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Find your "just right" pricing strategy:

Calculating Billable Hours. Where Does the Time Go?
by Molly Gordon, MCC

When you are starting out, you may have time on your hands, but I recommend you use every hour you are not spending with clients to build your offer and market it. When you have more time than money, use your time to develop your business.

As your business develops, you will discover that in most fields, administration and marketing will take at least half of your time. That means that of all the hours available in the workweek, you will be doing well if you can bill half of them. I’d love for you to be the exception to this rule, but until you have a proven track record of billing more than 1,000 hours per year, please do not assume that you can.

Before going any further, use the chart below to estimate your annual billable hours. If you earn your living by selling products or artworks rather than service, your calculations will be somewhat different. However, the principle that up to one-half of your time may be required for marketing and administration remains the same, as does the importance of accounting for vacation, holidays, and sick days.

When you know how many hours you can expect to bill, you are ready to determine what it will cost you to run your business by calculating overhead and profit.

When this chart is complete, you can calculate your hourly rate based on what you want to earn and what it will cost you to earn it. I suggest you do three calculations: one quite conservative, one based on your ideal picture, and one middle-of-the-road. Having a range of figures will help when you compare your results with what clients expect to pay and with what your competitors are charging.

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Learn more about Authentic Promotion - a comprehensive small business marketing resource that turns marketing and self promotion into a path of increasing self-awareness, authenticity, and right livelihood. In particular, the pricing strategies you learn to apply will build the solid foundation for your authentic prosperity as an entrepreneur.

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Contact an acknowledged expert on small business marketing Molly Gordon at:

Shaboom Inc. Life could be a dream…
PO Box 195
Suquamish, WA 98392-0195
mgordon@authenticpromotion.com

As a business coach and small business marketing consultant, Molly Gordon, MCC, is available in Greater Seattle Area and internationally