How To Realistically Set Your Fees - Part 3 Home Business Articles | April 22 Ilya Kovalchuk Kings Jersey , 2002 Effect of ... have ... examined ... billable hours and the effect of business expenses on your hourly rate. Now we'll look at the effect of ... upon at time, when we were
Effect of Benefits
We have previously examined realistic billable hours and the effect of business expenses on your hourly rate. Now we'll look at the effect of benefits.
Once upon at time, when we were employed, we received a benefits package from our employer. This usually included health, life and disability insurance. Many firms also had available pension programs, profit sharing Adrian Kempe Kings Jersey , dental and vision coverage. In addition, one-half of your social security was paid by your employer.
As self-employed individuals, we have to provide these benefits for ourselves. This means an additional boast to the hourly rate we've calculated so far. For the sake of argument, let's figure a standard benefits package consisting of health, life, disability Oscar Fantenberg Kings Jersey , pension and profit sharing. Let's figure health insurance costs at $300 per month; life at $50 per month; disability at $150 per month; pension (a SEP-IRA) at $500 per month and about 10% for a profit margin.
If we total these up we get a yearly figure of $12,000. Now keep in mind, that most of these will be paid for in after tax dollars. So, we need to add approximately an additional 30% to this number, for a true total of about $15,600 per year. The 30% represents the amount of taxes you need to pay to end up with the net amount of money needed to pay for your benefits package. Keep in mind that I chose 30% as a completely arbitrary number. Your own tax situation may be higher or lower.
How does this effect our hourly rate Jake Muzzin Kings Jersey , let's see. Last article we left off at $56 per hour. This represented a yearly salary of $42,000 plus annual business expenses of $15,000. If we take the $15,600 in benefit costs and divide by our billable hours of 1100 per year, we get approximately $14 per hour. This brings our total hourly rate to $70 per hour.
Now, we need to factor in our profit sharing percentage. Once again Dion Phaneuf Kings Jersey , I choose 10% as a representative number. Your targeted profit could be higher or lower. If you take your $70 per hour rate, multiply by 10%, you end up with $7 per hour. Your total hourly rate comes to $77 per hour.
This is the amount you need to charge to cover all we discussed so far.
Compare this to the approximately $20 per hour you would need to get paid by an employer to earn our hypothetical $42,000 per year. And yes, I know today many employers require a co-payment on their benefits package. I stated it this way for simplicity sake.
So, you need to charge almost 4 times what you would earn in salary to end up at the same place. Don't be discouraged Jonathan Quick Kings Jersey , there are many people out there that are charging a lot more than this and getting all the business they can handle. Remember, these numbers are hypothetical, your situation may be much different.
What do you do when it just ain?t working? ECommerce Articles | March 23 Dustin Brown Kings Jersey , 2007 You slave away hours and hours of blood, sweat and tears put into your marketing campaign. The big day comes?and a good old WHACK upside the head! It just isn?t doing what it supposed to do......
What do you do when this just aren't going as you had hoped?A classic problem that every business will face.
You slave away hours and hours of blood, sweat and tears put into your marketing campaign.
The big day comes? and a good old WHACK upside the head! It just isn't doing what it supposed to do.
I ran into this recently with a client of mine. A very unique product that helps you lose weight while you sleep, not with magic pills or fad diets or slaughterhouse exercise routines?but with something much more subtle and long lasting.
Right from the start, I knew the challenges were:
1) Major competition. Some of the biggest players out there sell into this billion dollar marketplace. They have budgets up the yazoo. They have entire departments focused in on each advertising campaign.
2) Skepticism. For good reason. With all the diet books, plans Anze Kopitar Kings Jersey , foods, fads and pills out there, everyone has the magic cure?or so they say. People who are concerned with their weight have probably tried some of these plans, a select group has tried most of them. Chances are with dismal results.
3) Believability of the ability to lose weight while you sleep. It is the perfect diet plan right? But it sounds too good to be true.
With that in mind we went about some smaller tests with the campaign I wrote. It did ok, nothing stellar, but a 3% order rate is not too bad?could be better though.
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