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Find out if you’re undercharging

By Kendra Gaines | Business | Oct 8, 2013

One of the hardest parts of starting your business or freelancing is trying to figure out what you should charge. Years ago after accepting pennies on the dollar for work, I decided I wanted to get really serious about freelancing. I wanted to dive in headfirst and never look back. But I didn’t know what to charge.

So, I did what any real professional would do and I Google’d it. There were countless blogs and articles that attempted to break pricing down and give me a good idea about what I should charge. It was all too much for me to process until I just decided to charge what I felt was good and increase steadily each month.

Pricing is a tough area for some of us, especially those of us who are passionate about the work. Many of us wouldn’t mind doing work for free just because we like it so much, but then, that’s irresponsible. So again, we’re left with the age old question, “What should I charge”?

 

YourRate.co

That’s where YourRate.co comes in. It’s a no-nonsense calculator that tells you how much you should charge. They ask 3 simple questions: how much do you want to make per month? How many hours a week do you want to work? And how many weeks do you want off a year? After inputting the info, you’ll get a figure that gives you your hourly rate.

The key to YourRate’s approach? It’s not about what the market will bare, it’s about what you’re worth.

Pro: It’s simple. It was created solely to figure out how much a freelancer should make an hour.

Cons: It doesn’t include expenses. And this is really minor, but be aware that you want to factor that type of thing into your desired income per month. It’s no biggie to include on your own, but it’s definitely something you’ll want to think about. However, the calculator does double your rate for some expenses such as taxes.

yourrate 

Here’s a picture of my ideals. I’m dreaming, but obviously you need to make sure these are figures you’re comfortable with and go from there. You also may want to see how this fits for you if you don’t do hourly and only do flat rates (like myself). The idea of this website is obviously to get you to value yourself more and charge more for what you desire. It’s all too easy to fall into the trap of charging what ‘the guy down the street’ charges; you’re not the guy down the street, if you’re not meeting your goals what are you doing?

 

Are you undercharging? How do you calculate your rate? Let us know in the comments.

Featured image/thumbnail, money image via Shutterstock.

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  • http://www.fasttrackcreations.com/blog Nikhil Malhotra

    Nice tool. I believe I am charging relavent at the moment. Hope to increase my rates with time and more experience..:)

  • http://MichaelMusgrove.com/ Michael Musgrove

    “The key to YourRate’s approach? It’s not about what the market will (sic)bare, it’s about what you’re worth.”

    It’s not about that whatsoever. Their approach is strictly based on how much you want to work and not and how much you dream of making. It has nothing to do with a person’s skills and talents, or reality, at all.

  • http://www.web123partners.com.au/ Bianca Board

    I fully agree with Leandro. I know it’s tempting to just go “ah yeah… I’m worth $x an hour, and this will take x hours.” To me your NEED to calculate your true cost (your time, your bills, any support etc) and had a hefty margin. 50% sounds about right. Great tool. Thanks for sharing.

  • http://www.webdesignerdepot.com/ Benjie — WebdesignerDepot

    You’re charging about 10% of the going rate. It’s normal that you’ll charge less as a student, because you want to build up your portfolio, but once you’re out of college there is no way you can survive on those rates.

    If you want good clients, you have to charge enough to be taken seriously.

    I’d suggest slowly increasing your rate every single month until you’re getting what you’re worth. Those clients that value you will stay with you, and those that just want cheap work can go elsewhere.

    • Keith Flynn

      Thank you for the reply, really appreciate it :-)

      • http://www.webdesignerdepot.com/ Benjie — WebdesignerDepot

        No problem, good luck!