How to Set Your Prices

Deciding how much to charge for your services is one of the hardest things to figure out when you start your own business. It took me a while to feel confident in the quotes I gave to prospective clients. I would always figure out my estimate, and then knock it down a few hundred dollars. The more I wanted to work with a client, the longer it took me to get the numbers together, and the longer I held my breath waiting for them to give me the OK. When I was working as an Art Director, we decided to sub out some of our different companies’ work. I can tell you that big agencies never bat an eyelash when it comes to quoting their, many times, ridiculous prices. I was freelancing on the side and thought, I am a chump, I need to up my prices!

There are different ways to price your work based on hourly or value. I think either way you want to do it, you have to first have a basic hourly number to start from. To get your base hourly fee that you need to make a living, this is what you do.

1. Take the number of hours you want to work per week [30] multiplied by weeks in the year minus vacation [50] = [1500] your number of billable hours per year.

2. Take the amount of money it takes for you to live a year [$50,000] + 30% for taxes [$15,000] = $65,000. This is your desired salary

3. Divide your desired salary [$65,000] by your yearly billable hours [1500] = $42 + 20% buffer = $50 per hour

Now that you know what you have to make, you can test and adjust. If you are just starting out, use this number to make your quotes. When you have done a few jobs and you are feeling more confident and experienced, up your rate. Remember that you offer a service that people need, and even though there are always those that want the cheapest option, they are not for you. Good clients are always willing to pay for good work.