Dollar-per-hour

By the end of this lesson you will have your dollar-per-hour: the one number that tells you whether growth is making you better off per hour or just busier. Beside it you will see the same hour in revenue, and how far your hour has to climb for a $1,000,000 year, first in revenue and then in profit, so the size of the climb is a number you can watch, not a feeling.

• Your dollar-per-hour, before and after any salary you pay yourself, so you know what an hour of you is worth today
• Your revenue per hour, next to what the revenue target requires
• The gap for each, as one number that tells you the hour has to change, not the hours

Why it matters. You probably know your best month. You may not know what one hour of your own work is worth. When a month grows because you added clients, people and hours, the month can climb while each hour is worth less. This calculator puts an honest number on your hour, so you can see the problem before you try to solve it.

What you need. Your account, where the result is saved. A normal month's revenue, counted as cash collected; if months vary, use the average of the last three. That month's business costs, not counting any salary you pay yourself. Your salary, if you take a fixed one. A fair count of the hours you work in a normal week.

Do this.

1. Enter your monthly revenue, as cash collected, not invoiced.
2. Enter your monthly business costs: team, tools and ads. Leave out your own salary.
3. Enter your monthly owner salary, if you pay yourself a fixed one. Otherwise leave it at 0.
4. Enter the hours you work in the business in a normal week. Count calls, delivery, messages, admin and content.
5. Enter the hours you want to work each week, and your working weeks per year. The defaults are 40 and 48.
6. Keep the targets at $1,000,000 in revenue first, then $1,000,000 in profit, or change them.
7. Read the results. They save to your account.

Reading the result. Your dollar-per-hour is profit before your salary, divided by your hours over 48 working weeks. The figure after salary sits beside it. Revenue is compared only with revenue, and profit only with profit. The profit target means profit after your salary, so the profit gap uses your after-salary figure. At the default targets, the profit gap is the larger one. A large gap means effort alone would take many more hours, which may not be realistic. The hour itself has to be worth more.

"The gap is the problem Million Dollar Year works on: raising what one hour of your work is worth, not adding hours."

"This is what the target requires at the numbers you entered. It is not a forecast, and we make no claim or promise that you will reach any revenue, profit or income figure."

Done when. Within 7 days of creating their account, the person has saved one dollar-per-hour result with every input entered.

Max's numbers for last month, at the $5,000 shown price, and his plan for the salary he set in lesson 1.1 and the hours he wants. The two cost lines are his estimate.

Max collected $40,000 last month: 8 done-for-you clients at $5,000, the price at the time of writing. Costs are $525 of software and AI and $2,400 of payment fees, $2,925 in total, his estimate. He pays himself a fixed salary of $10,000 a month from now on. He works 60 hours a week now, wants 30, and works 48 weeks a year. Targets stay at the defaults.

• Hours now per year: 60 x 48 = 2,880. Hours wanted per year: 30 x 48 = 1,440
• Dollar-per-hour, before salary: ($40,000 minus $2,925) x 12 = $444,900. $444,900 / 2,880 = $154.48
• After salary: ($40,000 minus $2,925 minus $10,000) x 12 = $324,900. $324,900 / 2,880 = $112.81
• Revenue per hour today: $40,000 x 12 = $480,000. $480,000 / 2,880 = $166.67
• Revenue target requires: $1,000,000 / 1,440 = $694.44 an hour
• Profit target requires: $1,000,000 / 1,440 = $694.44 an hour
• Revenue gap: $694.44 / $166.67 = 4.2 times today
• Profit gap, using profit after salary: $694.44 / $112.81 = 6.2 times today

Without a salary (illustration only). Before Max set his salary, the salary line was $0. The dollar-per-hour stays $154.48 and the after-salary figure equals it. The profit gap is then $694.44 / $154.48 = 4.5 times today. Setting a salary moves only the after-salary figure and the profit gap, which is why both are shown.

"The gap is the problem Million Dollar Year works on: raising what one hour of your work is worth, not adding hours."

"This is what the target requires at the numbers you entered. It is not a forecast, and we make no claim or promise that you will reach any revenue, profit or income figure."