Where your hours actually go

Everybody knows their rate. Almost nobody knows what share of their week that rate applies to, which is why the annual arithmetic never comes out where people expect.

The unbillable half

In a one-person business the following are real work and nobody pays for them directly: finding the next job, writing the proposal, the call that does not convert, invoicing, chasing the invoice, bookkeeping, the support you did not charge for, and keeping up with the field well enough to be worth hiring.

A steady 60% billable is good. Many solo businesses run at 40%, and the ones growing fastest often run lower, because selling scales before delivery does. That fraction, not your rate, is what multiplies out to your year.

Track a real fortnight

Two weeks, every working hour in one of three buckets: billable (a client is paying for this hour), selling (finding or winning work), running (everything else the business needs).

Do not tidy it up. The uncomfortable version is the useful one, and the point is to see the shape rather than to feel good about it.

Your billable fraction

Billable hours as a percentage of total working hours across the fortnight.

The ceiling it implies

Your rate, times your billable fraction, times the hours you are actually willing to work in a year. This is the honest top of a pure services business at your current shape — before tax, and assuming you never take an unpaid week.

Two ways to raise the ceiling

Your billable fraction is 45%. Which change raises the ceiling more: a 20% rate rise, or getting billable to 60%?