How does this effect our hourly rate, 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 $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, 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 amount you need to charge to cover all we discussed so far.

Compare this to 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 same place. Don't be discouraged, there are many people out there that are charging a lot more than this and getting all business they can handle. Remember, these numbers are hypothetical, your situation may be much different.

Copyright 2000, DeFiore Enterprises.

To obtain a network of experts, leave messages on Internet; put ads in publications that relate to your business, go to trade shows, meetings and join groups that relate to your area or product. Be sure to determine that individual you want to use as a referral is a good source for your customer base. Remember to contact a customer after giving a referral to insure that they received information/product they needed and were satisfied, and if not ask why. A referral network is used to increase business. You want to insure that your 800 number increases business and pays for itself.

Copyright DeFiore Enterprises 2000