You know how I’m always saying money is never just about the numbers? One reason is that how you think and feel about money is often shaped by conditioning.
And if, like me, you started working as a teenager—first as a babysitter and then at the mall—you likely learned to view work through a time-focused lens. Even if you didn’t work in high school or college, there’s a good chance your career began with an entry-level position that was most certainly task-oriented and time-bound, where value was measured by hours worked, not by the impact created.
So, as a result, many of us learn early on to equate the value of what we do with the hours we put in, not the outcome of our work.
But, here’s the thing: that hourly mindset can end up limiting us as we grow beyond those first jobs, blinding us to the full value of what we bring to the table.
In fact, it can hold us back from seeing ourselves in a different light, too!
I still remember the first time I took work home, feeling so grown-up and responsible. But when I realized I wouldn’t be paid for the hours spent at home poring over documents, it was a bit of a shock.
Over time, as my career progressed and I took on roles where the focus shifted from counting hours to achieving results, the way I got paid changed, too. I went from receiving a bi-weekly paycheck based on hours worked to one based on results and responsibilities — paid monthly, regardless of how many hours I clocked.
The Shift Beyond Hours
This shift of moving from working as a non-exempt employee to an exempt one was more than just a change in pay structure; it was a shift in mindset. Looking back, I realize this transition — from focusing on tasks and hours to focusing on goals, outcomes, and efficiency — was an invaluable training ground for business ownership.
But, here’s a little secret: adjusting to a new pay structure was far easier than changing my mindset about what I was actually being paid for.
While I don’t have data to back this up, I know many entrepreneurs start their businesses after working as employees. And I wholeheartedly believe that shedding the conditioning of an hourly mindset is essential for success — whether you work as an exempt professional or own a business. Success, which is best measured by the value and results you deliver and the impact you create – not the hours you log.
Because holding onto hourly thinking can lead to underpricing, overworking, or both.
Ultimately, hourly thinking can cause you to charge in a way that doesn’t reflect what you’re truly bringing to the table.
But, Know the ‘Hidden’ Hourly Rate
Even as we let go of hourly pricing, there’s undeniable value in knowing your ‘hidden’ hourly rate.
Understanding this baseline isn’t about quoting an hourly fee to clients; it’s about identifying what’s profitable and sustainable and charging based on the true worth of your work. When you know your hourly rate—even if you never mention it—you can confidently structure fees, retainers, and packages that honor your time and expertise, safeguarding you from undercharging and overcommitting.
Once you uncover this hidden rate, it becomes your benchmark for a sustainable business model. Regardless of how you price your services, this rate helps ensure you’re delivering value in a way that sustains and respects your growth, energy, and expertise.
Here’s how to calculate your hidden rate:
Let’s say your business aims for $250,000 in revenue, with $100,000 in expenses.
That leaves you with a net income goal of $150,000.
Estimate your billable hours. If you plan to work 20 billable hours per week for 48 weeks each year, you’ll have:
20 hours/week×48 weeks=960 billable hours/year
Divide your net income goal by your billable hours to find your hidden hourly rate:
150,000÷960=156.25
So, your hidden hourly rate is $156.25.
But there’s another layer: this rate also accounts for your “invisible time”—the essential yet non-billable work you do.
The hours you spend on administration, client follow-ups, marketing, or professional development don’t generate direct revenue, but they’re essential for growth and stability. Knowing your hidden hourly rate ensures that this invisible time is factored in, so you’re covered for all aspects of running a business.
But, here comes our dear friend: Nuance…
Of course, there is a caveat: some businesses need to provide an hourly quote. Even in these cases, knowing your hidden hourly rate is invaluable, as it can guide you to set a rate that’s profitable and reflects the true value of your time and expertise.
Client Expectations; Your Needs
Most clients aren’t concerned with how long your work takes; they’re interested in the outcomes and results that only your expertise can deliver. Your hidden hourly rate allows you to honor your unique skills, insight, and the transformation you provide—a shift that’s essential for your financial stability, creativity, and well-being.
And though this is especially valuable for entrepreneurs and business owners, knowing your hidden hourly rate can be a powerful tool for professionals in any career. It’s a reminder that the value you bring goes far beyond hours spent.
