One question comes up time and time again when discussing freelancing: ‘How much should I charge?’ It is a difficult one and is affected by many factors; your experience, competitors rates, overheads, etc. It is also something that you will need to constantly monitor, as you gain more experience and skills your hourly rate should reflect this.
Firstly do some research, there are many websites out there advertising freelance jobs and also many where you can create a profile to sell your services. Creative Pool (a jobs feed for which will be on MTB soon) and View Creatives amongst the most popular. Bookmark recruitment agency websites (many of them will deal in freelance and permanent positions) and see what payment level they advertise at (i.e. entry-level or senior management?). From here you will be able to assess how much other freelancers with similar skill sets or experience to yourself, charge.
I recently came across an interesting formula for working out hourly rates that may be of use – although I would stress the importance of checking out your competitors’ rates first. To start off decide a realistic target of how much you are looking to earn in a year. This should at least match your previous employment income. For example, say you are looking to earn at least £20,000 p.a. If you worked this out as an hourly rate for a 35 hour week over 52 weeks you would get just under £11 an hour.
However it is very unlikely you will be doing paid work 7 hours a day, 5 days a week. A great deal of your time will be taken up with job hunting, paperwork, chasing clients and other activities that you cannot charge for. Some weeks you may be doing paid work for 50 hours plus, others you may get nothing at all.
It’s best to envision that you will hopefully be doing paid work for about 21 hours (3 days) a week. So in our example you would therefore look to charge about £18 per hour. If you average less than 21 hours paid work you should have enough to get by and if you do more you will be earning more than your previous job.
This may sound high or cheeky but remember, as a freelancer you do not get paid holiday or sick days. Also your clients will not have the expensive costs of dealing with your national insurance, pension schemes, training and other HR issues that follow on from hiring a full-time employee.
If you charge by project rather than an hourly rate the same rules apply, give yourself an hourly rate and try to work out how long it will take you to complete the project. This can be difficult to judge but the more experience you get at it, the more accurate you will get.
The current economic climate may have you contemplating knocked down pricing to make sure you get work in. Whilst this may keep you busy in the short-term, it will no doubt cause you problems further down the line when you try to start charging your full rate. I would only consider reducing my rate if the project is hefty or an on-going appointment. After all, when times are tight it’s better to get a months work at a slightly reduced rate than odd days here and there at your full rate.
It can be a bit of a balancing act as pricing too high can put clients off, but pricing too low can be just as detrimental. You can guarantee that the clients who want you to work for next to nothing will be the ones you have to chase payment for months on end.
Russell Hall a freelance graphic designer based in the West Midlands, working for a variety of clients on mainly print based projects. Find out more at www.russelljhall.com.