Updating the resume and setting minimal earnings requirements
Looking ahead to the end of tax season I became concerned with my lack of future work projects. So I updated my online resume and sent out a few inquiries.
I also updated a cover letter to go with the resume that is not published online and, for the first time, decided to include a minimal earnings in the body of the cover letter. The thought was that this might help filter through job opportunities more quickly so that neither party would waste time considering work that won’t be successful anyway. This almost immediately sparked a comment from a person who knows that my maximum internal hourly rate used to price some jobs is $200 and wondered if it was fair that I set a $55 minimum rate for ‘outsiders’.
I don’t see it as a matter of fairness but rather just an issue of someone who does not understand the mechanics of a small business practice. It is typical for a working associate’s rate to be about 1/3 of the gross revenue of any professional practice. The bottom line, skipping any detailed explanation, is that these two earning rates actually produce the same minimal level of net earnings in the end. This minimal level of earnings is not something that I aspire to but rather the minimum where it makes economic sense to accept any new work. In other works, it means that under current cost structure, I would accrue personal and/or business debt if I accept work at a lower rate. It is tough for me to imagine a scenario where that strategy makes sense.
Yes, I am aware that $55 is low for accountants. That’s just not the point here. In the end I concluded that if I need to explain more than that, perhaps the person I’m talking with is not a good client candidate after all.