Interesting thread and it’s got me thinking … I’m not a freelancer yet, but I’d love to become one, so I’m dabbling in a feasibility study to satisfy my flirtations of starting a small sole trader freelance studio.
Please excuse my amateur attempt but it has sparked my interest to do this more indepth.
I ran some figures through an online calculator at FreelanceSwitch.com, that I found here … http://freelanceswitch.com/rates/
Remember your hourly rate should always take into account factors like market demand, industry standards, skill level and experience - things that unfortunately can’t be put into a calculator!
I’ve done some rather lame “guessdimates” on lots of things. I’ve also tried to base it on the US dollar. Can any Freelancers give feedback and offer corrections including examples of taxes paid in your country.
My results are as follows… (I will be correcting these figures from your feedback and future research)
Step 1 Calculate Your business Costs Based on One Full Year
A. How much is your annual Office Rent?
$13,000 A small office at $250 a week for 52 weeks.
B. How much do you spend on travel annually?
$8400 :Petrol at $100 a week, Car depreciation, Car Maintenance, Plane flight (based on 1-return flight a year), Accommodation (for me or a client)
C. How much do you spend each year on Computers, Furniture & Equipment?
$2000 :Hard drives, DVDs, new chair,
D. How much do you spend on Software?
$1000 : Developments & Research, trials & itunes apps.
E. How much do you spend each year on Communications - Mobile Phones, Telephone, Faxline, Internet?
$2600 :Mobile Phone plan charges, internet ISP, phone line
F. How much does your annual Insurance cost?
$2000 (guessing)
G. How much do you need to spend on Legal Fees?
$1000 (guessing)
H. How much do you need to spend on Accountancy Fees?
$600 (guess)
I. How much will your Office Supplies cost annually?
$1000 (guessing)
J. How much will you be spending on Advertising and Promotions
$2000
:Printing, Postage, site hosting & Ongoing site maintenance
K. How much will you be spending on Anything Else
$1000 :Entertainment, Meals, maintenance,
Your Total Business Costs: $28,854.00
Step 2: Calculate your Personal Costs
A. How much is your annual Rent / Mortgage payments?
$10,000 (guess)
B. What is your annual budget for Daily Expenses?
$50 (guess)
C. How much do you intend to save for your Retirement Account?
$10,000 per year (guess)
D. How much do you spend each year on Occasional Expenses?
(servicing your car, holidays and so on)
$3000
E. How much will you be spending on Anything Else
$2000
Your Total Personal Costs: $25,050 p/year
Step 3. How Many hours can you actually bill?
A. How many days a week do you work on average?
5 Days
B. How many days of vacation do you need annually?
20
C. How many sick and personal days do you need annually?
5
D. How many public and religious holidays?
11 days
You Will Be Working: 224 days p/year
How many hours do you work a day on average?
10 hours a day
Approximately what percentage of hours can you actually bill?
80 %
You Have a Total of: 1792 billable hours per year
Step 4 How much Profit/Savings Do You Want?
Enter a Dollar amount of Savings/Profit you’d like to make each year
$50,000
YOUR IDEAL HOURLY RATE IS $57.98 p/hour
YOUR BREAK EVEN-HOURLY RATE IS: $30.08 p/hr
This does not include capital costs:
Example of Capital Costs:
Computer, Software (ZBrush US$599, Microsoft Office Ultimate 2007 US$680, Accountacy software US$250, Photoshop or 3D software US$5000),
Wacom tablet, mobile phone, Desk phone, Stills Camera & tripod, printer/scanner, modem/router, stationary, Business cards, External Hard drives & mobile media, Car, Office furniture (Desk, chair, lights, vacuum, cleaning appliances, cupboards, filing cabinet, whiteboard, fridge) , Website, Logo, Letterhead, Legal setup fees.
Nobody is getting rich off of freelancing . Testure
Thanks in advance for your feedback and corrections.
UPHAM 