Tools · free calculator
What do you need to charge an hour?
Almost everyone sets their price by looking at the guy next door. This runs it the other way around: from what it costs you to live and work, which is the one number you cannot ignore.
What you need to charge an hour
The hours you actually bill are almost never forty. Between quoting, driving, invoicing and chasing materials, half the week is gone. Put in the ones you can charge someone for.
Why the guy next door is a bad starting point
Setting your price by looking at his means copying someone else's costs, someone else's speed and someone else's years of experience. If he works out of his house and you pay rent on a shop, the same number leaves him earning and you losing.
The math above starts from yours. After that you can look at the market, to know how far off you are and why, instead of copying blind.
Unbilled hours are what sink the price
This is the mistake that costs most. Somebody works out their rate by dividing across forty hours, when only twenty-five of those forty are being charged to anyone.
The other fifteen still have to be paid for, and they can only come out of the billed ones. That is why the real hourly rate is always higher than it first looks.
What to do with the number you get
If it comes out well above what you charge today, do not raise everyone at once. Start with new quotes and leave your long-standing customers for later.
And if the number looks impossible to charge in your area, the problem is not the price: it is how many of the hours you work can be billed, or the kind of work you are taking.
If after running the numbers you want the page built, it is a five minute phone call.