Chief
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Ahhh… the age old question - what should my rate be?
My two basic tenants are - what is my time worth and what are my skills truly worth in the market you are in (if working with local clients).
Since you work full time, are you hourly or salaried.? If you’re salaried, I’d take your salary and divide by 2,080 (that’s the average work hours in a year). Then, I’d add 25-30% to that.
Example, you make $100k a year, dividing by 2080 gets you roughly $48/hr at your full time job. Since this is a side hustle, you are using your free time to work these extra hours. That’s time away from family, friends, leisure, development, most times sleep. I value my free time more than my work time, so adding the extra 25-30% is making an effort to justify the extra work. With this example, this would put your rate at $60-$62/hr. I would just round up and go between $60-65/hour. This should be your minimum.
For maximum… trust your gut and compare to other freelancers in your market or your area of expertise. I have nearly 20 years of experience, and while I have a minimum rate, I increased it because even my minimum rate was a little on the low side for my area and average expectations.
Full time freelancing is a different situation as you have to account for taxes, benefits, time off etc. That doesn’t sound like your situation, but if you are…. You are taking your minimum rate and essentially doubling it.
Of course, a lot depends on other freelancers out there. You’ll be shocked to see the amount of people who don’t value their time, expertise and self worth when it comes to pricing themselves. Many drastically underprice themselves. Not only does that undervalue their work… but it undervalues everyone’s work in that space.
I’m in the video production world, and I freelance on the side, and it shocking seeing how low some of the freelance rates are in my metro area. There’s something to be said by trying to price yourself to get your foot in the door, it’s another thing where years of low rates sets the expectations to clients that they can get premium work for cheap.
Also, you could be dealing with off shore freelancers who are thrilled at charging $15-20/hr vs your $60. Combine in budgets being cut and an over reliance on Generative AI, and that is factoring into low ball bids. I lost a several year, consistent client this year to both issues - budget cuts… and using AI to fill in work that I did. 6-7 years ago, I did over $50k a year in freelance. I’ll be lucky to be over $5k this year.
All this being said, I’m not changing my rate. I know what my time is worth. I know what my experience calls for, and I’m still lower than video production people in LA or NYC. Unfortunately I live in the middle of the country so an LA or NYC rate wouldn’t fly.
Just be confident. Ask yourself how much time you REALLY want to spend on freelance availability. Are you looking for 10 hours a week, or 20+? How much money do you REALLY want to make, enough to constantly supplement your income, pay off some bills, save for vacation, save up for a new car or a toy, a new computer, etc.
There is no right or wrong answer but thinking about what your time is worth and if that rate would work with the clients you are trying to gain.
Also consider project rate vs hourly. Sure… you could quote someone a 20 hour job and price accordingly. Sometimes clients want to see what an overall project is going to cost them. And if you can accurately quote them how many hours a project will take, this protects you if the project takes you 12 hours instead of the 10 hours you quoted at the hourly rate. If you do it as a project rate, and they agree…. You know that you HAVE to finish the project within 20 hours otherwise you start losing money. If you finish it say in 12-14 hours, you’re ahead of the game. They’re happy because you delivered on their project and you’re happy because you delivered a project that they are happy with UNDER your projected time.
Best of luck!
Chief
Wow you’re amazing!!! Thanks for the detailed response 🙏🏼
I am following as curious as well.
I look at what the pay is for similar W2 jobs and figure out what that works out to on an hourly basis. Then I tack more onto it because freelance work doesn't come with any of the benefits W2 jobs offer. If you're freelancing through a platform like UpWork, throw all that out and see what other designers are charging since you'll be competing with them for business and don't want to price yourself out.
Chief
Thank you! That’s a good approach that’s easy