The Money Value of Time – Personal Pricing – What Am I WorthPosted on December 19, 2014
This is a useful calculation for time management.
Print this page out, write your answers beside mine, don’t think too much!
Annually, I make the calculation at the level of Business, Family, Household and myself.
Today, I share the calculations for my consulting business.
Start with time:
- How many weeks a year do you want to work?
- How many days a week?
- How many hours per day?
Weeks * Days * Hours = Billable Hours
That’s the time that you have in a year to generate revenue.
What should you charge per billable hour?
Desired Net Income + Overheads = Gross Revenue Req’d
Gross Revenue Required / Billable Hours = Rate Per Hour
A case study from my 40s to illustrate:
The first column was my 2009 goal for my athletic consulting business.
- Generate $5,000 per month net cash contribution to my family
- One week per quarter spent training alongside the team
- Four hours of focused work per day
- One day off per week
The second column was reality, and it was a good life.
- Work every day
- Discover I can only be productive for three hours per day
- Take two weeks off and return to 1,500 email messages – realize that I can’t “bill” for my email inefficiencies!
The third column is a goal for my 50th birthday.
My goal either seems small, or large, depending on where you’re at.
It helps that I work for people that “bill” at large multiples of my target.
- Understand: Your average billing rate is your new minimum
- Vow: I will stop doing low-value work
- Consider: Where can I deliver 2x my billing target in value added
Can I be 3x more efficient than a $35 per hour coach? Yes. The two-year transition was painful but I got there.
However… when I arrived at the middle column, I needed to make a decision moving left (for a little more time) or moving right (for way more time).
Increasing my value added per hour requires more than simply guiding exercise. Shifting towards far greater value added makes sense.
How much of your time is spent on what brings satisfaction to your life?
The table below came from a recent coaching clinic – I asked the coaches why they coached.
In business, family, love and parenthood…
What’s your why?
Share experiences with the people that love me.