When you start out as a freelancer, nobody tells you that charging for your services will be one of the most challenging tasks of all.
Follow these seven simple steps to make sure you’re setting the best freelance rates possible – for you and for your clients.
1. Work out your target annual salary
Ask yourself how much money you want to make. If you’ve had prior experience in full-time positions, you’ll know what salary you need for your level of experience.
If not, it helps to check what salaries are being offered by similar positions online.
2. Make a list of expenses that would be subsidised by a full-time job
When your home doubles as an office, you have a few extra expenses to consider. These costs could include medical aid, internet, tax obligations and even electricity usage.
Calculate the total annual cost of these expenses and add it to your target salary. The total amount will be your actual required salary.
3. Calculate how many days you’ll work each year
You may not have a solid nine-to-five, but, realistically, you won’t be able to spend many more hours than that in front of a computer each day.
Besides, you’re not a machine, and you’ll need to account for leave days, holidays and sick days. Then there’s the question of whether or not you plan to work weekends and public holidays.
4. Now, calculate the number of billable hours
Now that you know how many days you’ll be working, you can calculate the number of hours. Give yourself an average of eight hours for each workday, but bear in mind: not every hour will be spent working.
Set aside a few hours for emails, cold calls and pitches. Once you’ve subtracted those, you’ll have a good idea of your total billable hours for the year.
5. Determine your hourly rate
With the information you have now, it should be easy to calculate a suitable hourly rate. Simply take your target annual income, add your expenses, and divide that by your annual billable hours.
So, if your target annual salary is R300 000 including expenses, and you have 1400 billable hours a year, your minimum rate per hour should be around R215.
Now, any job that pays more will be extra income over and above your target salary.
6. Remember: not all jobs make sense at an hourly rate
It’s great to know how much to charge per hour, but as a freelancer, you’ll soon realise some jobs are better charged on a per-project basis (or a per-word rate, if you’re a writer).
If it makes more sense for the job, tell clients how much a project will cost in its entirety, not how much time it will take you.
For example, rather than telling a client, you’ll need R215 per hour to design a web page, tell them the total cost of designing the page.
To a client, five hours at R215 seems like much more of a financial blow than R1075 for a beautiful new web page.
7. Check out the recommended freelance rates in South Africa
Still not sure you’re charging a fair price? There’s a way to make absolutely sure you’re on the right track.
The latest report published by the South African Freelancers’ Association (SAFREA) includes the recommended freelance rates for all sorts of professions, from writing to graphic design to photography.
Simply read the report, scroll to the last couple of pages, and check that your rates are in line with the industry standard.
Your own space or better
If you’re going to do freelance work, it’s crucial that your space at home is suitable. But even when you think you’ve got your home office all sorted out, you might find the lack of physical interaction with other office workers a bit isolating.
Coworking spaces such as The Workspace is the answer. At The Workspace, we offer affordable, fully serviced offices and coworking, and all our clients have access to meeting rooms, boardrooms and a range of business services.