Are You a Self-Employed Professional? Learn How to Set Your Fees

Many people decide they don't line 9-5 jobs or are tired of having a boss behind them all the time, so they decide to provide their professional services in a self-employed manner. This doesn't work very well with a lot of people because being self employed is often more stressful and more work than being a regular employee, but you also get some benefits.

Many self-employed professionals, especially new ones, have trouble deciding the fees they are going to charge for their services, but the reality is that choosing your fees is easier than most people think. There are two main components; your value and some math.

Let's start with the math. The first step is to decide the amount of money you want to earn and the number of weeks each year you want to take off. For instance let's say you want to earn $75,000 per ear and you want to take a total of four weeks off; two in the winter holidays and two during summer, so you'll have a total of 48 weeks that you will be working.

Next you have to work at least one day a week in growing your business. Don't be mistaken; this is not working in whatever your business is, this time it to work in developing plans, or finding ways that can help you grow your business. Once you have decided this day sum the total number of hours you want to work each week. Let's say you want to work 6 hours a day 5 days a week in your business, so you'll be working a total of 30 hrs per week.

Once you have this number, it is time to multiply the number of hours a week times the number of weeks per year; in this case 30 x 48 = 1440. Now divide your desired yearly income by the number of hours you want to work and this will give your hourly rate. 75,000/1,440 = $52. This is a good estimate of how much you should be charging. Then you need to consult the price of similar services around your area and decide if you can raise or lower a bit your prices.

The next ingredient is the value. This term is more conceptual than the simple math exercise we did before but is equally important. You need o understand the value of the service you provide to your clients because many people under value their services for fear that they will lose their clients. By your services you may be saving thousands of dollars or the valuable time of your clients and they will be happy to pay more if you offer high quality.