Taking your hobby of CNC router to a side business can be a huge step for you. Setting down to calculate your CNC hourly rate is key to your future success.
So how do you find your hourly in this daunting task? Well, there are a few different methods we can work through to help find that hourly rate that makes the perfect sense.
Possibly charging by an hourly rate isn’t even the right approach. Maybe having most of your jobs set up as a flat rate per job is the best solution and more likely the ideal situation
The first step in finding your CNC hourly rate is figuring out what your time is actually worth to you. This can be accomplished by knowing what you would like to take home as an employee.
Keep in mind if you have ever read the E myth you should be working to be the guy bringing in the sales and not the technician of the company. However, when getting started I understand you will play multiple roles in this endeavor.
Also, remember every job that comes through the doors won’t always be worth your time so pick your work carefully.
The first step to finding out how much to charge is to calculate your fixed costs or overhead. This is crucial to understanding how much you need to charge to to be profitable.
We’ve made a free cost calculator below. Add everything you consider “fixed” or a repeating cost to the list and add the amounts
Edit any field in BLUE, and leave GREEN fields are calculations.
This will most likely be eye-opening. We recalculate our costs multiple times a year to make sure we are charging the right rates for our business needs.
A common method for a starting point for profitable fees is to double your hourly cost rate. That’s how we’ve preset the calculator but you can change the “Markup Factor” to your liking.
Once you’ve seen the calculated rates, you can set your own rate in “Your Rate” to see how that affects the calculations in comparison.
One method to account for employee hours/costs is to include their hours in Work Week HRS. If you had 5 employees working 8 hours a day per week, you’d enter 200 hrs.
To Use the Calculator:
You’ll want to Download in Excel or CSV format (File > Download) or
When signed-in to your Google account: Make a Copy to your Google Drive under the File menu to use in Google Sheets.