How to Know the Detailed Costs of Your Business

Business Cost

Exploring your business, we find that the hourly rate is far below what it should be. On many occasions, I have discovered companies that charge an hourly rate far below the business’s actual hourly cost, and their self-employment costs.

Calculate Your Staff’s Working Hour

Income

Many entrepreneurs calculate their hourly rate by adding up their technicians’ hourly rate, such as car costs, cell phone costs, and various other items. A recent example is a customer who calculated his hourly rate at $45 plus $20 profit, or $65 per hour. At the time I calculated his actual cost per hour, it was $75.59 per hour. Now, how do you calculate your real hourly cost? The first thing you want to understand is that you need to determine exactly how many hours of income generation you want to earn each year.

Master All Technical Issues

Business Man

To try to do this, you must first understand that your neighborhood or store employees will only generate your earnings. Administration, management, technical specialists, etc., are not sources of income. It would be best if you found out how many hours your specialist employees work each year, the number of hours is lost throughout the year due to training, vacations, illnesses, etc. (that you pay them), which you then use to calculate 85 percent of the time they do the work. At this point, we now have the actual hours of income generation. Once you have calculated the actual hourly cost of running your business, you can adjust your profit margin to the hourly rate.

Calculate Your Hourly Income

Cost

From this calculation, we deduce that, although 1950 hours per calendar year are paid for each technician, only 1281.4 of these hours are available for profit. This is 67.7% of everything you spend. Now that we have the number of hours open to make a profit, we must divide it by the company’s general costs, excluding the goods’ value. Calculate your hourly fee. If the company’s total expense is 294,427.00, we will divide it according to the number of hours. 294,427 / 3844.2 hours 76.59 hourly cost for the management of the activity. Finally, you know that the real value of running your business is $76.59 per hour.

Calculate your hourly rate. The hourly rate is the hourly cost multiplied by the percentage of expected profit. What you charge per hour depends on you. The key is knowing how much profitable hour costs to run your business. I have passed a 20-day training course. This is because the perfect staff is made up of trained employees, and you need to make sure that your employees are continually learning. I have found that 20 times a year is the ideal balance between training and productivity, ensuring a very productive team.

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