During a recent walk around the park, I thought about my present work load and how much I was charging for it. Was I charging the right amount for the tasks, the industry, the market, and my skill level?
Most of us are accustomed to a salary based on a 40-hour work week. When doing freelance gigs or owning your own business, however, you may not work a 40-hour week. So if you’re a sole proprietor, how do you figure out how to obtain the salary you want for yourself? How do you make enough to also help the business grow (assuming you want it to)?
If you’re a fast worker, or if much of your time is spent on administrative tasks related to running the business, you may have to figure out your prices by the project instead of by the hour. An inquiry into a full-time position afforded me the opportunity to apply this theory. The position was to do pretty much exactly what I do now, but full-time, working for someone else, without having to sell myself because a sales team completely separate from the creative team brought in the business. I won’t give the real numbers, but let’s say the position paid $37,000 per year and that I would have worked on projects for an average of 8 clients per week. I might have been working on 5 or more projects for each client. Here’s the math:
37,000/52 weeks per year = 711.54 per week
711.54/8 clients per week = 88.94 per client
711.54/40 (8 clients per week, 5 projects per client) = 17.78
How did I compare? During that particular week, my average invoice was very close to the above amount per client. I concluded that I might be underpricing my services, but that I wasn’t overworking myself. At least, not during the week I was thinking about this.
Check out the salaries of the technicians, the (lucky) people who get paid to practice the same craft that you practice, but who do it while employed by someone else. Then also consider your own skill level, your market, and your profit margin. If you’re overpriced, you should have a good reason to justify it. And if you’re under, make it a selling point.
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