PROBIRT Forums: time - money management

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Topic: time - money management

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LarryMueller
Technician & Clinician

Joined: January.20.05
Location: USA
Online Status: Offline
Posts: 24

Posted: March.08.06 at 6:15am \| IP Logged

Thought I'd throw out my general thinking on charges per hour,
and get your reactions. A certain college business prof states
that 40% of a business owner's time is spent in "non-billable"
time. I just work out of my home, so it's probably much less
complicated. I figure one third of my time is spent talking to
customers, cleaning up, running to the bank or hardware store,
making a tool, taking inventory and ordering, etc.

Also, about one third of my money goes right back into the
business for supplies, new tools, and the cost of having a place
with utilities. That's about what it's cost me for many years,
although recently it seems to be less. I finally have pretty much
what I need after 30 years at it.

So, I try to get $45.00 an hour (I goof myself on estimates
sometimes). I figure a third for "lost time" and a third for
expenses. This comes to $30 per hour-and-a-half (after
expenses), or $20.00 per hour. I sometimes fudge on this for
favorite customers or poorer college students. Maybe too much
so, because in theory, I should be clearing 50k, but always
seem to fall short.

I get to do what I like in life, on my own schedule, and it makes
a great 2nd income. I'd have to work much harder, or change
my way of charging if I had a family to support.

Larry Mueller

admin
Admin Group

Joined: March.10.05
Location: USA
Online Status: Offline
Posts: 304

Posted: March.08.06 at 10:39am \| IP Logged

Hey Larry,

Funny you should bring this up now. I charge $55/hour for BIR and $45 for web development and will be re-evaluating my "per job" prices and my hourly rate over the next few months. Along with this I'll be tracking and evaluating my time. I'm definitely in agreement with you that a large chunk of hours are spent on tasks not directly related to what brings in the income....repairing customer's horns (or in my case, also building websites).
For instance, once a year I either reformat my C drive on my computer or upgrade the system and then reinstall everything. This is usually a 2 to 3 day process. Not directly billable.

Another example...I spent several days a couple weeks ago upgrading the brass bench area of the shop. Removed the old bench and put cabinets in. It's great but it did take time to get the cabinets, assemble them, install them, put a clear coat on them, etc. Not billable.

And then there was the 3 weeks I spent moving the shop into the downtown location a few years ago. Not billable.

However, if I were an employee of a company, I would certainly expect to get paid for this work. On the other hand, there's the investment aspect. If that company were to sell out in 10 years, I wouldn't see a dime. But if I decide to some day sell my business, I get the profit.

So I guess it just depends on your perspective and priorities. I know that many of my web dev colleagues are charging $75 to $100 per hour and making no apology for it. I also know that if I want to buy land or a house, I'm going to have to increase my prices.

But given the choice between running my own business and working for someone else, I'll take the freedom that comes with running my own business...and I'm not talking about the freedom to work when I want to. I'm talking about the freedom to take the business in the direction I want and the freedom to learn what I want during the process. For example, if I want to learn PHP programming, I just study it and then start using it in the websites I create. If I want to learn tone hole replacement on a clarinet or oboe, I have the freedom to make the decision to do it based on my interest and not on what's most economical for my boss. Ya know?

I suppose if I had a family to support, things may be different.

My 2 cents.
Michelle

LarryMueller
Technician & Clinician

Joined: January.20.05
Location: USA
Online Status: Offline
Posts: 24

Posted: March.08.06 at 12:17pm \| IP Logged

Mickey,

You mentioned "freedom" of running your own business. That's
the main reason I do this. And it's not just the hours, but the
direction, for me as well. I was sooo busy at the stores where I
used to work, that I could never learn anything new, or put to
practice any techniques I'd learned. There is no way I could
participate in these forum discussions. My last store job taught
me the "harder" elements of repair; dent work, soldering, and
other things I was weak at. I learned a bunch in 2 -3 years. I
stayed a total of 10 years, and was miserable. I was making
decent money, but had no control, was learning close to
nothing, and had little right to choose the work I wanted to do.

I too could benefit from a time management study now. Am I
really working as much as I think? Could I work more
efficiently?

I also need to think more about my pricing. San Antonio is not
as wealthy a city as others it's size. And the cost of living is
quite reasonable, but still, I should probably go up a bit.

Larry

motomom
Newbie
Newbie

Joined: April.08.07
Location: United States
Online Status: Offline
Posts: 28

Posted: April.09.07 at 5:55pm \| IP Logged

Larry, my husband and I also own our own business, complete with storefront and rental instruments. But both of us are primarily repair techs. We shoot for $60 an hour, but considering we cut a few customers some slack, we usually don't average that. I did a pretty thorough investigation of what the average skilled contractor charged per hour throughout the country, and the average was $65 per hour for folks like plumbers and electricians. At the time I did the study, we were falling way short of this goal, about $45 per hour. So we have upped our rates, and we have not seen any slack-off in repair work - as a matter of fact, we are still just slammed, as we have been ever since Brook Mays closed the majority of their shops.

Sometimes it is hard to know what to charge. We fight over it often, I'm for raising rates and hubby is for keeping them the same. I'm winning, right now, since we are so covered up with work.

We really got into it over my Straubinger work - he thinks it is too expensive. But, I'm the one who got the certification (which was a very good course!) so I get to choose!

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