Apparently the event planning world in Ohio is a very small world indeed. Since making it known that I was leaving my job, I have gotten call after call from fellow event planners, colleagues and my general network. There are rumors flying around that I have been (gasp!) laid off or worse, fired (yeah right – they begged me to stay). Everyone wants to know what I will be doing and why I decided to leave. Once they find out the real story the next question is: What are your rates?
Now I was expecting some rumble about my decision, but I was not expecting this. People actually want to meet with me, give me advice and most importantly they want to hire me. So now I am left with setting my rates, and fast. I already have several meetings set up next week for potential projects. Ah! I thought this would take a while. But work is work and I want to take advantage of this buzz while I can.
So all day, instead of doing actual paid work, I have been researching rates. There is a lot of contradictory information out there on what to charge. Some people charge by the type of work, while others charge a flat rate per hour. I have decided to go with a flat rate per hour. I think it will make it easier for me come tax time and easier for my clients to understand.
So this is what I have decided to base my rates on:
• What I was making as my salary, broken down into an hourly rate for 50 weeks a year (factoring in 2 weeks of vacation).
• My estimated expenses such as, my taxes, my benefits, equipment, location, etc.
• What other people are charging for similar services.
• A price range of pure profit that I would like to make.
• The fact that most freelancers only work 23 billable hours a week – the rest is spent marketing, bookkeeping and the general duties of running a business.
That gave me my base rate. Next, I put it into an equation to see what my estimated yearly income would be. Here is the equation I used to get my estimated yearly income:
(Billable hours a week) (my hourly rate) (50 working weeks a year) = yearly income
Wow! I can only hope to make that much! Which means I must start asking for these rates and pushing my skills and services! What do you do to figure out your rates? Do you charge per hour, or per project?