I tried freelancer.com for the first time over the weekend. I hired username amiablewriter to write a blogpost for me. I gave very little direction and asked for a 300 to 500 word blog post on how to determine your rate as an independent consultant. The result follows. Not bad for $20. It’s not really my voice, though, so not sure this will be the right approach for me. What do you think?
How to Determine What to Charge per Hour as an Independent Consultant
Whether you are an independent consultant, a freelancer, or a professional worker, sometimes you face the big question of what to charge your client per hour? This question pops up because your charges will go a long way to determine your cumulative earnings. You neither want to charge your customers more nor charge them less. So, how do you go about it without them cheating you or you cheating them? Below are simple steps to put you through:
Determine your worth
Know the quality of service you will be providing and balance it between the market factors and the business costs. Before you make your quotations, consider the following factors:
- The market rate regarding your work and location.
- Your experience, efficiency, and skill.
- The rate to cover your costs.
Ascertain the number of working hours
Let’s assume you work for 5 hours in a day, and your project will last for a week. There are 5 working days in a week. This data implies that you will work for (5*5) = 25 hours to complete the project.
Determine the amount you want to earn on the project
Determine the amount you want to make on the project based on the quality of service. The nature of your consultancy is a crucial factor that determines what to earn. Ensure you balance it with the market factor.
Determine your hourly rate
Your hourly rate is the total amount to be earned on the project divided by the total number hours. Let’s assume you will be receiving $1000. Then your charge is 1000/25= $40 per hour.
Determine your consulting rate
Your consulting rate is the addition of your hourly rate and cushion. Cushion directly takes care of your expenses such as self-employment task and the likes. It varies from 30- 50 percent of your hourly rate. Let’s assume cushion is 50 percent. Then you have 50/100 *$40=$20. Your consulting rate is now $40 + $20=$60 per hour.
Make use of the above tips so that you can perfectly determine what to charge your clients per hour. These steps give a quick view of how you can determine your hourly rate. In determining your hourly rate, ensure you are conversant with the market rate and keep your goals in mind. Good luck!