Bake in "life happens" time into your billable hours projections

One of the steps I have you go through in my book when modeling your income is to project the number of billable hours you will work over the period of performance (PoP).

A typical, full time position will allow for about 1860 billable hours. This takes into account 2080 working hours per year, minus federal holidays, and a few weeks of vacation.

If you decide you want to take Fridays off, then you'd reduce that by approximately 20% to get something close to 1,500 hours.

Or if you wanted to take 8 weeks of vacation instead of 3, you could knock off an additional 40 hours x 5 weeks = 200 hours. If you worked 5 days per week but took 8 weeks of vacation you'd work 1660 hours.

But, one thing you should take into account is what I'm calling "life happens" time.

Last week a bunch of stuff happened that required me to take three days off of work in a row. My kid got sick, her daycare closed, and wife had some appointments she couldn't cancel.

That's around $3,600 in "lost" income for me.

To avoid being suprised by "life happens" time just subtract approximately 40-80 hours per year from your billable hours projections.

That way, you don't feel resentful when you have to inevitably deal with the things that will cause you to unexpectely miss work.

As a W2 you might feel resentful that you have to "make up" hours you miss per company policy.

As a 1099 you'll never have a boss telling you to make up hours, but as your own boss, you can be a jerk and force yourself to make up the hours because it's literally money out of your pocket.

But one of the reasons to go 1099 is to have the flexibility to engage with the rest of your life on your terms, so don't try to make up any hours. Just plan for it and take care of yourself and your family.

Want the full playbook? Check out Going 1099.