[thelist] A Beginner Freelance Question

[Bob Haroche]

Hello Webmaster,

Below is an email I wrote to someone else a while back about one way
of thinking about /how to price/, as opposed to /what to price/. I
think it still holds true.  My personal experience, like most
freelancers I'm sure, is that I started low but steadily raised my
rates as I gained both experience and confidence.  I've also found
that even when I handle a smaller job, the client usually keeps me on
for the ongoing maintenance which over time provides a thin cushion of
income between the bigger projects.

HTH.

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Regards,
Bob Haroche
O n P o i n t  S o l u t i o n s
www.OnPointSolutions.com

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Here's how I go about figuring what to charge for my one-man design
shop.

1. I first figure out what I need to live on a year.  I figure what I
spend
in a year plus how much I want to save, and then multiply that total
by,
say, 25% to account for taxes. The result is my "after tax paycheck"
if you
will.

2.  I next figure out what it will cost me in business operating
expenses to
earn that figure above.  I add that figure to my paycheck figure, and
the
result is my target business annual revenue.

3.  Now that I know what sales my business needs to generate for the
year, I
figure out how to value my time in order to meet that goal.  I start
with
365 days a year, subtract out weekends (104 days), and vacation/sick
days
(24) -- leaving me with 237 work days in the year.

4. I then figure I will work 8 hours a day -- or 1896 "workable" hours
a
year.  Of those hours, half of them I can figure I'll spending on
administrative matters, marketing, networking and other non-client
chargeable time.

5.  That leaves me with 948 hours in the year in which to charge
clients to
earn my target business annual revenue.  If I had determined, for
instance,
that my business sales receipts need to be $100,000, then my hourly
rate
should be about $105 (100,000 /948).

I typically don't work on an hourly rate though, instead usually
quoting a
flat rate for a project.  To do that I estimate how many hours I'll
need to
do the project -- from client consultation to site planning to
production to
launch.  Then I add 25% to that figure.  I take that number of hours
and
multiply it by my hourly rate and come up with the flat bid.