I’ve seen a few posts circulating around about how to get started pricing yourself as a freelancer. I wanted to share the formula that I’ve used for over 3 years to make sure that I pay myself, can pay my business expenses, have a profitable design firm, as well as pay those pesky taxes (kidding!).
So here goes! Today, I’m going to show you how you can come up with the rate to craft a logo branding suite.
The formula that I use to find out how much to charge for a project has the following variables:
T = Time: how long a project will take to be completed
R = Rate: my hourly rate
P = Profit: how much money can be made AFTER covering expenses and labor
E = Expenses: things like salaries, software, coffee etc.
Here’s the formula (I’ll break it down further):
(T x R) x 1.P x 1.E = My project rate.
A lot of people get stuck on what and how much to charge on a per hourly basis. I say… charge what you want… AFTER you’ve done the following:
- Looked at what the industry charges
- Looked at what you’ve charged in the past
- Looked at what your skills and capabilities are
Now, you’ve gotten your hourly rate, a rate that YOU are happy with. Your hourly rate is $35. It’s time to figure out how long a project will take to complete, including revisions, communication time etc. This is why it’s super important to track how much time it takes for you to finish a project. I use the free Chrome plugin toggl.
You look over at your time tracker – or past projects – and see that it takes you 8 hours, on average, to complete a logo branding suite. So, the labor cost of your project would be: $35 x 8 = $280. YOU NEVER SHARE THIS NUMBER WITH ANYONE ESPECIALLY CLIENTS! This is the cost for *you* to only do the work and get this project done. This number is sacred and also essential to know. It’s from this number that you can see when/if it makes sense to discount your services and have a sale, calculate what your profit rates are and much more. We’re in business, so we have expenses, salaries and a coffee habit to fund…
This post is getting long, so I’m going to share the rest of this sometime later.
If my posts help you, or if you’d like more clarity on freelancing, entrepreneurship, branding or web design, please follow me on Instagram here: www.instagram.com/christinagwira.
Got questions? Leave ’em in the comments section and I’ll answer them!