What is an hour of your time actually worth?

Turnover per hour is the easiest figure to reach and the least honest one. It counts every dollar that passes through the business before materials, subcontractors, wages, vehicles, insurance, software and rent come out of it. On a business turning over $750,000 with an owner working 55 hours a week for 48 weeks, it lands near $284 an hour, which sounds like a lot until the costs are taken off it.

Gross profit per hour is the figure worth looking at. In that same worked example, at a 42% gross margin, the hour carries about $119, and that is before a single overhead is paid. It is common for an owner-operator to find that the hour they are proudest of, the one late at night on the quoting, carries the least of all, because it produces no revenue by itself.

The third figure is the uncomfortable one: what you actually draw, divided by the hours you actually work. Plenty of owners find that number sits below what they would pay an employee to do a job they keep doing themselves. That is not a judgement on the business. It is usually a sign that the pricing, the mix of work or the owner dependency needs looking at, which is the conversation small business coaching in Adelaide usually starts with.

None of the 3 figures is a target. They describe what is happening now, from numbers you supplied, and that is the whole of the claim.

The replacement figure answers 1 narrow question: what would a third party charge for the same block of hours? It is arithmetic, and it is useful for exactly the reason people misread it, so the misread is worth naming.

A saving would require 3 things to be true at once. The work would have to hand over cleanly, which most owner-held admin does not until somebody writes down how it is done. The hours you stopped spending would have to go somewhere that pays for the replacement, and an hour handed back to an already full week usually just gets absorbed. And the business would have to carry the extra cost while that settles, which is a cash flow question rather than an hourly one.

So the number on the result screen is a comparison and nothing more. Whether any of those hours are worth buying back depends entirely on what you would do with them, and no calculator can tell you that. Anyone who shows you a delegation figure and calls it a saving is skipping the 3 conditions above.

What a coach does with this is not the arithmetic. It is the part underneath it: which tasks genuinely require you, what would have to be written down before they could go to somebody else, and in what order. That is the ground hiring and team coaching covers.

The arithmetic is deliberately plain, so you can check it on the back of a docket.

• Owner hours a year = hours a week multiplied by weeks a year.
• Turnover per owner hour = annual turnover divided by owner hours.
• Gross profit per owner hour = turnover per owner hour multiplied by your gross margin, when you supply it.
• Drawings per owner hour = what you draw a year divided by owner hours, when you supply it.
• Low value hours a year = admin hours a week multiplied by weeks a year.
• The turnover that block of hours sits against = low value hours multiplied by turnover per owner hour.
• The replacement comparison = low value hours multiplied by the hourly figure you entered for having someone else do them.

There is no charge-out-rate input, on purpose. The hourly value here is derived from turnover and hours, not from a rate you nominate. A rate you type in is a number you already chose, so the tool would simply hand it back to you with a bigger font. The replacement figure is the only rate on the page, it is a third party's cost rather than yours, and it is used in 1 place only.

Banded inputs calculate from the band midpoint, which is why every output says approximate. Turnover per hour, gross profit per hour and drawings per hour round to the nearest $1. The block figures round to the nearest $100. Hours round to the whole hour and percentages show 1 decimal place.

No rate band is published for the replacement input. web-tools.md requires any published Adelaide rate band to be verified against live listings and carry a dated checked line, and no such verification exists for administrative and bookkeeping rates. Rather than publish an unverified band, the field takes your own figure and stays out of the result until you give it one.