The Real cost of Doing Business
I charge £2700 to come to you in London for a day and run a training course.
Is that an excessive hourly rate?
For an 8 hour day it’s £340/hour: “blimey!”
But apart from the supply and demand argument (not many people are prepared to risk being self employed, do all the travel, and do the selling and the doing, with no paid holidays, no paid sickness if it happens, no pension – when they could get a well paid job working in an office or whatever)
…..and also the value-to-you argument: that day or training might save you £1million a year in better negotiating or better-run projects, and if the fifteen people on the course each get 1% more effective then the £180 each you’ve spent on them has been worth it,
…. But apart from these, let’s look at the REAL hourly rate. And this is important to you as well, because you’ll have the same sort of thing going on in your own business. Lots of costs that get forgotten when you price up your time, either as a manager or as a service provider.
So it looks like £2700 for 8 hours. “£340 per hour!”
*
But the 8 hours is really…
Including travel average 2 hours each way = 12 hours
(not counting staying the night before – shall we call that 4 useful hours I could have had at home with my family?) so we are at 16 hours cost so far
Including prep time = 19 hours total so far
Including invoicing afterwards, and booking hotels = 20 hours
Plus selling originally, and then client maintenance (search on a clients name and see how many emails have been sent back and forth since the start of the job!) and arranging details of room, numbers, changes etc = 25 hours
(YOUR work will have a similar list of extras that you don’t always think about)
*
Then there’s the money coming in:
After tax the £2700 is more like £1850
After petrol/transport it’s £1700
After hotel it’s £1550
After printer ink, folders, books and cost of office it’s £1450
Then after website, marketing etc, say £5000/yr spread over 100 taught days = £50): £1400
Then there’s the cost of holidays and sickness which self employed people don’t get – very conservative estimate of £100 for this one day (10k/yr if you sell 100 days/yr) and we are at £1300
Employed people also often get a pension which self employed don’t get, worth maybe 10k/yr so we are at £1200
*
So really I’m getting £1200 for 25 hours which is £48 per hour.
Don’t get me wrong, I’m happy to earn £48 per hour for a job I love doing, but just don’t accuse me of getting paid £340!
PS – Are you considering getting into training? Would being a freelance trainer suit you? Get more information here: www.becometrainers.com
