From AolJobs, Jill Jacinto offers recommendations for things to do and things not to do if you are considering freelancing. Among other good advice, she recommends that you do your research and understand the industry rates. Knowing the market is critical to pricing your work competitively. In addition, she writes:
“But another great way to make more money is to go freelance. As an added benefit, it’s also a beneficial way to practice your passion. Here are some tips for making it happen.
Do your research. You might have shared one of your recent projects online and received a query asking for your freelance services. Before dipping your toe into the freelance pond, do your homework. Seek out the industry rates for your skillset, level, geographic area and field. Ask members how are part of industry-related groups what the rates are, or connect with fellow freelancers and see if they would be open to sharing their rates with you. Freelance sites like Elance or TaskRabbit will also grant you with access to the going rate. They’ll also be a great place to look for work once you’re ready.
Know your worth. Now that you know what the going rates are, you need to decide how to price accordingly and see if you can afford to freelance full-time. If you’re thinking of making the jump to full-time freelance, understand what the variance would be from your current full-time job. Full-time freelancers should also use an equation to figure out what to charge their clients per hour.
What is your yearly salary? This is the salary you receive before taxes. You should also know the full-time rates of freelancers in your industry.
- Annual billable hours: Do you know the hours you spend working per year? Start with 365 days, remove any vacation/sick days, weekends, and the time that you’d spend doing administrative tasks (filing, billing, etc). Multiply that by the number of hours you would work per day.
- Yearly profits: This should be 10 to 15 percent of your annual salary.
- Yearly expenses: Items that you no longer get if you are a freelancer. This includes an office, health insurance, 401(k)/401(k) match, paid vacation, etc.
Grab a calculator and input the following freelancer equation: your annual salary + your annual expenses + annual profits / by annual billable work hours = your hourly rate
Be business savvy. Do you go hourly or charge by the project? Many freelancers debate this question before accepting a new gig. The best way to decide this is to have a chat with your client regarding expectations and make sure you set clear ones…”
Read the full story at Do’s and Don’ts of Freelancing.