- Fri Dec 08, 2006 10:37 am
#199514
Here's my soliquoy on billing and it's aimed at users under 5 years of experience. 
Let's call this, ... Bill by the hour.
Add your total living costs.
rent/mortage
insurance?
car
gas
food
entertainment
equipment/software(divide this by 12) and use that figure
utilities
dog food/cat food
you freaking name it, ... if you have to buy it, ..it should be on this list.
You shouldn't be asking 'why?', but if you are, ..it's because YOU NEED TO HAVE MONEY FOR IT OR IT GOES AWAY FROM YOUR LIFE.
Now, ..take that total and divide it by how many hours a week you will consistantly spend at work. 10? 20? 60+? what is it?
Whatever it is, .. commit to it and treat it like the job that it is.
Okay, ..for illustration purposes, ..let's create an example 'portfolio' of a guy we'll call Sam Sphere.
(all arbritrary figures, ..insert your own)
rent/mortgage: $750.00
insurances: $200.00
car: $400.00
gas: $80.00
food: $200.00
equipment: new mac pro. purchased w/credit purc. $4200.00/12 = $350.00
utilities: 350.00
dog/cat: 40.00
___________________________________
total: $2370.00 !!!
okay, ... Sam Sphere needs to make $2370.00 just to keep things par.
Let's say this person is very average and does a perfect 40hours of work a week.
4 work weeks in a month [ 40h x 4weeks] = 160hours.
If our person only made $2370.00 a month he'd be making $14.81/hour and unable to go to the movies. A very unhappy girlfriend/wife is in the making for Sam, ... count on it.
Let's call the figure above Sam's Monthly Hourly Need or MHN, ..in this case: $14.81/hr
We don't want to be like Sam .... so, .. we ask, ..'what would I like to make?" "what will this market bear based on my level of skill" ..or " how much do I need to make an hour to save x amount and still buy a few things from time to time?" Basically, .. this is a personal decision, ..but one that's also based in reality. Very frankly, ..if your not that good at what you do, ..or there's a million others offering the same service, ... you simply can't expect to much. In that case, ...the market will determine what your price is going to be.
Let's assume you don't suck and your customers only have a few to choose from in the field of arch.vis. Let's also throw in the fact that your pretty good at what you do, ..so your the 'go to guy or gal.' That's good. Considering those facts, ...I'd say a good rule of thumb is to determine your desired hourly at 2.5x your MHN. Again, ...you make this decision, but be real about it.
With that said, ... Sam's client hourly rate becomes [ $14.81 x 2.5 ] = $37.03/hour.
Let's call this figure the Client Hourly Rate or CHR.
So, ..armed with your own personal CHR, ... you can be sure that for every hour you spend doing anything remotely related to your work, ... your being compensated. If you work more than 40hours/week ...they're ACCOUNTED for, ....note the word accounted has the word account in it. You don't work for free. Many unintentionally do when performing work on a project that went 'way over' the amount of time they thought it would. This is fine if you learn from it, ...but if you don't have to, ..then why not just circumvent the whole damn thing with proper/professional billing? Don't let it happen to you.
Bill by the hour.
*special note: If a customer doesn't trust your 'hourly accounting' , ...then take a walk on the job. If you can't get that level of basic professional trust, ... then I'd say you have nothing. Just explain that your a very consistant person and that from week to week your hours vary little, so they should never expect some insane invoice ! Make note to explain the exception of some occasional 'overtime' hours that become necessary with pertinent deadlines and desired extras.
Everyone understands that.
Also, ..... I'm not saying that 'bidding' for jobs by a single price isn't ever to be done, ... but this practice is really reserved for a very seasoned individual who has an accompanying reputation within a given industry. A known entity, ..if you will.
Is that you? Could be and should be, .. it just takes time.
I'm not going to elaborate on how typical it is for someone who bills by the 'job' with no real calculations behind his billing, .. but I'll assure you, ..it's no pretty picture. Can that person say that he's definitively making x dollars/euros an hour? He can't, .. because that figure is forever fluctuating, ..and usually decreasing with every passing hour he's not done with the work.
