If someone were about to start a small business they would perform market research, prepare a business plan, develop a budget and create a marketing plan. Don’t deprive yourself of this valuable preparation because your title is “freelance,” technically that means small business with staff of one. Freelance ventures fail for many reasons such as lack of experience and focus, no planning and poor pricing structure.
The Going Rate
You know where to find jobs, but how much should you charge? The answer is that while there are salary and rate guides for freelancers, an hourly rate should depend on supply and demand, experience and what you need to live. One reason freelancers are unable to stay afloat is because they don’t know how much to charge for their services and play a guessing game just to win projects. The following sections will help determine how much you need to make per hour and when to vary pricing.
Make Sure Your Costs are Covered
In life and in business there are two types of costs: fixed and variable. Fixed costs need to be paid each month no matter how much money you make and variable costs are those you have some control over.
In order to figure out your hourly rate, first determine all fixed costs, or cost of living.
Your cost of living is the amount of money needed to purchase goods and services to maintain your standard of living. How much do you need to live? Take a few days to think about all the ways you spend your money each day, whether it is cash, credit, debit or being billed. This includes the biggies like rent and transportation to small expenses like tolls and lattes.