Income update: May – August 2011

I’ve been slacking on posting my income reports lately, but am getting back into the swing of things.

Anywho, below is the breakdown of the past few months:

Income recap 2011-05 through 2011-08
Billed recap 2011-05 through 2011-08
Billed hours recap 2011-05 through 2011-08
Average hourly rate recap 2011-05 through 2011-08
Clients billed recap 2011-05 through 2011-08

From the numbers, you can see that my average hourly rate went up in July; this was followed by an increase in the amount I billed in August. Since I bill at the beginning of the month for the prior month’s work, those increases are essentially the same thing, and were due to a couple days of on-site training/consulting.

I actually didn’t do the on-site work, but outsourced it to an associate whom I’ve worked with for many years and trust, and whose expertise compliments my own. In addition, my rate for on-site days is a bit higher ($1,500/day + travel expenses) compared to my standard hourly rate ($150/hour). Since I bill out my associate at a higher rate than I pay her, I pocket the difference, so I get a bit more revenue than what I personally worked. These types of arrangements are nice, since it can be relatively passive income.  However, you just want to make sure that you trust your associates if they have any contact with your clients, since you don’t want them to steal your clients.

You might have also noticed that my average hourly rate is under $150/hour.  That’s due to a project which I agreed to cap the project cost for a client (which isn’t something I’m in the habit of doing), and, of course, which has exceeded the hours I estimated.  As a result, I’m writing off the additional hours, although I’m still tracking them.  As a result, my average hourly rate suffers…

Aside from that on-site boost, the rest of the months are pretty average, and it feels good that I’m able to keep a fairly consistent income despite the dire stories in the media about the shaky economy.

Let me know if you want any additional info included in these income reports.

 

 

  • http://www.consultingbench.com Iain

    I think it would be helpful if you showed readers what a project (or client) margin report would look like. It is easy to look at the big picture numbers and forget the differences between projects. This information can really help focus on selling/selecting the right kind of work moving forward.

    • http://www.StartMyConsultingBusiness.com Greg Miliates

      Thanks for your comment!

      A margin report is a great tool to evaluate projects and/or clients to identify the most profitable ones. However, for the type of work that I do, I don’t incur any client- or project-specific costs (other than travel costs, which I bill directly to the client), and so don’t need to use a margin report. My business costs are mostly general (e.g., phone service, GoToMeeting, etc.).

      That said, I completely agree that it’s vital to identify your most profitable clients and projects.

      For clients, I know which are my “easiest” clients and who pays quickest, and have developed some ways of identifying difficult clients very early in the prospecting/scoping stage. For those difficult clients, I either increase the padding on my project estimates and/or don’t follow up with them past the initial phone consultation. This lowers the likelihood I’ll be stuck doing non-billable work for high-maintenance clients.

      For projects, I’m mindful of things that I get multiple requests for. That way, I can create a more generic version of the solution, and essentially resell it to multiple clients. I also save code snippets for common tasks. Doing these allows me to leverage my time and essentially increase my revenue.

Powered by WishList Member - Membership Software

If you enjoyed this article, get email updates (AND snag your free ebook).