The only pricing guide freelancers will ever need.

A thread…

Don’t set your prices based on what others charge or what you think the client will pay.

How much do you WANT to make? Work backward from there.

The difference between freelancers with a thriving business and ones who live project-to-project:

The former separate their business income from personal income.

If you don’t factor in a profit for your client work, you’ll never make any.

If you don’t factor in vacation time, you’ll never take one.

If you want your freelancing business to grow FAST, pay yourself as little as possible to get by and reinvest the rest.

Your freelance business income should cover:

1. Your desired salary
2. Cost of running your business
3. Tax
4. Profit

The salary your freelance business pays you should cover:

1. Fixed costs
2. Variable costs
3. Insurance
4. Tax
5. Disposable income
6. Savings

Costs typically associated with running a freelance business:

- Laptop
- Smartphone
- Phone/Internet plan
- Rent
- Software
- Education
- Marketing
- Legal
- Book-keeping

Spread the cost of one-time purchases over how long you’ll use them.

Don’t take taxes or profit out once a year.

Whenever an invoice is paid, set aside the percentage you’ve allocated for each.

Effective hourly rate = (income - costs) / hours worked

Many freelancers make minimum wage because they don’t understand this concept.

They end up severely undercharging.

Hours spent doing administrative work for your business aren’t billable.

Assume half your time will be spent on this.

This means you must charge twice as much to hit your effective hourly rate.

Most freelancers overlook this.

As a freelancer, you can take as much vacation time as you want.

And it can be paid time off.

Just factor it into your pricing.

I know a copywriter who only works 9 months out of the year.

Monthly billable hours * working months per year = total billable hours per year

Annual salary + costs + tax + profit = total income

Total income / total billable hours = target hourly rate

Project pricing = how many hours it will take to complete * target hourly rate

Retainer pricing = hours required per month * target hourly rate

The client doesn’t need to know your target hourly rate.

Summary:

1. Figure out how much money you WANT to make and work backward

2. Separate your business income from your personal income

3. Factor in profit and paid time off.

4. Understand billable vs un-billable hours.

5. Clients don’t need to know your pricing calculations.

I made a spreadsheet that calculates your target hourly rate for you.

I need to update it a bit to streamline things.

Is this something you'd want access to?

If so, subscribe to my email list using the link below.

I'll send you the sheet this week.

http://nabeelazeez.com/links/