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Architecture

What a Floor Rate Is and Why You Need One

The minimum hourly number below which you never work. Calculated from your life.

Your floor rate is calculated from your annual BASE divided by billable working days (roughly 180) divided by eight hours. This number goes into every estimate as a direct cost. Your labor is not free just because you own the business.

The floor rate is your floor, not your target. The estimating system produces selling prices above it. But the floor ensures even your worst month covers what your life requires.