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Archiver > APG > 2001-04 > 0986969077


From: Jeanne Larzalere Bloom <>
Subject: [APG] Budgeting/Business Plans/Pricing Services
Date: Wed, 11 Apr 2001 01:05:29 -0500
References: <4.3.1.2.20010411001000.00b235b0@pop.gis.net>


For this thread I will take off my genealogist's hat put on my financial
one as I have worked with small businesses for almost 20 years. Many of
the same skills needed to be a genealogist are ones that you need to use
to be a successful business person. Genealogists first determine what
the goal is for a research project. For your business you need to
answer the question: Where do you want your business to be at the end
of the year?

Before you do the research you develop a plan. You need to do the same
thing with your business. What are the steps needed to reach your goal
by the end of the year? For instance, your goal maybe to "pay" yourself
$20,000.00.

One of the first lessons for any small business is that the tax man
(federal, state, local) is the first person paid. That "payment" can
range, depending on where you live and your tax bracket, from about $.33
to over $.50 for every dollar of earned self-employment income. The
initial tax consideration for any business, including genealogy, is to
determine how aggressive one wants to be on the tax return. The more
aggressive you are, the more detailed your records need to be for the
IRS. Before we consider any other expenses, you will need to bill at
least $30,303.00 to pay taxes (assuming 33 percent rate) and to "pay"
yourself $20,000.00.

I divide my other expenses into two categories - those reimbursed by
clients and nonreimbursable. The reimbursable costs I consider a "wash"
and will not address here.

Those costs that may not be reimbursable by client can include, but are
not limited to:
Telephone$1200 (two lines, business & fax)
Education$1000 (conferences/institutes)
Travel$ 1000 (motel, transportation, dining)
Office Supplies$ 500
Books/maps$ 500
Dues/Memberships$ 300
Equipment replacement $500 (sinking fund)
Subscriptions$ 200 (including on-line services)
Internet Provider$ 200
Photocopying$ 200 (costs not reimbursed by client)
Software$ 150
Postage/shipping$ 100 (costs not reimbursed by client)
TOTAL$5850

This is not an exhaustive list. Depending on your business these costs
can include utilities, rent, printing, insurance, automobile costs, bank
charges, etc. Now you need to bill at least $36,153, or over $3,000 per
month, if you want to make your goal of paying yourself $20,000.

In theory the number of working hours in a year are 2,080 (52 X 40).
This does not include any vacation, sick days, etc. Without taking any
time off or having any down time, you will need to bill at least $17.38
per hour to meet your goal. You need to decide what a realistic number
is for possible billable hours during a year. If, for instance, 30
hours per week for 48 weeks is more reasonable (1,440 hours) you will
need to adjust your hourly rate to at least $25.11.

Enough wearing the financial hat for tonight. (:

Jeanne Larzalere Bloom, CG (SM)

CG, Certified Genealogist is a service mark of the Board for
Certification of Genealogists, used under license by board-certified
associates after periodic competency evaluations. The board name is
registered USP&TO.

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