How do I set my rate?
<p>The pricing of a freelancer: what a constant source of questioning! Do I charge too much, or not enough? Sometimes we wish we could be a little bird to go and see how much people working in our field are charging. Since it sadly isn’t an option, here are a few ways to determine exactly how much you need to charge.</p> <p><strong>THE BASIC RATE</strong></p> <p>Above all, it is good to set a rate that will become your ‘base.’ Obviously, the price can change based on multiple reasons, but it will at least serve as a reference.</p> <p><strong>ANNUAL TARGETED SALARY</strong></p> <p>First, identify your target annual salary. Try to stick to something realistic and do not get too far from the salary an employee would earn in the same area. As you gain experience, you will be able to increase your salary. To help you, refer to <a href="https://www.jobbank.gc.ca/home-eng.do?lang=eng" target="_blank">https://www.jobbank.gc.ca/home</a> and choose your area of specialization to get good examples of average salaries.</p> <p><strong>EXPENSES</strong></p> <p>Then, list all of your annual professional expenses (workspace rental, supplies, Internet, travel, etc.) and add them up together. Obviously, these can change but try to stick to your budget.</p> <p><strong>NUMBER OF HOURS PER WEEK</strong></p> <p>Then, calculate the number of hours you will spend working per week and add up the hours spent on management (billing, accounting, etc.).</p> <p><strong>NUMBER OF HOURS WORKED</strong></p> <p>Give yourself a number of days off in advance to determine how many weeks you will work in a year.</p> <p>When you have calculated all of the things mentioned above, you can do this calculation to give you a general idea of what your basic hourly rate should be.</p> <h3><strong>Target annual salary + expenses ÷ number of hours per week X number of weeks = Basic hourly rate.</strong></h3> <p>As we know, there are probably a multitude of work-related tasks on your schedule (networking, prospecting, etc.): you will not to be able to bill all of them, and if that is the case, you should think about doubling that amount. Also, by doubling your hourly rate, you also get the contributions you have to pay to the government since they are not deducted from your pay as a ‘regular employee’. Of course this rate is not set in stone, it is used to give you a general idea, but in fact, you will not always charge the same number of hours per week. This rate can therefore be adjustable. To be able to be self-employed and live well, you need to show flexibility. </p> <h3><strong>Variable rates</strong></h3> <p>Depending on the speed of task execution, it can also be profitable for you (and for your clients) to provide package deals. It’s a good way to plan your budget more efficiently and will allow your customers to know what to expect.</p> <p>Also, your hourly rate may also vary due to inflation, so you can review it every year or so. Several cases may require a variation of your rate, such as subcontracts. You probably want to offer discounts based on volume or for recurring contracts, and require a higher payment for urgent projects with smaller delays. As you can tell, your rate will therefore tend to vary according to your type of clients and the work that needs to be done.</p> <h3><strong>Low rates: be aware!</strong></h3> <p>It may be tempting to offer a competitive price to attract new customers. However, think about the message you want to communicate and about your credibility. A rate that is too low can actually do the opposite and scare some customers away who think that pricing is a direct reflection of the quality of the work.</p> <p><strong>Happy billing!</strong></p> <p></p>