But, have you considered these other important factors when determining your hourly rate?
- Insurances (health, disability, dental, eye, accident, etc.)
- Professional fees and certifications
- Vacation, Holiday, Sick time
- Employee / Employer Taxes
- Retirement Savings
- The time it will take to get the job done right
You may have thought that charging $50 an hour for your services was good money, until you factored in all of these expenses. Now, you’re left wondering if it’s nearly enough to keep your pressure washing business afloat.
Begin assessing your expenses by listing your monthly costs (all of your costs), and dividing each amount into the number of hours you will be able to actually charge customers. Remember, just because you work 40 hours every week, doesn’t mean that you can bill customers for 40 hours – you may only be billing clients for 30.
For instance, your expense list may include:
- One vehicle loan of $400 (this equals $3.33 per hour using a 30 hour billing week)
- Car insurance for $125 ($1.04 per hour)
- Cleaning supplies for $400 ($3.33 per hour)
- Phone and internet services equaling $150.00 per month ($1.25 an hour)
- Gasoline costs of $500 ($4.17 per hour)
- Advertising and marketing fees of $600 ($5.00 per hour)
- Maintenance and equipment repair ($10 per hour is a good estimate)
- Office space for $900 ($9 per hour)
Using these figures, you would need to charge at least $37.12 per hour just to break even. You still haven’t managed to pay yourself, or put anything back into your pressure washing business.
The next step to figuring out your hourly wage is to determine how much you need to be paid as a salary, and divide that amount by 40 hours per week. So, if you want to make $60,000 a year, you’ll need to tack on another $29 per hour to your hourly cost.
Now, that means that you need to charge your pressure washing business customers $66.12 per hour, right? Wrong! You still haven’t added anything for expansion, emergencies, or even Uncle Sam’s cut. Plus, it’s important to remember that you’re working 40 hours a week, but only charging your customers for 30 hours a week, so you need to boost that $66 an hour to about $105-$115 to cover all of your costs, and make enough to live on.
Charging your pressure washing business customers more than $100 an hour might seem like a lot at first, but once you realize the true cost of business, you’ll soon realize that it’s a real bargain – for both you and your customers!
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