What's your hourly rate?
How much is each minute worth to you?
Are you completing tasks that should be delegated?
Are you doing tasks that could be automated...or even deleted?
Calculating Your Hourly Rate
In order to grow a building company, you need to be able to stop doing tasks. If you don't, you'll find yourself attempting to manage a never ending 'To Do List' that stops you from breaking through the 'glass ceiling'...That invisible barrier to growth that a lot of builders find impossible to penetrate.
But the challenge for any builder is always, ‘What should I stop doing and when should I stop doing it?’
Over the next three blog posts I'll be sharing some tips with you that may help you with this challenge.
Specifically, I'll be covering:
- How To Value Your Time (By Calculating Your Hourly Rate).
- The Process To Use When Deciding What You Should Stop Doing.
- How To Systemise Your Business So It Runs Without You.
So let us start with your hourly rate.
Or if we look at it another way ...
How Much Is Each Minute Costing You?
Start by writing down your earnings for the year from your business.
Next, add any retained profit that that is left over at the end of the year.
Divide that number by 2,000 and you have your hourly rate .... Well, you have last year's hourly rate!
But what you really need to know is your hourly rate now, therefore we need to look forwards not backwards.
So, How Much Do You Plan To Earn This Year?
And how much are you planning to leave in the company in retained profits?
If you are drawing $120k and the company is making $100k net, your hourly rate would be $110 per hour ($120k + $100k / 2,000 = $110 per hour).
If you don't have a calculator try this, knock the last 3 zero's off your total ($220,000 becomes $220) and then divide the number by 2 ($220 becomes $110).
I find this method easier even if I have a calculator!
Now you have your hourly rate, write it on a piece of A4 and pin it up on your office wall. Let it act as a reminder for you every day that you need to stop doing 'stuff'.
I'd even go as far as working out your cost per minute - $110 an hour is around $2 a minute. So when you spend 15 minutes picking up rubbish on site, just remember, that cost you $30!
What To Do Next
Armed with your hourly rate you can now move to the next step in the process, decide what to stop doing.
I'll be covering that process in the next blog post. In the meantime, calculate your number using the calculator below and leave me a comment, did this post help you? Or was it a waste or your time (& money! :-) )
I certainly hope it was a good investment for you!
If you would like to join the Association Of Professional Builders as a member, or get some expert mentoring to help with the bottlenecks in your building company, or maybe even apply to become a certified member, click on the Watch Now button below to learn more about what's inside APB Membership.