Recently I found myself in a couple of conversations with friends who left their jobs to venture out on their own (mostly as designers and coders). The one thing they all did — they charged too little. Which is baffling — as they had good jobs at well established companies who paid them very decent wages. And yet: Somehow they talked themselves into thinking they are worth less now that they are out there on their own.
Let’s do some math: Say you made $75,000 per year in your old job. Add to that at least 50% overhead your employer has to pay for insurance, office space and the rest of the whole shebang and you end up costing your company about $115,000.
Assuming there are about 104 weekend days, 10 legal bank holidays and you have 15 days of vacation in a year — that leaves you with about 235 working days. Which brings you to a day rate of about $500 (that’s the $500 your employer would pay for you if you were permanently employed).
Those $500 is the minimum you are worth for a prospective client.
As you are adding value to your client you can slap at least some margin on that number — say 50% (which is pretty common for these kinds of jobs — if not more). That brings our day rate to $750. Now: Why would you want to charge anything less than that?
Don’t sell yourself short.