What is profit per hour?
Profit per hour (real hourly pay): Profit divided by the owner's working hours in the same period. It shows what the owner's time really earns.
Profit per hour = profit per month / (hours per week x 4)
Example
Nora's bakery makes $1,300 a month. She works 45 hours a week, 180 hours a month: $1,300 / 180 = about $7.22 an hour, less than half of the $15 a helper would earn.
Made-up people and numbers from the cases of our course; the math is real.
A common mistake
Dividing monthly profit by weekly hours: $1,300 / 45 = $28.89 is four times too much.
Try it with your own numbers: Real hourly pay calculator (free, no sign-up).
Practise this in block 1
Block 1 of Ownwise is free, with no account needed to start: short lessons on costs, margin and break-even, then a made-up case where you make the decisions.