I've set myself 6 daily billable hours, with an X value per hour. However, on most days, I only work 2-3 hours and spend the rest of my time (5-6 hours) waiting for client responses.

Should I reduce my billable hours to 3-4? That would significantly increase my hourly value, but I'm not sure what to do with that increase.

There is a relevant answer to my question here, but the accepted answer basically says that you can do other tasks while waiting; I, on the other hand, cannot. When I have to multitask on multiple projects at the same time I make a lot of mistakes, and I mean it. My service quality significantly deteriorates when doing so.

So, if you have any suggestions or insights that could help me bill my work hours more accurately while also focusing on no more than one project, it would be greatly appreciated. If what I'm looking for is the holy grail, I'm open to other ideas as well.

1 Answer 1


The real question is: are you working as an "Employee Equivalent" or are you running a business?

When you state that you "set myself 6 daily billable hours", that sounds like you consider yourself equivalent to an employee. An employee works 6 hours and uses 2 hours for email and other overhead for that business.

The problem is that an "employee equivalent" needs a sales organization to get work for that person. That sales organization will take a huge chunk out of the billable rate.

Many years ago, I saw the following financial model for a business. The percentages fit also how a single person business might need to allocate their time.

Of every dollar that comes in:

  • 20% goes to taxes and profit
  • 25% goes to sales and marketing
  • 15% goes to administration and overhead
  • 40% goes to actually building the product or doing the work

This has major implications for pricing. This is why a business charges so much over what it costs to actually do the work. I spend a lot of time on marketing.

  • Hmm, interesting. I like that it's in percentages because that means values will vary depending on how many daily hours you want to commit to your business. But I'm a bit confused about considering myself an employee or a business. I set myself a certain daily amount, but I was thinking more something like "That's how many hours I want to spend daily on my self-employed business." Is that an improper mindset? Nov 18, 2022 at 19:07
  • I have heard many business owners say that they are "working on their business". I can spend 8 hours a day on the business, but perhaps have only 3-4 hours billable. The rest of the time is on marketing, accounting, planning, and other overhead. "The person who does your marketing sets your rate and determines your income."
    – David R
    Nov 19, 2022 at 0:43
  • "The person who does your marketing sets your rate and determines your income." How so? Is it a saying or is it something that marketers actually do? Shouldn't that be a thing for accountants? Nov 22, 2022 at 19:33
  • Most times, it is not a conscious decision. It is a consequence of their actions. For example, I read about a consultant who charged $1,000/hr. He spent 80% of his time on marketing his services. When someone suggested that he could cut back the marketing to get more billable time, his response was that it was because he spent 80% of his time on marketing that he was able to get the billable time at that rate.
    – David R
    Nov 22, 2022 at 21:01
  • Well, yeah. The more billable time you cut, the more you'll have to raise your rates. Secondly, could you expand on your answer? What do you mean when you mention "...on taxes and profit", "...to sales and marketing" and the other two? I'm trying to put into action what I would do with that 20% on taxes and profit, for example. I'm new to the business side of independent work, so it's kind of ambiguous for me. Nov 23, 2022 at 19:34

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