How much should I charge?

Hi,

I am not sure what I should charge, I hope I could get some guidelines from you but am still not sure. I don’t want to price myself out of the market but at the same time, do not want to under price myself and have the company take advantage 8 the reason I left in the first place).

Dear _____,

First of all, thank you for ordering the book. I appreciate it, and yes, would like to help you in any way I can.

The best answer for how much to charge is on page 35 of the book. In other words, think how much you want to earn each year and work backwards.

There's a simple formula for calculating your hourly rate. For example:

CALCULATING YOUR
HOURLY RATE
Target annual salary:
$100,000
48 work weeks per year
(4 weeks of vacation)
25 billable hours/week
(5 billable hours per 8-
hour workday)
48 weeks x 25 hours =
1200 billable hours per
year
$100,000 ÷ 1200 =
$83/hour rate

The key thing to remember is that you are not going to work every week of the year (especially living in beautiful Switzerland). And you are not going to be able to "bill" every hour of every day. There's what I call "slippage". Time spent on phone calls with clients or prospects. Chores you must do, such as billing, routine paperwork, etc.

You'll be working very efficiently if you can bill for 60-75 percent of your time.

Once you have your target hourly billing rate, you simply estimate the cost of projects for clients by how many hours you think it will take you to complete them. Don't forget to "pad" each project with an extra 2-3 hours to account for unexpected changes, etc.

Here's another reason I recommend picking a target annual income and using this formula to set your hourly rate. You want to earn an income that makes YOU happy and gives you the freedom to live the life you want. Otherwise, what's the point of taking on the risk and uncertainties of being on your own?

Here's one more tip: If you're just getting started or re-establishing yourself in the marketplace after an absence of time, you might want to start with a more modest hourly rate, build up your clientele, and see what kinds of projects you're getting. Then, after a year or so and assuming business is solid, you can gradually inch up your hourly rate by $5 or $10 per hour to add significantly to your income without losing clients. It's a subtle change for them but a big jump for you. As one expert puts it -- you give yourself a raise.

I hope this helps and please feel free to email me with any other questions as time goes on.

Oh, and one more thing. If you haven't already signed up for my free ezine, please do so at www.outsourcing-yourself.com You'll get a few more bonus articles plus ongoing tips and great resources for building your busines.

All the best for success,

Barnaby Kalan
www.outsourcing-yourself.com