How valuable is your time? Calculating your hourly rate

How valuable are you? Well of course, you’re unique, and therefore priceless, that goes without saying. Whether you believe this or not is another matter, but that’s not what this article is about. Instead this article is about what your hourly rate really is – and it’s not the one you charge to clients!

To find out how valuable you are, get your calculator and work out the following:

1. Think about how much money you want to make over the next year.
2. Calculate how many weeks you want to work to earn that money.
3. Calculate how many hours in a week you want to work
4. Multiply the no. of weeks by the no. hrs per week you’ll be working
5. Divide the total no. of hrs you’ll be working in the year into the amount you want to earn

For example, if you want to earn £100,000 this year, and you want to work 44 weeks, and work just 30 hours per week, then multiply 44 by 30 = 1320 hrs; and divide £100,000 by 1320, which equals £75 per hour.

The figure you’ve calculated for yourself may please you, astound you, or horrify you. For now, just notice how you feel, without any more judgement if you can! This figure is the one you need to know about, because it is the amount you need to be generating every hour of your working week in order to reach the amount of money you want to make this year.

So now just think about what you’ve done today, or look over the last week and see how you have spent your 30 hours or whatever it was. Were the things you spent your time on worth £75? If you were filing, or ordering stationery, or doing your books, or general administration around an event, would you pay someone else £75 an hour to do these? Probably not – and yet that is what has been happening if you have been doing them. And yet, you could be paying someone a lot less to do these things, freeing up your time to do things that only you can do. Like treating your clients, like planning your marketing efforts, like taking the time to do some inner work on limiting thoughts and beliefs.

You may have found that your hourly rate is not as high as you want it to be, in which case you will need to play around with those numbers in your calculation until you come up with something that is more satisfying. If that means raising your prices, something that many people find hard to do, then at least you know that and can work towards it.

Since I have discovered my value in this way, I’ve found it amazingly easy to take on someone else to do some of the administrative tasks in my business! It became really obvious that my time was more profitably spent doing things that only I could do, but that I also loved, and that also were likely to generate more than my hourly rate I’d calculated.

To start with of course, you will often find yourself doing things that are turning out very expensive; but that’s OK. This is about making a conscious, informed choice about how you want to spend your time. So when you are next manually amending your database, just pause a minute and ask whether this really is something you want to do with your time, or could you find someone else to do it. Or could you even automate the whole thing, using www.mailchimp.com (free for up to 500 people).

So be kind to yourself — this is not an opportunity to feel bad; rather it’s a chance to shed some light on how you are working, and choose to change it for the better.