How To Calculate Your Rate

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BUSINESSBOOTCAMP TWOTHOUSAND 18
How to calculate
your rate when
starting out
Business Bootcamp
Bonus Content

Hourly Rate 
Method
1

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

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

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

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

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

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).

= HRMG
Hx4
HR = Hourly Rate

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).

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

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

Project Rate 
Method
2

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

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…)

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

= APRMG
P
APR = Average Project Rate
P = Number of Projects Per Month

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.

= $2500
$10,000
4 projects

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

Comparison
3

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.

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.

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

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).

Would you prefer to 
bill hourly or per project?

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

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

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

That’s a more complicated
explanation for another time.

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

Thank you,

How To Calculate Your Rate

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