How this calculator works
The annual cost of doing business covers everything you spend to keep the business running: rent, insurance, software, equipment, marketing and admin support. Spreading it over billable days shows what each working day must earn just to break even before your own pay. Spreading it over billable hours gives the hourly floor. Non-billable days are excluded from both counts, so the figure is higher than dividing by all working days, which is the point: only billed time can carry the cost.
Formula
Cost per billable day = total annual cost / billable days. Cost per billable hour = cost per billable day / billable hours per day.
Worked example
Annual costs of $60,000 over 200 billable days cost $300 a day. At eight billable hours a day the cost is $37.50 an hour. Any day that bills less than $300 leaves part of the annual cost uncovered.
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Frequently asked questions
Should my own salary be included?
Include a market salary for the work you do in the business if you want the true cost of operating. Leave it out if you want the amount the business must earn before paying you, and then add your income target separately. State which version you use.
How is this different from the consulting fees calculator?
This page finds the cost floor from actual spending. The consulting fees page adds your target income and converts billable days into a rate you should charge, so it produces a pricing figure rather than a break-even cost.
What if I have no billable days?
The cost per day cannot be calculated without at least one billable day, so the input requires one or more. If your work has no billable days, use total annual cost divided by all working days instead.