Freelancer: How Do I Charge My Client?
As much as I enjoy being a fulltime freelancer, 2012 would be a year of change for me. This year, I have a team to work with as I move forward in the communication industry. This team formation empowers me to provide a wider range of services to my clients, yet I cannot deny the fact that I really do miss working on my own. Anyway, one of the things that was brought up on the discussion table as the team came together is Rates Card – How do we charge our clients?
It is one of the most frequently asked questions by other freelancers out there; one that many have trouble figuring out what is best for their clients and themselves. Personally, I don’t believe in overcharging my clients, undercharging myself or spoiling the market price. Thus, I practice one simple formula that justifies it all. Here is how it goes.
Step 1 – Decide how much you want to earn in a week. Sit down and sort out your finances. List down the amount of money you require to live a comfortable life that includes items such as food, fuel, daily expenses, rents, loans, insurance, maintenance, clothes, books and others. Add a 5% contingency to the amount, which you may want to save for emergencies.
Step 2 – Decide how many hours you want to work in a week. This is very important. As fulltime freelancers, we sometimes forget to treat ourselves as our own employee. We work non-stop; more than 9 hours a day, more than 5 days a week. This step helps you to sort out your working hours so that you will have time for yourself and family, as well as assists you to estimate how many projects you can undertake.
Step 3 – Divide the total you want to earn (step 1) with the amount of hours you intend to put in (step 2) within the week. This would result in your hourly service rate. It is a safe way to ensure that you get paid enough for the hours you are putting in for any projects. And if you put in extra hours, you should earn more than you require in the first place.
Step 4 – Decide how many hours required for the project. Thus, when you receive a job brief and need to quote your clients for a task, all you have to do is look at the hours required to complete the task. Then multiply those hours with your hourly rate. That way, you will not undercharge yourself and it is more justifiable for your clients too.
It’s really as simple as the 4 steps above. And it has never failed me thus far. It helps to quicken my quotation process without the hassle of comparing my rate cards with others. Afterall, we all have different values through our different level of skills and knowledge. It’s best to charge our clients based on what we are worth. Here’s an example of how it works.
Total projected salary of the week (step 1): RM1,000
Total hours intended to work in the week (step 2): 4 hours x 5 days = 20 hours
My hourly rate (step 3): RM1,000/20 = RM50 per hour
One flyer project: 5 hours of work
Estimate quotation for flyer: 5 (hours) x RM50 = RM250
Final quotation for flyer: RM250 + 10% contingency (other project expenses) = RM275
And that’s how I charge my clients. So by working the total hours I have assigned to myself, I can be sure to earn enough to cover my weekly expenses. If I work more hours, then I get a bonus at the end of the week. That’s how I go about charging my clients. How about you?