What to charge.
WHY IT IS THE HARDEST DECISION
There is no reference point, and underpricing is the default.
WHAT TO CALCULATE FIRST
Your annual requirement: living costs, business costs, tax, pension or savings, and a margin.
WHAT TO ESTABLISH
Realistic billable days per year.
WHAT REDUCES THEM
Weekends and holidays Time finding work Administration Illness Gaps between engagements Learning
WHY IT IS FAR FEWER THAN PEOPLE ASSUME
Most freelancers bill well under half the working year.
WHAT TO DIVIDE
Annual requirement by realistic billable days.
WHAT THAT GIVES
Your minimum day rate.
WHY MINIMUM
It covers your requirement and nothing more.
WHAT TO ADD
Margin for reinvestment and for bad periods.
WHAT ELSE DETERMINES RATE
The value of the work to the client What comparable providers charge Your demonstrable experience How specialised the work is
WHY VALUE MATTERS MORE THAN COST
Clients pay for the outcome, not for your hours.
WHAT TO AVOID
Quoting the lowest figure you would accept Competing on price Discounting to win a first engagement
WHY DISCOUNTING FIRST ENGAGEMENTS FAILS
The rate becomes the reference for everything after.
WHAT TO DO INSTEAD
Charge your rate and offer a defined smaller piece of work.
WHAT TO REVIEW
Your rate, at least annually.
WHY
Costs rise, and rates that never move fall in real terms.
