How do you set a day rate to ensure you’re not overcharging or offering your services too cheaply? We’ve got the answer.
The Freelancer Club caters to a range of creative talent all of whom offer a variety of services at very different rates.
What’s your day rate?
It’s a question that often causes freelancers to pause, sweat, gulp and stutter. Not a great way to fill your potential client with confidence. Knowing your day rate not only allows your business to flourish but also gives you the confidence to deliver your magic number without feeling embarrassed.
A quick comparison of your competitors’ freelance rates is a good place to start but thorough research is also required to determine your day rate. Remember there are a number of factors to consider from location to service. Londoners will most likely have higher overheads and thus be more expensive than a freelancer living in a more cost effective location.
The time it takes to deliver your services is also important to consider. Photographers, for example, may have a day rate that covers a shoot but doesn’t take into account the post production work.
To help give you a starting figure, there’s a simple formula you can use to see what you should be charging to make the business (and your lifestyle) work.
Firstly, identify your annual expenditure, desired salary and your chargeable working hours.
For example, if it costs you £5,000 a year to run your business, you want to earn £30,000 a year and you can work 20 billable hours in a week (don’t forget the admin, travel and other constraints on your time that you cannot charge for). Let’s assume you want to take the odd holiday too and work for 45 weeks in the year. Here’s a version of a simple sum to beat a conventional freelance rates calculator:
Salary required: £30,000 + £5,000 = £35,000
Hours you can invoice in a year: 20 x 45 = 900 hours
Hourly rate: £35,000 / 900 = £40
When you set your desired salary, remember to be realistic. Clients will want to see a good level of experience and a solid portfolio to justify higher freelance rates. It’s always better to be more conservative when you set your figures. There are always unknown entities that you can’t account for such as injuries or even weather. Once you do hit the sweetspot of the perfect day rate, hold your head up high and confidently deliver the figure to your clients. Not only will this help with the sale but it will also show that you know your worth.
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