Wednesday, September 22, 2010

My Work Cubicle

I received my last official paycheck in 1973, when I walked away from a secure, $10k/year job in the physics industry. When I was working, I had my own office, with a desk and everything. I had a large experimental lab to play in and all the fancy new electronic equipment I wanted. All I had to do to justify my paycheck was submit my Weekly Activity Report by Friday each week. I found it ironic that I was paid for my WAR Report, and, as a peace activist, I eventually decided to just walk away from that future and that industry.

Now I work "at the bench" every day. I listen to either old fashioned Rock and Roll (read: Pink Floyd) or Classical music (read: Beethoven, Brahms and Schubert), depending on my mood. I work when I feel like it, and take breaks when I want. My desk is my bench. I have all the antique tools I want. All I have to do to justify my paycheck is deliver the final product, satisfy my client and cash the check.

This photo shows a typical day working on the Federal tall case clock I made early last year (or the year before, since I now have a terrible sense of time). In my mind, it was either yesterday, or "years ago" or "many years ago." When you work every day, it is hard to even notice holidays.

I am often asked about how I calculate my price for working, since I have been self employed for so many years. I started out charging $5/hour, then $10/hour, and, after 15 years, $15/hour. My business policy was always to present a proposal to the client before work began, which set the price and time agreed upon by both parties. If I was able to do the job faster, than I made a profit, and if I took longer than I thought, I lost money. In any event, I always got paid in full when I delivered the final job, and there were no surprises.

There is a big difference between working at a job with a salary and working for yourself. When I submitted my WAR Report, I got paid, regardless of how much actual work I completed that week. As a self employed worker, I can say I charge $25 or $100/hour or what ever price I want, but I don't actually collect that amount for each hour I am at work. The real question is how efficient am I at what I do? No one is 100% efficient all the time.

When I started my business, I decided to log my time in a book. This book had the hours for each day broken down into 15 minute intervals. For 2 years, I would stop each quarter hour and log into this book who was paying for that time. If I was sweeping the floor or sharpening chisels, or just goofing off, the time was paid for by the business (lost income). However, if I was working on a job, or even thinking about a project, I could bill the time to the client (earned income). Eventually, I realized that to be 40% efficient was good, and to be 60% efficient was great. While I was at work 10-12 hours each day, I was only earning somewhere between 5-7 hours of pay.

The next thing I did was to calculate my overhead. That means that I took the total cost of my business for the entire year, which included everything I spent to stay in business, and divided it by 365 to get my actual per diem cost. It was very interesting to realize that I needed that amount of money earned every day just to break even, and that was if I actually worked every day of the year.

As a good professional business man, I also needed a profit to grow the business. Assuming a modest 20% profit on all work, and perhaps a 10% set aside for retirement savings, these figures would need to be added to the daily overhead cost.

Since I don't actually see the value in weekends, I choose to take my weekends (52) and divide them into three separate months of time over the course of the year. That means I work 7 days a week for 3 months, and then I take a 1 month "week end" to travel. The result is that I actually work only 260 days a year, but I am "at work" an average of 10 hours a day.

The end result is I need to take my total of 2600 hours a year and divide into the total cost of overhead, plus profit, plus retirement account, multiplied by the efficiency, to get my actual price per hour billing time.

This formula has allowed me to stay in business for many decades, satisfy my customers with good value for the cost, take regular long "weekends" and, all I have to do to keep the doors open is actually complete only 5 hours a day of good, earned income.

Much more satisfying than writing a WAR Report every week.


Peri said...

You may be the only person other than me who figured out their working schedule and "value of time" this way! When I was working out in the world I had a schedule and an amount I was paid for the jobs I had to do to consistently have the money to pay all the bills. But as an artist I wanted to pursue making money with that training as a small market in a "depressed area" that meant not a lot of consistent funds from my work -hence the need mentioned above. I used the same sort of formulation for my "off from the first job, on to the second" and while it required more dedication than anything else, it did work. Now that I am retired from " the real world" I just may return to that formulation with your "weekends" planning added to it...I might accomplish something again instead of doing very little! Thanks for the reminder!
I, personally, am glad you changed the job!!! Love my WPE pieces --Yes I do.

W. Patrick Edwards said...

Thank you for your interesting comment on this post. I appreciate your input and value your support. In fact, I would like to thank you for letting me show your jewel box in two museum shows and at the header of this blog. Without support from collectors like you, this art would be lost forever.