Here’s how Luke Mysse, Founder of CROSSGRAIN and speaker at this year’s Creative Freelancer Conference, comes up with prices. He shared this in his week-long series (about a nightmare project he was involved in) on the CFC blog.
My effective hourly rate is based on a simple equation of Expenses (including my salary) + Profit (every hourly rate should include it) divided by the number hours I want to work each month. Mine happens to be about 20 hours a week billable.
The above equation gives me my hourly rate. From there I figure out my job costs: __ hours X my rate + Job Costs (anything outsourced) = Basement price (meaning I can’t go any lower than this price without losing money). Once I have that basement price I price the project out based on the value of what I’m doing which could change depending on client, project type, my mood (ha).
See Luke’s latest post, Lesson 2: One Point of Contact.
If you want to get down and dirty with money, check out my new book, The Creative Professional’s Guide to Money. (There’s a free sample chapter.)
How does this compare to your pricing?