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Is your hourly rate a measure of your prosperity? And what options do you have?

Are you charging $150 / hour and feeling happy but then when you look at your lifestyle, you get a sense that you are not really cashed up?

I’ll show you why. Try this exercise.

Take your TOTAL GROSS EARNING (revenue earned in the year without deducting any expenses).

Divide that by 1,800 which equates to the approximate number of working hours in a year.

Some will immediately jump in and say – you have got to leave a certain amount of time aside for admin / training / tax time, etc so there aren’t 1,800 working hours in a year. Fair enough, but my assumption is that anyone running a business isn’t doing a standard 7.5 hours in a day, so the admin / training / tax time is done outside of this, I’m assuming.

When you divide TOTAL earnings by 1,800 hours to get your “Actual Hourly Rate“ how far is this from your “Desired Hourly Rate?

Let look at some numbers (and I encourage you to use your own numbers to substantiate this)

A

B

C

D (B x C)

Description

Desired Hourly Rate

Hours in a year

Annualised rate

 

Revenue Calculation

$150

1,800

$270,000

 

 

A

B

C

D (B / C)

Description

What you ACTUALLY earn as gross revenue within the year

Hours in a year

Actual Hourly rate

 

Revenue Calculation

$150,000

1,800

$83

 

So why is the Actual Hourly Rate almost half (55% to be exact) of the Desired Hourly Rate?

One reason is that while there are times in the year when you are able to charge out at $150 / hr there are other times when that $150/hr job finishes and you’ve got a mortgage to support, family expenses to account for, so when a labour hire company calls you up and says they have work for $38 to $42 per hour – sometimes you’re forced to take than up.

Adding a higher number for some parts of the year ($150/hr) and adding up a smaller number for other parts of the year ($40/hr) you can see how the average rate starts to gravitate much lower – leaving you with not enough cash at the end of the year. Your numbers will be different - but you get the picture, don't you?

There have been no real options to counter this, until now for REC’s who run small businesses because when you are working “in” your business (earning $150/hr) you are not working “on” your business (marketing for your next job to consistently get a higher hourly rate).

electricianXchange offers a solution to RECs by allowing you as the Subbie to create your work profile once and for all with an availability / unavailability toggle button within your profile, indicating to the market you are available for work or unavailable for work.

It creates a fishing pond in which the fish (those seeking work) and the fisher men / women come together, allowing easy movement of talent directly between employer & job seeker eliminating the margin taken away by intermediaries.

Check it out at www.electricianXchange.com.

If you have any questions, there is a Frequently Asked Questions (FAQ) page on electricianXchange which you should review. And if you have any further questions or want to find ways to increase your bottom line, leveraging electricianXchange, please call 1300 353 364 or email us at info@electricianXchange.com.

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