How much do you get paid?
by Jeanette S Cates, PhD
Internet Strategist for Small Business
Every year Parade magazine conducts a survey on how much
people get paid in different professions. It's one of their
most popular issues. One year I even shared in the fun with
a front page feature for our local newspaper to tie in with
Parade's special issue.
When you work for someone else it's easy to figure out how
much you make. They tell you! But when you're self-employed
it's a little harder.
There are complex formulas you can use to calculate how much
to charge for your professional services, for example. And
there are guidelines on when to raise your fees. But that
all assumes you have clients to pay those fees.
What about those of us who sell products online? It takes
time to set up a site and even longer to market it. How can
you calculate what you're getting paid? Sure, you may have
another $100 in your pocket. But if it took you 20 hours to
get that $100 - you might consider a fast food career.
What we really want to know is - what is the Return on
Investment (ROI) on our time? And to do that we first need
to know where our breakeven point is.
Here's a quick way to do the math:
1. Decide on your hourly rate. For example, if you want to
make $100,000 per year, that's about $50 per hour. ($100,000
divided by 2000 work hours - that's 50 weeks x 40 hours.)
2. Calculate the number of hours you plan to invest in
creating and marketing the site. For example, for a recent
affiliate name capture project, I calculated it would take
- 1 hour to create the mini site
- 2 hours to write a special report to go on the site
- 1 hour to write an article to market the site
- 1 hour to write the autoresponder follow-up series
- 1 hour to set up a pay-per-click campaign.
That's a total of 6 hours.
3. Determine the number of units you will need to sell to
cover your hourly costs. For this project I was referring
visitors to an ebook. For each ebook sold through my
affiliate link I earn $15. My "labor" cost to set up the
site was $300 (6 hours x $50), so I need to sell 20 copies
of the ebook in order to break even.
Once I have this information I'm in a position to decide
whether or not to proceed with my project. In order to do
this I ask a series of questions:
- Am I likely to sell that number of copies?
- How long will it take to break even?
- Could I outsource this project and recover my investment
- What else can I sell on the backend to make this more
- Is this the fastest and best ROI of all the projects I am
And the questions could go on.
The bottom line is that many online entrepreneurs work
aimlessly on one project after another, never stopping to
consider the ROI on their investment. You would never do
that with your 401K. Don't do it with your time. Know what
you can reasonably expect to make and how much you're
getting paid to build your Online Success.
Dr. Jeanette Cates is an Internet strategist who works with
independent professionals who are ready to turn their
knowledge and their websites into Gold. Her reputation as a
speaker and trainer has earned her the title of "The
Technology Tamer." Jeanette shares her tips and expertise at