Dick Quinnell (blacksmith from the UK) summed it up the hourly rate figuring as:
add up the total expenses and personal income you need to cover for the year.
Allow for the fact that you need a holiday once in a while, you might get sick or you might have to go and do a course or attend a conference, so you might get say 45 working weeks in the year
then look at the amount of chargeable time you get out of a day on average, say 5 or 6 hours a day - that doesn't count time spent answering the phone, getting supplies and doing your paperwork.
Then divide your total income up by 1350hrs at 6hrs a day and there you have a your required hourly rate.
Its also worthlooking at it as a weekly and monthly income level. And of course this takes keeping records of what you do so that something you underpriced once doesn't bite you on the bum again. We can but hope!! :-)
But when you don't have a history of information to work from, just gauging what other local trades charge is useful. At least its a starting point. We have a flat rate of $75/hr at our shop but I like what Jake mentioned about charging different work at different rates according to the skill they require. Then of course working out how long a job will take to do is a skill all unto itself, and only comes with doing it as far as I've found. We keep a simple time notebook in our shop and make a note of the time whenever we change tasks, even if its to go for a pee or answer the phone.
I think its the eternal problem myself! Best of luck getting your charge-out time right.
Dick Quinnell (blacksmith
Dick Quinnell (blacksmith from the UK) summed it up the hourly rate figuring as:
add up the total expenses and personal income you need to cover for the year.
Allow for the fact that you need a holiday once in a while, you might get sick or you might have to go and do a course or attend a conference, so you might get say 45 working weeks in the year
then look at the amount of chargeable time you get out of a day on average, say 5 or 6 hours a day - that doesn't count time spent answering the phone, getting supplies and doing your paperwork.
Then divide your total income up by 1350hrs at 6hrs a day and there you have a your required hourly rate.
Its also worthlooking at it as a weekly and monthly income level. And of course this takes keeping records of what you do so that something you underpriced once doesn't bite you on the bum again. We can but hope!! :-)
But when you don't have a history of information to work from, just gauging what other local trades charge is useful. At least its a starting point. We have a flat rate of $75/hr at our shop but I like what Jake mentioned about charging different work at different rates according to the skill they require. Then of course working out how long a job will take to do is a skill all unto itself, and only comes with doing it as far as I've found. We keep a simple time notebook in our shop and make a note of the time whenever we change tasks, even if its to go for a pee or answer the phone.
I think its the eternal problem myself! Best of luck getting your charge-out time right.
Lynda