Bill by the hour.
..best of luck to you.
Let's call this, ... Bill by the hour.
Add your total living costs.
rent/mortage
insurance?
car
gas
food
entertainment
equipment/software(divide this by 12) and use that figure
utilities
dog food/cat food
you freaking name it, ... if you have to buy it, ..it should be on this list.
You shouldn't be asking 'why?', but if you are, ..it's because YOU NEED TO HAVE MONEY FOR IT OR IT GOES AWAY FROM YOUR LIFE.
Now, ..take that total and divide it by how many hours a week you will consistantly spend at work. 10? 20? 60+? what is it?
Whatever it is, .. commit to it and treat it like the job that it is.
Okay, ..for illustration purposes, ..let's create an example 'portfolio' of a guy we'll call Sam Sphere.
(all arbritrary figures, ..insert your own)
rent/mortgage: $750.00
insurances: $200.00
car: $400.00
gas: $80.00
food: $200.00
equipment: new mac pro. purchased w/credit purc. $4200.00/12 = $350.00
utilities: 350.00
dog/cat: 40.00
___________________________________
total: $2370.00 !!!
okay, ... Sam Sphere needs to make $2370.00 just to keep things par.
Let's say this person is very average and does a perfect 40hours of work a week.
4 work weeks in a month [ 40h x 4weeks] = 160hours.
If our person only made $2370.00 a month he'd be making $14.81/hour and unable to go to the movies. A very unhappy girlfriend/wife is in the making for Sam, ... count on it.
Let's call the figure above Sam's Monthly Hourly Need or MHN, ..in this case: $14.81/hr
We don't want to be like Sam .... so, .. we ask, ..'what would I like to make?" "what will this market bear based on my level of skill" ..or " how much do I need to make an hour to save x amount and still buy a few things from time to time?" Basically, .. this is a personal decision, ..but one that's also based in reality. Very frankly, ..if your not that good at what you do, ..or there's a million others offering the same service, ... you simply can't expect to much. In that case, ...the market will determine what your price is going to be.
Let's assume you don't suck and your customers only have a few to choose from in the field of arch.vis. Let's also throw in the fact that your pretty good at what you do, ..so your the 'go to guy or gal.' That's good. Considering those facts, ...I'd say a good rule of thumb is to determine your desired hourly at 2.5x your MHN. Again, ...you make this decision, but be real about it.
With that said, ... Sam's client hourly rate becomes [ $14.81 x 2.5 ] = $37.03/hour.
Let's call this figure the Client Hourly Rate or CHR.
So, ..armed with your own personal CHR, ... you can be sure that for every hour you spend doing anything remotely related to your work, ... your being compensated.
If you work more than 40hours/week ...they're ACCOUNTED for, ....note the word accounted has the word account in it. You don't work for free. Many unintentionally do when performing work on a project that went 'way over' the amount of time they thought it would. This is fine if you learn from it, ...but if you don't have to, ..then why not just circumvent the whole damn thing with proper/professional billing? Don't let it happen to you.Bill by the hour.
*special note: If a customer doesn't trust your 'hourly accounting' , ...then take a walk on the job. If you can't get that level of basic professional trust, ... then I'd say you have nothing. Just explain that your a very consistant person and that from week to week your hours vary little, so they should never expect some insane invoice ! Make note to explain the exception of some occasional 'overtime' hours that become necessary with pertinent deadlines and desired extras.
Everyone understands that.
Also, ..... I'm not saying that 'bidding' for jobs by a single price isn't ever to be done, ... but this practice is really reserved for a very seasoned individual who has an accompanying reputation within a given industry. A known entity, ..if you will.
Is that you? Could be and should be, .. it just takes time.
I'm not going to elaborate on how typical it is for someone who bills by the 'job' with no real calculations behind his billing, .. but I'll assure you, ..it's no pretty picture. Can that person say that he's definitively making x dollars/euros an hour? He can't, .. because that figure is forever fluctuating, ..and usually decreasing with every passing hour he's not done with the work.
Bill by the hour.
..best of luck to you.
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