Robin Waite explains why hourly rates trap small business owners in low income. Most owners only bill two days a week when you account for admin, sales, and personal time, yet 70% earn less than the UK average salary of £30,000.
If you're a business owner, you need to stop and listen to this. You may think that you're going to make 6 figures this year, but if you're still charging an hourly rate, this is why that's not going to happen. Most business owners think that by working the 2,000 hours available to them each year and charging that out at £50 an hour, they'll make £100,000 in that year. They forget to take into consideration the school runs, going to— for coffee with their friends, going to the gym, maybe doing some sales and marketing, looking at their finance, and doing some admin along the way. Oh, and don't forget, there's also holidays as well. So in reality, what I've found is that business owners are spending 2 days a week working paid client work versus the 5 that are actually available to them. And that's why 70% of small business owners are earning less than the average salary in the UK of just £30,000 a year.
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