Home Business - Setting Your Hourly Rates - Continued

Page 2 of 3    Back

Home Business Basics Categories:

Setting Your Hourly Rates | Pricing Your Projects
How to Quote a Freelance Project | Should You Take the Job | Naming Your Home Business
Legal Considerations for Your Home Business

MONTHLY OVERHEAD:

Rent
Income Taxes (Use 45% of your annual salary)
Utilities
Insurance
Office Supplies
Marketing
Postage and Shipping
Telephone
Accounting / Legal
Travel
Office Furniture
Dues & Memberships
Licenses
Health Plan / Medical Insurance
Disability Insurance
Retirement Savings
Multiply by 12 to get yearly Overhead

Now you will need to figure out how much of a profit you wish to make. I recommend between 10% and 20%.

Follow these steps to figure out what your hourly rate should be.

1. Add Salary and Overhead Together
2. Multiply Total By Profit Margin (10% - 20%)
3. Add Total (1) and Total (2) Together
4. Divide Total (3) by Billable Hours (2,000)

For example, if the following is true:

1. Salary = $30,000
2. Billable Hours = 2,000
3. Profit Margin = 20%
4. Overhead = $15,000

Then this is how you figure out the hourly rate:

1. $30,000 + $15,000 = $45,000
2. $45,000 X 20% = $9,000
3. $45,000 + $9,000 = $54,000
4. $54,000 / 2,000 = $27 / hour

<===============================================>
http://www.Allfreelancework.com - 1000s of freelance jobs, articles, and resources.
<===============================================>