Regarding: "His name is “David Geller!”
In my last teaching class, I asked my students how much they charge
for labour? All hands went up & said proudly that they charge
$25-$50.00/hour. I replied if you charge this amount you’d better
start looking for a bankruptcy lawyer! Only 1-2 went to $75.00.
It’s amazing how ‘out of touch’ many of them can be in the business
world these days…design rich, but poor in basic day-to day
-I find many schools do not teach or give academic training in the
So that number is quite close to gerry’s number. he quoted. So why
$75 an hour?
Let’s take Gerry as an example. he doesn’t buy gold, he’s a diamond
setter. lets assume you want to pay YOURSELF $40,000 a year. On an 8
hour day ifyou worked for another jeweler you’d be paid $19.25 an
hour. because you are self employed you have to pay the employers
social security. your boss matches the social security 7 Fica that
comes out of your pay check. thats 7.15%. So to make $40,000 ($19.25
an hour) you have to pay yourself $20.60 an hour.
So $20.60 an hour over an 8 hour day, 52 weeks a year pays
YOU $40,000 a year
but if you ever did a time study on yourself you’d see that the
amount of time you actually do stuff in the shop where you can
charge is about 5.5 hours a day. The other 2.5 hours is doing paper
work, talking, cleaning the polishing machine.
you must add the hours you don’t work to the hours you do work.
being the 2.5 hours you don’t work iswasted time you must now charge
about $30 each of the 5.5 hours you did work. 5.5 hours x $30 an
hour = $165 a day, 5 days a week, 52 weeks a year will bring you in
$42,900 a year.
by the way, remember this number. 5.5 hours a day of working for a
profit x 5 days a week x 52 weeks a year means you are only
working/charging 1430 hours a year. (If you worked in a store being
paid 8 hours a day you’d work 2080 hours) So remember 1430 hours
So if you’re going to make money from your SHOP you must charge the
customer for the light bill, phone, rent, etc. you CANNOT PAY FORIT
OUT OF YOUR $40,000 a year. that is your take home pay (before
So lets look at some examples:
EXPENSE YEARLY COST Rent $12,000 Advertising $4800 Utilities $4000
Alarm $1200 Office Supplies $2500 Insurance $4500 Shop tools | &
Customers have to pay this. Divide $39,000 by 1430 hours and these
expenses cost you $227.00 each hour you work.
Add the $27.00 an hour for expenses to the $30.00 an hour you must
pay yourself and you charge $57.00 an hour to charge is you were
just doing diamond setting and didn’t have to buy gold
Thats a ways from $75an hour but higher than $25-$30 gerry mentioned,
also i just threw the expenses out of my head. if you have one sales
person helping you with taking in work, ordering on the phone and
doing the books and that person is paid by you $25,000 a year (which
is $12 an hour, going back to your magic number of only charging for
1430 hours, then divide her $25,000 a year by 1430 hours and she cost
you $17.50 an hour. You must charge customers for her as well as you.
Add $17.50 an hour for the assistant to the $57.00 an hour you’re
now charging, now you must charge $75 an hour to be able to: Pay
yourself $40,000 a year Pay your assistant 25,000 a year Pay all
overhead at $39,000 a year Only work productively 5.5 hours a day
If a customer says “they guy down the street only charges $60 an
hour”, what would you do?
remember you still have an obligation to BRING IN $75 an hour to pay
if you discount you’ll have to work after the store is clsoed
because you’ll now have to produce in one day MORE than 5.5hours
or Take home less money
or reduce your assistants pay or hours
Or pay vendors NOT ON TIME and delay payment.
or you could just buckle down and sell the quality of your work,
stand your ground and get the 475 an hour.