2,000 billable hours. If you bill 2,000 Thanks to Monroe Porter of PROOF
scenario. hours a year, that’s $11 an hour for Management Consultants
A truck with insurance, depreciation, overhead ($22,000 divided by 2,000 for answering this question.
gas and maintenance is going to cost hours).