Subscribe to CX E-News
How long is a piece of string? The key is how many hours a week and a year you can work.
This is a great tool to help you decide:
It lives at http://freelanceswitch.com/rates/ and it is currency agnostic. You just enter the unit of currency you want. I did a little example based on a young Julius, one that spends less than $100 a day on incidentals like beer and food.
You start with prosaic annoying expenses, like office rent, travel, software and insurance, to name a few.
Legal costs, accountant, office supplies, advertising, promotion, and Anything Else. We like that one!
Then it gets down to business: Personal Costs!
Being based in Sydney, the rent is 35,000 a year and daily expenses 25,000. I don’t want to save anything for retirement, since I will be half way into a pine box before I stop work! And another Anything Else: This time I’ve lumped 5000 in there.
Aha! How many hours can you ACTUALLY bill? This is the meat and potatoes. Being Julius, I want to work 4 days a week, have 4 weeks holiday a year, allow myself 5 sick days and add on a few public holidays. Thus I will be working 167 days a year. Arduous!
Now: How many hours per day will I work? I choose 6.5, and determine I can bill 100% of those hours. I think it is realistic – a friend of mine works 8 hours, and manages to bill 9.5. Go figure!
So here we go: 1086 billable hours per year. Plus I decree I want to accumulate 7500 in profit for the year. And the answer is:
I have to charge just 86.41 per hour, above my break even amount of 79.50.
But note: this tool does NOT calculate your TAX……
This is such as useful tool! Enjoy.
Published monthly since 1991, our famous AV industry magazine is free for download or pay for print. Subscribers also receive CX News, our free weekly email with the latest industry news and jobs.