Price Your Own Hour Like a Plumber Prices His

Call a plumber and you will get a number before he gets in the van. Ninety dollars for the visit, a rate after that, and parts on top. He is not being difficult. He worked it out once: what the van costs, what insurance costs, how many hours he can actually bill in a week after driving and quoting and the two jobs a month that fall through. The number on the phone is the answer to arithmetic he already did.

Now ask the owner of a small business what an hour of their own time is worth and watch what happens. Most people pause, then guess, then say it depends. That is not modesty. It means every decision they make all day, about what to do themselves and what to hand off, is being made without a price attached.

The math is not hard and it does not need an accountant. Take what the business cleared last year, say $90,000. Count the hours you actually worked, honestly, including the evenings: fifty hours a week across forty eight weeks is 2,400. Divide and you get $37.50. If your own hour is worth $37.50, every hour you spend on something you could hire out for $20 is an hour you paid $17.50 for the privilege of doing yourself.

Run it the other way and it gets sharper. A job you quote at $450 that takes you six hours is $75 an hour, double your average. A job you quote at $200 that takes five hours and two phone calls is $40, and after the drive it is less than the person you would pay to do it. You have been doing both all year. Only one of them is a business.

The hour you keep doing yourself

Every owner has a task they will not let go of, and it is almost never the expensive one. It is the bookkeeping, the scheduling, the invoices, the endless chasing of a customer for a signature. Three reasons keep it there, and all three sound sensible from inside.

Handing it off costs money today and saves time later, and time later does not feel like money. Twenty dollars an hour is a real number leaving a real bank account. The hour it buys back is abstract until you have priced it.

Nobody else does it exactly your way. This is usually true and usually not worth what it costs. The question is not whether they do it as well as you. The question is whether the gap between their version and yours is worth $37.50 an hour of your time.

And the small task is a hiding place. Invoicing is calm and finite and you know how to finish it. Calling the four customers who might buy the bigger job is uncomfortable and might go nowhere. The calendar fills up with the comfortable one, and it looks like work, because it is work. It is just the cheapest work in the building.

Work out the number this week

Sit down for twenty minutes and come out with a figure you can say out loud.

1. Take last year's profit, the money that reached you, not revenue.
2. Divide by the hours you really worked. Count the evenings and the Sunday quoting. A number that flatters you is useless.
3. Write the result somewhere you see it, on the wall or on the first line of your quoting sheet.
4. For the next week, before you start any task, name what it would cost to have somebody else do it. Just name it. Change nothing yet.
5. At the end of the week, hand off the one task with the biggest gap between the two numbers.

One task. Not a restructure. The point of the week of naming is that you will be wrong about which one it is, and the list will tell you rather than your gut.

One more thing the plumber does that most owners never do. He reviews the number. Insurance goes up, the van needs tires, a competitor two towns over starts charging more, and the rate moves to match. An owner who works out their hourly figure once and then never touches it is quoting this year's jobs with last year's arithmetic. Put it in the diary for January. The rate you can defend is the one you recalculated recently, and a rate that has not moved in three years is usually a rate that is too low.

There is a limit to this and it is worth saying plainly. Your rate is an average, not a law. Some hours genuinely cannot be bought back at any price, because the customer wants you, or because the thing only works if you do it. And when the business is slow, an hour of your time has no other buyer, so doing the twenty dollar job yourself is free and hiring it out is not. The number is a tool for choosing between things, not a rule that fires you from your own company.

What it does do is end the argument you keep having with yourself at nine in the evening. With a rate on the wall, the choice between invoicing for two hours and making four sales calls stops being a matter of mood. It is $75 of your time against whatever those calls are worth, and you can do that sum in your head.

The meter at dollarspersecond.com is built for the same move at the smaller scale. Put your own rate into it and start it on the next job you would normally not think twice about. Watching your own hour tick past in dollars is a quicker education than any spreadsheet. Work out your number this week and write it where you can see it.