The results vary, but Susanna concludes that several sources have agreed that the median salary for a PI sits at around US$44,500 (as of 2014).
And that got me thinking.
As it turned out, I had just done some number crunching of my very own and had concluded that my yearly business expenses, over the past four years, averaged at around $30,000 per annum.
This means if I want to earn a salary equivalent of $70,000*, I need to bill out around $100,000 a year.
With me so far?
If we break this down into an hourly figure, roughly the first $15.00 only covers my day to day running expenses.
AS LONG AS I'M BILLING OUT 40 HOURS PER WEEK!
But so much of what we do is unbillable time. Perhaps if we look at a 40-hour work week as our goal, only 30 hours are actually billable, the remaining 10 are not.
And, considering holidays, there are say 48 work weeks in a year.
So that $70,000 actually breaks down to a base rate of around $50.00 per hour (remember, because there are only 30 billable hours in your 48 week year) AND I still have to add another $20.00 per hour to cover my expenses.
So my billable rate needs to be at least $70.00 per hour and I need to bill 30 hours a week in order to make my target salary equivalent.
Food for thought.
* This would be an average salary expectation for an investigator here working in a governmental organisation.
I found that there are two things to consider, raising incoming funds and reducing expenses.
ReplyDeleteWhat you need to do is to increase your fees for insurance clients by 25% - 30% (don’t rip the ass out of it), broaden your client base to include a few blue chip and fortune 500 clients, take on four or five staff and broaden your service offering to include achieving the impossible under budget in hours rather than days. Simple really if you put your mind to it.
As far as reducing costs is concerned;
Ditch the Porsche, buy a Corolla. Downgrade from Louis Rodier Cristal to something a little more local (the Pelorus Vintage 2009 perhaps). Consider reducing household staffing levels (do you really need full time garden staff? I get by quite well with just a butler.) Instead of monthly trips to the tailor I find mail order from my man in Mumbai to be quite sufficient and I only need to put aside a few days of my winter leave to visit him each year. Again it’s just a matter of nipping and tucking here and there.
Hope this helps.
Tony
Dearest Tony:
DeleteFirstly, kindly send me an electronic missive to anon@notstalking.com as I seem to have inadvertently misplaced your card.
Secondly, Mumbai is hardly Savile Row. I fear I would be laughed out of the Club.
Toodle pip.
The problem with your analysis, Tony, is there are certain things we must have in order to properly do our job. We have standards.
ReplyDeleteThe Ferrari is non-negotiable. Sure, it may seem like an extravagance, but how else are we supposed to keep up with that octogenarian in the Lincoln Town Car who insists on driving 95 MPH on surface streets.
Then there's the matter of household staff. Sure, we could whittle it down a bit by losing one or two of the garden staff, but ... what? ... are you suggesting that I tend the lawn? Bollocks.
I could probably shed the lifelong friendship with TC and Rick, but they really do contribute to the overall quality of life. And besides, without Island Hoppers aerial tours, how do you suggest we conduct surveillance? Have you considered that?
Based on my calculations, I need to bill at around $300 to $500 per hour just to cover expenses. And ... seriously ... 40 hours per week. Come on ... I've never worked more than a solid 10 billable hours in a month. Of course, that shouldn't stop one from billing 40, AmIRight? Just a few things to think about.
This is Hal, BTW. :)
DeleteHal Hal Hal,
ReplyDeleteI see that you are from the “old school.” It is time to move on Sir.
There is an old saying, “Those that can do, but those that can’t teach.” I prefer “those that do but they are typically told to do it by those that don’t want to.”
That’s where the four to five professional staff come in. They can use their own Ferraris for octogenarians in the Lincoln Town Car. Personally I believe Ferraris to be tacky playthings. Maybach is the only way to go.
Good lord no! I would never suggest that a gentleman indulge in manual labour. I recommend the Husqvarna Automower for a mere $2,400. I have three, one for the polo paddock, one for the front lawns and one for the tennis court. I only have my garden chap come in once a week for the weeding and a bit of trimming around the lawn edges. I have also trained mine to take care of the pool and spa bath as well. (another example of cutting costs through lower employee numbers).
Again, to move in to the modern age, aerial surveillance is done by drone these days my good man. Granted the helicopter has its place but this is typically restricted to attending the races or a weekend trip to our lodge.
I do happen to agree with your billing methods but believe your fees are a little on the low side. As for “working” 10 hours a month, well all I can say is that a gentleman does not “work.” One delegates to one’s underlings.