How To Realistically Set Your Fees – Part 4 – Real Estate
How To Realistically Set Your Fees - Part 4
Sue and Chuck DeFiore
Effect Of Bad Debts
So far, we have covered the major factors involved in setting your fee structure. We have set a realistic number of billable hours, calculated the effect of expenses and taken into account the cost of a benefit package.
This has brought us to an hourly rate of $77. By charging $77 per hour, you will have an income of $46,000 per year, plus benefits.
What happens when you have a client that does not pay you for your services What happens if a customer goes out of business before your invoice is paid How will these events affect your own planning Do you want to take a bad debt write off on your taxes Do you want to try to include for these contingencies in your fee structure Your answers to these questions will have a direct impact on how you operate your business.
Thankfully, unless you provide very poor service, most clients will eventually pay you. However, it may take you awhile to collect your money and you may have to settle for less than the originally billed amount. You have the option of adding late fees to your invoices, but keep in mind, the more time you spend trying to collect a past due invoice, the less time you have to devote to paying customers. Also, if you need to engage an attorney or collection agency, you will in all likelihood, not see the full amount of your invoice because of their fees.
One way in which you can protect yourself is to build into your fees an allowance for bad or uncollectable debts. If you estimate that 5% of your invoices will be either unpaid or underpaid, then add 5% to your hourly rate. For example, your hypothetical fee is now $77 per hour, 5% of that is $3.50, added together gives you a rate of $80.50 per hour. If we round this off to $80, you would have approximately $3300 per year cushion.
Allowing 5% for bad debts may seem high, however, keep in mind the present state of the economy and remember this figure can be adjusted as the economic conditions change. Today, it is not unusual for businesses to take longer to pay invoices then they did a couple of years ago. Most businesses expect to pay late fees for overdue invoices, however determining how much to charge and whether or not you are meeting the various legalities involved can be time consuming. It may be easier to add a percentage to your overall fees to offset bad debt. In a sense, you are spreading the economic risk over all your clients. For a small business this may be the safest and less time consuming course of action.
If your client base is large enough, a certain percentage of your customers will go out of business, leaving you with unpaid and uncollectable invoices. There is little chance you will collect any money in a bankruptcy hearing. To protect yourself, you can charge partial fees as your work progresses. This way you are assured of having received at least some of your money. Not all businesses are set up to take advantage of this option.
Remember, you are not in business to give away your services. Your goal is to provide yourself and/or your family with a reasonable income. Uncollected invoices are part of doing business, you owe it to yourself to consider this before you get stuck.
Copyright 2003, DeFiore Enterprises
About The Author
Interested in having your own successful, home based creative real estate investing business Chuck and Sue have been helping folks start successful home based businesses for over 17 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site Subscribe to our FREE "how to" Home Business Solutions Digest, its like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com
coaches@homebusinesssolutions.com
Office Set Up – Real Estate
Office Set Up
Sue and Chuck DeFiore
OK, you say, Ive decided to start my business. I have my idea, my identity package, my licensing and zoning done. Now I need to set up my office.
Your first step is to decide whether to convert a room into an office or a space/area in your home to office space.
If your space is limited you might want to get the type of desk that looks like an armoire so you can close it up at the end of the day. Or use a folding table that can be put away at the end of the business day. Or you can set up a mini-office in the corner of a room and put up a screen to hide this area at the end of the work day.
In addition, depending on the type of business you are running, you need to think of files you will need and how you will house those files. For some businesses a small letter file will suffice, which you can cover with a table cloth at the end of the day or you could use an end table with space for files, or you can purchase crates for files and stack those in a corner or closet.
Most businesses today need a computer, along with a printer, fax, and/or scanner. Again, if you use the armoire type of desk they use have space for most of this equipment, and you can close it at the end of the day.
For those of you that devote a separate room to your office, you have a lot more latitude in the design of your office. However, size of your office will come into play. To utilize the space to the best advantage, choose your desk and the placing of equipment based on your office size. This means measure items before purchasing them. Do a mock set up. While this might take a little more time initially, it will pay off in the long run.
The basics for most offices are phone, fax, computer and printer, and file cabinets. The file cabinet can also be used for miscellaneous supplies if you are tight on space.
We all have a picture in our minds of the ideal office. Unfortunately, we have to work within certain parameters. It can be done. You just need a little ingenuity sometimes.
Since there are so many differences between individuals and what they have to work with it is very difficult to be very specific in what to purchase. We would suggest being sure to get the basics: phone, fax, computer, printer and file cabinet, and work from there. Obviously, if you can devote a whole room to an office it will be a lot easier than if your space is limited.
The aforementioned should get you started on the set up of your home office. If you need help, contact us.
Copyright DeFiore Enterprises 2001
About The Author
Interested in having your own successful, home based creative real estate investing business Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site Subscribe to our "how to" Home Business Solutions Digest, its like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com
coaches@homebusinesssolutions.com
Liberate Your Set Esteem and Lose Weight – Diet
Liberate Your Set Esteem and Lose Weight
Kim Beardsmore
Are you a look-and-lose dieter Have you studied every diet ever created, read a zillion diet books, and yet are still unhappy with your weight
Has your quest for the holy grail of dieting become a substitute for actually making changes required to take the ill health out of your current diet
If so, you may not realise your thoughts are key to your happiness and success.
Do you look at yourself and say, "Im fat", or "My hips are too big" Many of us look in the mirror and immediately compare ourselves to those perfect human specimens we see every single day on TV, in magazines and in the newspapers.
Often we talk to ourself and make excuses, "Its my genes", "Im much too busy to get fit", "I like myself this", as a way of protecting yourself from the way we see ourselves now and the way we want to be.
If we were to be truly honest with ourselves most people actually want to lose a few pounds - if we only knew how.
The good news is you CAN achieve your desired body shape with the right thinking about yourself, an understanding of how to get optimal nutrition, healthy eating habits and how to incorporate activity into your lifestyle to keep your muscles toned.
But most important of all, you need a regular mental workout to keep your self-image in shape.
Self-image is closely connected to the success or failure of any goal you choose to seek after, but none more so that the goal to get yourself fit and healthy.
So how do you go about strengthening your self-image Well fortunately your self-image, just like your muscles, will respond well to a regular work out. You can actually strengthen your self-image with a few daily exercises.
Exercise One - Self Examination
Start by compiling a list of all those negative thoughts your have about yourself