Welcome to www.OnlineOrganizing.com -- A World Of Organizing Solutions Your Order Your Shopping Cart About Us Contact Us Site Map
Do You Need Help Getting Organized?Shop For Organizing And Business Development ProductsProfessional Organizing ServicesFind A Seminar, Workshop, Or Keynote SpeakerRead Our Two Free Monthly NewslettersFree Organizing Tips And AdviceResources For Professional OrganizersLearn How To Become A Professional OrganizerUseful Organizing Website LinksUseful Organizing Website Links

Search for:


You Are Here: Home - Newsletters - "Organized For A Living" - Article

     Pricing Your Projects

Determining how much to CHARGE for your services is often one of the biggest challenges for a new freelancer or consultant. If you charge too much you won't get hired and if you charge too little you'll starve. Take the time to read this article and you will figure out what you need to charge to thrive.

If you are a new freelancer or consultant, you have probably searched the Internet trying to look for AVERAGE rates of professionals in your field. Don't even bother. I will let you in on a secret -- now that the Internet is here, there aren't any "average" rates because demographics are too widespread. The United States has banned competitors from discussing rates amongst each other based on ANTITRUST laws. This is why you are having such a hard time finding rate surveys, there aren't any. Instead I will show you how to figure out what your rates should be by using a formula.

Start by figuring out what you want your ANNUAL salary to be. To determine your salary, you might want to pay yourself what you earned as an employee or take a look at www.salary.com to find out what an average salary for your profession is.

For this formula, you will need to figure out what your overhead is. OVERHEAD is an expense that cannot be found BILLABLE to a client, it is just a cost incurred by running your business. Please fill in a monthly amount for each of the following items. If you aren't sure what your overhead is, then look back on last year's credit card bills and checking account statements. Then add each and multiply your total by 12 to get your yearly overhead.
  • rent or mortgage
  • income taxes (use 45% of your annual salary)
  • utilities
  • insurance
  • office supplies
  • marketing
  • postage and shipping
  • telephone
  • accounting and legal services
  • travel
  • office furniture
  • dues and memberships
  • licenses
  • health plan or medical insurance
  • disability insurance
  • retirement savings

There are duties that must be completed for each client that are not productive towards COMPLETION of the project. Figure out the actual work HOURS are spent on the following duties. You will need this total later, so keep the number handy.
  • sales
  • emailing customer
  • phone calls
  • meetings
  • administrative duties
  • training

Now you will need to figure out how much of a profit you wish to make. Profit is the amount that you make OVER expenses. I recommend 20% in order to make an acceptable profit MARGIN. Profit is necessary for a successful business so make sure to count profit into your formula.

There are always variables that you will need to take into consideration when figuring out what you will charge. You must take into consideration the following:
  • What does your COMPETITION charge?
  • What is your niche?
  • How many years EXPERIENCE do you have?
  • What skills do you have?
  • What CLIENTS do you want to attract?
  • Are you working online, via phone, or local?

Follow these steps to figure out what your HOURLY rate should be.
  • annual hours - nonproductive time = BILLABLE hours

  • SALARY + OVERHEAD = total (1)

  • total (1) x PROFIT margin (10% to 20%) = total (2)

  • total (1) + total (2) = total (3)

  • total (3) / billable hours = your hourly RATE
For example, let's pretend that your salary is $30,000, you work 2,080 hours a year, and 500 of those hours are non-productive. If your profit margin is 20% and your overhead costs you $15,000 -- then this is how you figure out the hourly rate:
  • 2,080 - 500 = 1,580

  • $30,000 + $15,000 = $45,000

  • $45,000 X 20% = $9,000

  • $45,000 + $9,000 = $54,000

  • $54,000 / 1,580 = $34 per hour

The bottom line to your freelance business is that you want to make a good living. If your hourly rate seems too low then RAISE your rate till you feel comfortable with it. If several clients are way too eager to hire you, rethinking your hourly rate might be a good idea. On the other hand, if clients are very interested in you at first and then stop communicating with you after they hear what your hourly rate is, then you need to LOWER your rates. In other words, feel customers out to see whether your fees are correct or not.

If you have determined that your fees are too high then you might need to lower your overhead in order to lower your fees. Try cutting some of your unnecessary EXPENSES in order to make ends meet. When you make the change over to freelancing, sometimes there is a little suffering at first. Don't worry; it doesn't usually last long if you know how to save when times are good. Good Luck.


Rachel Goldstein has compiled a website with 1000s of freelance jobs, articles, and resources. She may be contacted at www.Allfreelancework.com.

Would you like to reprint this article in your publication -- or distribute it to a wider audience? Click here for reprinting instructions.

Want to receive these kind of articles via e-mail each month? Sign up for a free newsletter subscription.

Click here to return to "Organized For A Living" -- August 2003...

Add this page to your Bookmarks!

E-mail this page to a friend!

www.OnlineOrganizing.com is a service mark of Bradford, LLC.
Content on this site is © Bradford, LLC, All rights reserved.

If you notice any problems with this site, please contact our webmaster.
And if you don't see what you need you are welcome to "ask the organizer" any question!

To see what people are saying about www.OnlineOrganizing.com, check out our visitor comments.

Click here to view our privacy policy.

Calendar Of Organizing Holidays And Events Blog Central Sign Up For Our Free Online Newsletters Join The Conversation At Our Organizing Discussion Board Advertise Your Company On Our Website Be An Affiliate Of www.OnlineOrganizing.com
Check Us Out On FaceBook