Working as a freelancer means that you get to set your own prices. But those prices have to be both competitive to win the job and adequate to cover your expenses. It isnt as easy as it may sound.
Freelancers have the freedom to charge what they want for their services, and no matter what they quote, their clients are willing to pay to get a good job done. This is an ideal situation for a freelancer, as well as a myth that lures many people into becoming freelancers. And, it simply isnt true.
There are many freelancers working in every imaginable field and the competition is extremely fierce, especially for some specific fields. In this case, it is up to the freelancer to quote a price that covers his expenses and time, but is not too exorbitant. After all, you dont want to lose out on a lucrative contract simply because your bid is slightly higher than another freelancers, do you?
All freelancers have their own rates for different projects. These are calculated using different factors. The various factors that come into account when deciding your charges are:
Cost of resources
The most important resource that you charge for is your time. How much is your time worth? According the US work laws, the minimum working rate is $10 per hour. However, as a freelancer, you get to decide how much money your time is worth. Also, get an idea of the current going rate for your particular field, so that you can judge your rate. This is done by networking and visiting freelance sites.
Remember, youre paying a rent or a mortgage. You are also paying for electricity, water and other utilities. Hence, you need to incorporate these figures into your hourly rate of work.
How many expenses are you going to incur for the completion of the project? If it requires research, then you probably have to join a library, or buy a few books on the subject matter. Long distance interviews over the phone, travel expenses, or any petty costs that may need to be addressed during the course of the project should be included within the costing.
Most freelancing websites, which act as middlemen between the freelancer and the employer take a certain percentage from the freelancer as commission. This commission should be worked into your costing too.