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“What is the #1 pricing mistake I see clients make?” You ask.

For all my LinkedIn colleagues:
👉 Using total working hours instead of actual billable hours to calculate their overhead and staff utilization rates.

Here’s what happens ⬇️
You’re agency has a team of 3.
• Salaries: $80k each → $240,000/yr total.
• Contracted hours: 2,000/yr each → 6,000/yr total.
• Quick bill-out assumption: $80/hr (100% mark-up for profit & ‘cost of doing business’). Looks fine, right?

❌Wrong.

First up – here’s what actually happens:
• Admin & meetings: 400 hrs each (1,200 hrs).
• Stat holidays + 12 paid sick days: 150 hrs each (450 hrs).
• True billable hours: 4,350 (not 6,000).

Next up – let’s add up all of the true ‘costs of doing business’ :
• Staff costs (+ MERCs): $259,200 ÷ 4,350 hrs = $59.59/hr
• Overhead (remote team @ $110k/yr): ÷ 4,350 hrs = $25.28/hr
• Unaccounted costs (bad debt + asset replacement) + 20% profit margin = $97,840 ÷ 4,350 hrs = $22.49/hr
👉 Total = $107.36/hr

Compare that to the ‘quick bill out x 2’ at $80/hr…
❌ You’re underpricing by $27.36 every delivery hour.
❌ Over 4,350 hrs, that’s $119,000 in profit left behind.

Why clients come to me? They aren’t overpricing themselves out of sales… they’re underpricing themselves out of profit.

Your true billable hourly capacity in your company drives these three key data points:
✔️ Cost per employee
✔️ Overhead recovery
✔️ Profit margin

Get the hours wrong → the model underprices. Get them right → you reset to profitability.

💬 What’s your actual billable %? Have you calculated it?

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