82. How to Calculate a Burn Rate
How can you know how much to charge if you don’t know how much you cost? I spent a lot of years pulling prices out of thin air. I had no idea what I should be charging, and to be honest, I was willing to work for whatever someone would pay. As my company began to grow, I quickly learned the importance of understanding costs. Knowing your costs can help you massage your pricing and land new clients. It can also help you know how much time to allocate to each project.
I certainly don’t claim to be an accountant, and my accountant may read this and think I’m off my rocker. But here’s a simple formula to use to calculate your hourly burn rate (that is, what your graphic design business costs you per hour):
Annual ...
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