Is it just me, or are a lot of people hearing fellow self-employed folks worry about how they’ll pay their bills if they get sick or want to go on a vacation?
TL; DR: I recommend you continue reading to understand the “why,” but if you hate math or just want to jump straight to the calculator, the link is down below.
For those who want to know more, read on….
As a small business owner, especially a sole proprietor, your business likely revolves around you. But what happens when life inevitably throws you a curveball? Whether it's an illness, a family emergency, or simply needing a well-deserved vacation, being the backbone of your business can leave you feeling like there’s no room to step away.
The key to changing that? Pricing your services in a way that includes time off. Here’s why it matters and how to find that magic number.
The True Cost of "No Days Off"
Running a business without taking time to rest isn’t just exhausting—it’s unsustainable. Burnout creeps up slowly, reducing your productivity and quality of work over time. And if illness strikes or life demands your attention, not only will your revenue come to a halt but you’ll also leave your clients in a lurch. Without building in financial room to step back, you risk your health, happiness, and, ultimately, the longevity of your business, not to mention possibly damaging the relationships you’ve worked so hard to build with your clients.
Why Your Prices Should Reflect Your Time
Your time is your most valuable resource. But it’s not just the hours spent delivering services that matter—it’s also the time you need to rest, recharge, and stay healthy. Setting prices that account for time off ensures:
Sustainability: You can operate your business for the long haul without burning out.
Professionalism: Higher prices signal that you value your expertise and deliver quality, attracting clients who appreciate and respect your work.
Flexibility: You’ll have a financial cushion to weather unexpected life events without scrambling to make ends meet.
How to Build Time Off Into Your Pricing
Let’s look at a way to determine whether your pricing is set to sustain you. As they say, “It’s as easy as 1 – 2 – 3!”
1. Calculate Your Ideal Annual Income
Start by determining how much money you need to earn each year to cover your living expenses*, business costs, and desired savings. Say that’s $60,000. Then, add a buffer to account for time off. For example, if you want to have a total of four weeks available for days off each year, aim to earn your annual income in 48 weeks instead of 52.
It can be easier to look at this on a weekly basis. $60,000 in 48 weeks is $1250/week:
$60,000 / 48 weeks = $1250/week
2. Break It Down by Billable Hours
Next, calculate how many hours you can realistically work in a week. Be honest about your capacity—and remember you probably won’t be able to bill for all of the hours spent working on your business. Let’s use 40 hours/week.
Then, reduce the number of hours you get paid to work by factoring in non-billable tasks like marketing, admin, and professional development. If you already know how much time you spend on non-billable tasks, use that number. If you’re not sure, you can use a number between 20% and 40% of your working hours (depending on your industry), or use both to obtain a range:
40 hours * 20% = 8 hours/week spent on non-billable tasks (and 40 – 8 = 32 billable hours)
40 hours * 40% = 16 hours/week spent on non-billable tasks (and 40-16 = 24 billable hours)
3. Calculate Your (New) Hourly Rate
Divide your weekly income from step 1 by the number of billable hours calculated in step 2. This will give you a baseline hourly rate (or range). Again, on a weekly basis:
$1250 income / 32 hours = $39.06/hour (20% of time spent on non-billable tasks)
$1250 income / 24 hours = $52.08/hour (40% of time spent on non-billable tasks)
Note: Even if you don’t bill hourly, this number will give you a starting point for figuring out how to price your packages.
Want to try your own numbers?
The link to our Calculator is at the end of this post!
So What Do I Do With This Number?
The number (or range) you calculated above gives you good information: You know how much you need to charge so that your business supports you. You can check it against what others in your field charge to see if your fees are consistent (and change them if they’re way off base). You may be able to raise prices with existing clients (or start with new ones you take on) and cull those who will be too sensitive to an increase (make space for awesome new ones who will pay you what you're worth!).
And the number is not set in stone. It is simply a tool. You can re-run your calculations with any combination of numbers -- just be careful of GIGO: Garbage in, garbage out. If the numbers you enter are not realistic, the result will not be realistic either.
The Ripple Effect of Sustainable Pricing
When you price your services high enough to afford time off, you’re not just investing in your business—you’re investing in yourself. Time to rest and recharge makes you more creative, focused, and effective. It also sets an example for your clients and peers, showing that valuing your work includes valuing your well-being.
It’s Not Just About the Numbers
Yes, raising your prices is about covering the cost of time off. But it’s also about something deeper: giving yourself permission to step away without guilt. Your business thrives when you thrive. And to thrive, you need time and space for YOU.
So, take a moment to review your pricing. Does it support the life and business you want? If not, it’s time to make a change—because you deserve a business that works for you, not the other way around.
Want to try your own numbers? Check out our Calculator!
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*Note: Even though personal expenses should be kept separate from business expenses in the accounting records, we need to take personal expenses into account when figuring out how much to pay ourselves. If we don’t charge enough to live on, our business will not be able to support us.
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