Price Yourself To Survive

One of the biggest mistakes new entrepreneurs make? Charging only for the time spent with clients.

If your pricing doesn’t cover the real cost of running your business, you’ll burn out and still be broke.

Employee vs. Entrepreneur: Different Game, Different Math

As an employee, your salary covers everything: meetings, admin, breaks, even the time you waste scrolling. Your boss builds in overhead, vacation, and benefits when setting your pay.

But now you're the boss. And if you only charge for the hours spent delivering your service, you're missing the bigger picture.

Billable vs. Non-Billable Hours

Billable hours: The time a client pays you for.

Non-billable hours: The rest—emails, marketing, admin, networking, bookkeeping, professional development.

Your pricing needs to cover all of it.

How to Price Like a Business Owner

1. Set Your Income Goal
How much do you want to take home? Let’s say $5,000/month. That’s $60,000/year after tax.

2. Add Taxes
You can’t ignore taxes—they’ll catch up with you fast.

For example, if you live in Ontario, you’d need to make about $83,300 before tax to take home $60,000 (based on an average tax rate of 27.97%).

Use an online tax calculator and reverse-engineer your pre-tax income. Don’t overthink it—just get close.

3. Add Business Expenses
Tally up your annual business costs—phone, gas, internet, software, insurance, etc. Don’t forget to include a buffer for those unexpected expenses.

Let’s say they total $35,000. Add that to your $83,300 income goal. Your business now needs to earn $118,300/year.

4. Subtract Time Off
You probably won’t (and shouldn’t) work 52 weeks a year.

Let’s say you want six weeks off. That leaves 46 working weeks.

$118,300 ÷ 46 = $2,572/week in sales to hit your goal.

5. Set Your Rates
Let’s say you spend 20 hours per week on billable client work.

$2,572 ÷ 20 = $128.60/hour

That’s your minimum rate. Not what you want to charge—what you have to charge.

If you’re charging less, you’re working hard for too little. Time to adjust.

Need help with your numbers?
Download the free 2-Page Business Plan & Pricing Worksheet and take the guesswork out of your rates.

If you want personalized support, reach out. I’m happy to help.

PS: I’m not an accountant and the above is generic advice that works for pretty much anywhere in North America BUT, as a business owner, you should check with your accountant or tax lawyer to make sure all your financial planning including taxes meet all your jurisdiction’s guidelines.