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Further
Reading ...
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Is It Costing You More To Work? - Kara Kelso
Is It Costing You More To Work? by Kara Kelso http://www.momsezine.com With today's day care costs on the rise, and gas getting just as high, are you really making money with your job? Make a list of all your costs. Include things like oil...
Simple Information Products That Sell Like Wildfire! - Jeff Smith
Put your hand up if you think infoproducts take months, even years to develop? Hold that thought! Remember your parents or teachers telling you to "try harder", "spend more time at it", "work harder", "be dedicated". You rarely heard them say...
Get Thousands of Affiliates to Market Your Product Instantly - Charity Adams
Affiliate marketing is awesome for generating a flood of leads or sales, but you need thousands of affiliates to create a significant impact in your marketing strategy. Creating a large enough affiliate base to be effective could take months if not...
How I learned to Succeed Online, Finally - Mike Cantwell
If you thought anything like I did several years ago, you probably thought you could just THROW up a website and make money. You know, like the ones our "friends" at Dead yellow offered. FREE Website, FREE e-mail, FREE money,...
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How To Realistically Set Your Fees - Part 2
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Written By:
Sue and Chuck DeFiore
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Effect of Expenses
The last article examined how to calculate your realistic billable hours. If you remember, we arrived at approximately 1100 hours in a year. To earn our mythical $46,000 per year, you needed to bill at a rate of $42 per hour. Now we need to take into account the expenses of running a business and see where those put our hourly rate.
Most costs fall into three general categories: business and office expenses; salary and personal taxes; and, benefits and profit margin. In this article, we will concentrate on the first category, business and office expenses.
Everyday expenses are part of doing business, and these must be reflected in the prices you charge or you will not be in business for long. Expenses to consider are rent for office space. If you are home-based, you will still have an increase in utilities, such as gas and electric over your regular household bills. You will have telephone costs, postage, copying costs, stationery, office supplies, subscriptions and possibly, membership dues.
You will also need to make periodic upgrades to your office equipment and furniture. Items such as computer hardware and software; fax machine, copier, filing cabinets, telephone headsets, etc. All of these items add to the hourly rate you charge for your services. You must have a good estimate of what these costs total each year or you will end up cheating yourself. If you do cheat yourself, you are going to drastically increase your stress levels and lose much of the enjoyment of running your own business.
Let's plug some numbers into our costs and see how they affect our hourly rate.
Rent $600 per month x 12 = $7200
Utilities $100 per month x 12= 1200
Telephone $100 per month x 12 = 1200
Postage $100 per month x 12= 1200
Copying $50 per month x 12 = 600
Stationery $25 per month x 12 = 300
Supplies $50 per month x 12 = 600
Upgrades $150 per month x 12 = 1800
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/>Furniture $50 per month x 12 = 600
Yearly Total = $15,300
The yearly total comes to $15,300, divide this by 1100 billable hours and you get approximately $14 per hour. Now add this to the original $42 per hour and you can see that you need to charge $56 per hour to cover your hoped for $46,000 per year income plus your expenses. If you are home-based, you can subtract the $7200 per year in rent or about $6.50 per hour from the $56 above.
I have made a number of assumptions in arriving at these figures, your costs may be more or less, but this will give you an idea of what to look for and how to calculate your expenses. If you have any questions, write to me or give me a call and I will go over your situation with you.
Remember, in order to be fair with yourself and your customers, your prices must reflect the true cost of doing business. Do not ever apologize for your prices. You need to charge enough for you to live on and enough to stay in business to service the clients that have come to depend upon you. If some of your customers can't understand this, change your customers, not your prices.
Copyright 2003, DeFiore Enterprises.
Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 17 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our FREE "how to" Home Business Solutions Digest, it's like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com
coaches@homebusinesssolutions.com
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| _Additional Resources ... |
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Working an online Business form home - Deva Naumann
Hi Friend, I wrote this article to try to help those who are interested some helpful information for their own online business. If you already have a website or product. It can be difficult working an online business if you have no clue where...
Direct loans, the new way to fund going to college - Jakob Jelling
Going to college can be an expensive proposition for both the student and the government. Many people are finding that going to college is an impossible dream due to raising tutitions and cost of living unless they receive help in the form of a...
Am I Normal? - Jackie Ulmer
It's 3:00AM and instead of sleeping, I'm trying to figure out how to get listed near the top of the search engines. Am I normal? Am I normal? I pondered that question this morning while I quickly checked email one last time before shuffling the...
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