How Much Should I Charge
Making A Profit Is A Must

Going Broke is NOT an Option

How much should I charge is the age old question for freelancers.

The real truth of the matter is that one learns by trial and error...mostly error in the beginning of your career.

You will know you are charging too little when companies in India want to outsource their work to you!

...Elmer P. Fudd

You, and only you, can determine "how much should I charge" for each opportunity to bid on a work project. But there's...

Great News!

There are easy ways to determine hourly and daily fee schedules.

Follow the road below to arrive at your destination: "how much should I charge?"

First, determine how long should my work take to complete the assignment. Time is the key factor. You can add in other costs like printing, copying, etc. on top of your labor costs to arrive at a final price for submission to the client.

But, I'm getting ahead of myself.

Factors Used to Determine How Much Should I Charge

1. My Cost

   Realistically, how many hours in this next six months do you want to bill?

   Then identify your costs, other than labor. These could include insurance, accounting, gas/car expenses, taxes, pen/pencils, and other supplies.

   Later we'll look at how to put these items all together to arrive at a daily or hourly cost of doing business.

   It's important not to leave any expenses out of the calculation. Otherwise, you will miss accurately knowing how much should I charge the client.

2. What's the Marketplace Like

   Have you done any digging around to determine if there is demand for your expertise.

   To solve the problem of how much should I charge, in large part, will be determined by low/high demand factors in the marketplace.

3. Determining My Profit
   The market conditions you identify will go a long way in determining "how much I should charge." That charge must include a hourly profit over and above your costs.
4. How Good Am I

   Be realistic in determining you skill level compared to others in the same field.

   It's reasonable to start your fees out low and as you gain more experience, i.e., skill, you may charge more. Remember, you want to over deliver to your clients so you'll get other jobs from them.

5. What Other Professionals Charge

   Try to find out what others at your skill level/experience are charging on an hourly or by day basis.

   If you are a member of a professional association, trade group or local club, they may have a fairly good idea of the market rates in your area of the country.

   The key here is to ask as many locals as you can and then cross reference to get an average price.

6. What are My Services

   It's highly unlikely you can be all things to all prospective clients.

   So evaluate your best skill sets and concentrate your marketing to meet those needs. Becoming known for specific skills is much, much better than being a generalist.

7. The Client I'm Going After Is...

   There are many factors here. Is your work specialized, that is, have you taken extra training to develop your skill set?

   Are you at the high end or low end of the market?

   Are you sought-after client projects going to be complicated or fairly simple?

   Am I going to spend a lot of time prospecting for work or do I have at least a starting basic level of work?

   All these traits and more can determine you fee schedule. For instance, work for a repeat client may be at a higher or lower rate depending upon you personal situation.

Now, How Much Should I ChargeGet Started by deciding “what is the minimum you need to meet your needs."

Let’s say it is $500 per week.

Next, for the following 6 months, realistically how many hours do you think you will actually bill to clients, as an average, per week?

This does not include the time you spend marketing yourself, that’s your own time.

If this is 10 hours per week, then divide 10 into $500 giving your base hourly rate of $50; for 20 hours/week your basic hourly rate is $25, etc.

Next, determine your estimated operating expenses.

This includes your supplies to be used, any rent you will pay, car expenses (estimate your client miles times 53 cents per mile and divide that expense by the # of weeks in the six month period), taxes you’ll pay (e.g. 18% Federal and 6% state, etc.), use of your computer (yes, charge for equipment use), postage, copying, pay pal and credit card charges, trade publication subscriptions (yes, it’s part of keeping you informed), lunches spent hosting potential clients, if that is your style), etc., etc.

To determine your working rate, add up all of these estimated costs; then divide by the # of weeks in the period.

Divide this weekly rate by the number of weekly billable hours. Add this figure to your basic hourly rate.

Now, you want to make a profit don’t you?

This is your business and a business exists to make a profit. Profit is not a dirty word.

Profit dollars reward you for having done a great value added job for your client.

Profit is absolutely necessary in determining how much should I charge for my service.

Figuring your profit is easily determined. Just take a percentage of your basic hourly rate.

If your rate was $25 a billable hour, as in the above example, you may want to add 50% or $12.50 per billable hour as your profit. Of course, you may want to add another percentage amount. That’s A-OK. You know your market.

Finally, add your basic hourly rate, your hourly operating expenses and your profit.

What do you get?

The answer to your question, “how much should I charge” a client for my services. This sum total represents your market hourly rate.

Taking your hourly market rate times the number of hours required doing the client’s job gives you your project rate.

Being Smart is Better than Being Dumb

Having said all of the above, how much should I charge the client would depend upon your assessment of the particular situation?

Please do not be afraid to adjust your basic hourly rate to fit the circumstance. After all, it’s your business.

Some other points to consider:

• Your “project rate” is always easier to sell to the client.
• Your “market hourly rate” always benefits you!

Why?

Clients want to know up front how much it is going to cost. You need to be prepared to answer this objection.

How do I anticipate this objection and how will I overcome it?

Answer.

You have an obligation to educate your proposed clients.

First, clients do not know what’s involved in completing a given project, which you’re bidding on.

Second, clients think that, “this will only take you 3 or 4 hours (or a time far less than reality).

If any of the following are part of your effort, tell the client. These are all part of deciding how much should I charge.

• Preparation or research time
• Brainstorming
• Client changes or revisions
• Telephone and/or meeting time
• Travel time

No two projects are the same because each client is different…one could be more organized, for instance. Be prepared.

You will get the hang of it. You have to dive in. Yes, you’ll make mistakes. Who hasn’t?

But you now have the knowledge to over come one of your biggest obstacles: “how much should I charge.”

If you have questions, they are warmly welcome and answers are freely given. Please just fill out the form below.

Now, would you liked to be helped or to help others worldwide?

YOU'RE INVITED"

It is such a great feeling to kn ow you are helping others. So, here is an opportunity to enrich everyone's life.

Do you need help to determine how much should I charge, say, for a particular client or circumstance?

Or, possibly you have questions on any aspect of freelancing or want to offer advice or tips to others looking to make a good living freelancing.

Maybe you have question dealing with starting your freelance business?

If so, please take the time to ask for help or make comments now.

We all benefit by

Paying It Forward

Others want to help and receive help from you. They will thank you for it.

Thanks for sharing.


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Starting Your Freelance Career

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Freelance Resume Writing for Success

The National Association of Independent Writer and Editors has helpful information


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