A quick and easy to use guide to determining your hourly or project rate based on your revenue goals. This is bonus content created for the Business Bootcamp.

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How to calculate
your rate when
starting out
Business Bootcamp
Bonus Content

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Hourly Rate
Method
1

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A year from now, what do you
want your annual income to be as
a freelancer?

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Divide by 10.
This will be your target to hit
every month.

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Why 10, and not 12 months?
Subtract 1 month for vacation, and
1 month for non-billable hours
(networking, administrative tasks,
invoicing, etc…)

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= MGAG
10
AG = Annual Revenue Goal
MG = Monthly Revenue Goal

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So if your annual revenue goal is
to earn $100k, your monthly goal
will be $10k.

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Now, how many hours can you
realistically work per week? For
reference, full time employees
typically works 40 hours per week
(8 hours a day/5 days a week).

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= HRMG
Hx4
MG = Monthly Revenue Goal
HR = Hourly Rate

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In the previous question, it was
determined that your monthly goal
was $10k. If you can work 40
hours per week, your effective
hourly rate is: $63/hr. (round up).

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= $63/hr
$10,000
40hr. x4

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Search for jobs where people
get paid this hourly rate.
What are they?

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Project Rate
Method
2

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A year from now, what do you
want your annual income to be as
a solo business owner?

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Divide by 10.
This will be your target to hit
every month.

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Why 10, and not 12 months?
Subtract 1 month for vacation, and
1 month for non-billable hours
(sales, marketing, networking,
administrative tasks, client
correspondence, etc…)

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= MGAG
10
AG = Annual Revenue Goal
MG = Monthly Revenue Goal

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So if your annual revenue goal is
to earn $100k, your monthly goal
will be $10k.

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Now, how many projects can you
work on each month? This will
determine the average budget for
each project.

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= APRMG
P
MG = Monthly Revenue Goal
APR = Average Project Rate
P = Number of Projects Per Month

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In the previous question, it was
determined that your monthly goal
was $10k. If you can take on 4
projects per month, your average
project rate needs to be $2500.

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= $2500
$10,000
4 projects

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What kind of projects are people
accustomed to paying this
amount of money for?

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Comparison
3

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In both examples, the goal was to
earn $100k/yr.
By billing hourly, you would need to
work 160hrs each month at $63/hr.
Whereas billing project rates, you
would need to complete 4 projects
at an average project rate of $2500.

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In the case of using project rates
vs. hourly rates, if you created a
logo for $2500, but it took you
less than 40 hours to complete,
you are effectively earning more for
your time.

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What if you were really fast?
What would that look like?

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For comparison, if you completed
a logo in 10 hours, your time
would be worth $250/hr.
($2500/10).
Whereas if you billed hourly, you
would have earned $630
($63x10).

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Would you prefer to
bill hourly or per project?

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What if that same logo was
created for a large multi-
million dollar company?

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What if that logo was used
on products and
merchandising? Should the
fee be the same?

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Should you charge more for
the same work?
This is called Value Based
Pricing, where you price the
client and not the job.

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That’s a more complicated
explanation for another time.

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Want to learn more?
Consider enrolling in the
Business Bootcamp.
Class starts Sep 04

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Thank you,