We’ve worked with many people who have a great business with good products, services and people – but they fail to make any money. In most cases, by asking two questions, we get to the bottom of why people are stuck in a cycle of undercharging for their work:
- How have you calculated your hourly rate?
- What mind-sets are holding you back?
Nell Merlino, founder of the Make Mine a Million $ Business Program, is known to have said “If you’re making £32,600 ($50,000) or less in your business, it’s not a business, it’s a job, and it’s not a good job either.”
If you find yourself stirred by this message, then you need to read on.
Are you undercharging for your work?
As a freelancer or contractor, setting your hourly rates can be daunting (and risky). Often those who are contracting for the first time fail to consider the costs you now have to carry, that would normally be covered by your employer – such as taxes, insurance, licensing, and other business necessities. Have you factored in the amount of hours you spend on non-billable activities such as answering emails, administration, and invoicing?
As a contractor you need to adjust your hourly rate to compensate for your holidays, bank holidays and sick days each year. These are all serious considerations that can lead to dreadful results if you have not though about how to calculate your hourly rates correctly.
Do the math now
This great infographic created by Ryan Robinson from ryrob.com and CreativeLive will help you get close to what you should be charging per hour as a freelancer or contractor. Ryan teaches entrepreneurs how to start a business while working full-time.
Surprised? Imagine being employed by someone else, sweating for 18 hours a day just to make ends meet, and still only earning £32,600. I’m sure you would do something about it! Find out in our next post what critical factors lie behind a failure to make enough money.
Our team of contractor specialists can help you with setting up and running your business, as well as helping you to calculate your hourly rate to stay profitable. Send us an email!