We’ll keep a revolving post for the common CEO FAQs. Feel free to post a question and we’ll get the answer back to you ASAP!
What’s a challenge business owners offering professional services struggle with?
The biggest challenge for business owners offering professional services is putting the right value to “your time”. Therefore, setting an hourly fee that covers the actual time, effort, and expenses you incur is vital. What does it take to deliver the service you are providing?
How to determine your hourly rate
To dive a little deeper on actual expenses lets use a coaching business as an example. I like to start with office space or square footage of the home office if it’s a home based business. Set recurring expenses…. We are trying to answer the question: How much are you paying to conduct your business?
Brick & Mortar
For office space: rent, internet, phone, and other utilities. Add those figures together and determine your monthly total. Then divide that monthly total by the number of hours you coach monthly. This figure should be your “at least” to break even hourly charge.
For home-based businesses, it’s the same logic you just have to do a little more calculating. I borrow from tax time Schedule C formulas to get a real number of actual expenses. Here, you have to determine the square footage of your office vs your entire house. Divide your office square footage by the total house square footage. Whatever the number, say 20%, is 20% business expenses of your household expenses. 20% of the mortgage, 20% of the internet, 20% of the utilities, etc. Add up the business expenses for your monthly total and then divide by the hours you coach each month. This should be your break even hourly rate.
What are the top 10 small business pain points?
Top 10 Small Business Pain Points
- We don’t have enough money.
- We are not able to get new customers.
- We have been denied for small business financing.
- We are not able to keep existing customers.
- Our revenues are too low.
- Revenues are OK, but profitability is LOW.
- We are behind on business tax returns.
- We need to move to bigger space.
- Our prices are too low.
- We qualify for several small business certifications but struggling to present the required documentation to apply.