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Tips and advice on calculating rates and organizing a freelance life.
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Freelancing
Time Balance Money
What's happening?
Cost of an employeeCalculating rates
Real-life advice (lots of it)
How much money?
How much money?
The same as an employee
Somewhat more, as I carry the biz risk
An employee's income
24000 / year
before income tax and health insurance.
An employee's income
24000 / year
24000 / 12 = 2000 / month
An employee's income
24000 / year
24000 / 12 = 2000 / month
2000 / 173 = 11,56 / hour
An employee's cost
24000 / year
24000 / 12 = 2000 / month
2000 / 173 = 11,56 / hour
Average hours per month!Good number to know!
An employee's cost
24000 / year
24000 / 12 = 2000 / month
2000 / 173 = 11,56 / hour
… is this actually true?
An employee's cost
She has holidays. 4 weeks / year!
An employee's cost
She has holidays. 4 weeks / year!
24000 / year
24000 / 11 = 2181 / month
2181 / 173 = 12,61 / hour
An employee's cost
She is sick sometimes.
An employee's cost
She is sick. 4 in 100 days.
An employee's cost
She is sick. 4 in 100 days.
2181 / (173 – 4%) = 12,61 / hour
2181 / 166 = 13,13 / hour
An employee's cost
She gets pension benefits.
500/month.
2181 + 500 / 166 = 16,15 / hour
An employee's cost
She gets pension benefits.
500/month.
2681 / 166 = 16,15 / hour
An employee's cost
She has an office. And a computer.
An employee's cost
She has an office. And a computer.
200/month.
(2681 + 200) / 166 = 17,35 / hour
An employee's cost
She has an office. And a computer.
200/month.
(2881) / 166 = 17,35 / hour
An employee's cost
She has one job.
An employee's cost
She has one job.
Her manager organizes work for her.
An employee's cost
She has one job.
Her manager organizes work for her.
Now, let's think like a freelancer.
A freelancer's rate
She has to find work to do.
No-one does it for her.
She spends one third of her time on this.
A freelancer's rate
She spends one third of her time on this.
(2881) / (111) = 25,95 / hour
A freelancer's rate
She doesn't always find work.
So sometimes she doesn't know what to do.
This happens one in ten days.
A freelancer's rate
She sits around one in ten days.
2881 / (166-55-17) = 30,64
A freelancer's rate
She has to spend time on administration.
A freelancer's rate
She has to spend time on administration.
Another half day in a week.
A freelancer's rate
She has to spend time on administration.
Another half day in a week.
2881 / (166-55-17-17) = 37,41
Your rate?
What do you need to live?
Cost for living, communication, transport, health, pension, holidays, clothes, notebook, leisure.
Whoaa. 40-80 €/hr !!!My customer doesn't understand.
My customer says others are cheaper.
My customer doesn't want to spend that much money.
My customer doesn't understand the complexity of my work.
Dealing with „Whoaa!!“Sell your work under price
Don't get the job
Build a product
Automate parts of your process
Prices
Econ 101:
„A function of supply and demand“
Supply: You.
Demand: Your customer.
Communicate well
Be polite
Don't be late
Be emphatic
Smile often
Manage Expectations
Tell the client what's in scope (and what isn't!)
If you do extra work: Talk about it!
If you work for free: Make it explicit!
Freelancing
> 50% of freelancers work 40-50 h/week
20% work > 50h/week
40% of freelancers have 10-20 days vacation a year
Typical week (40h)
20h client work
10h administration
6h Meetups, Networking, Akquisition
4h learn new things, techniques
Work vs. Life
aim for office hours
dont work in your freetime
dont work in bed
have a tablet for private browsing
Plan your day
make yourself a timetable
plan your week before the weekend
plan your day the evening before
recheck your planning after lunch
Focus
Do one thing at a time
have silent hours without calls, facebook, twitter…
Avoid ASAP – it will screw up your day
Invest time
… in your workflows
… to try new software
… script repeating tasks
Care for yourself
Eat well
Sleep enough
Do some sports
Take breaks
Take free days
Plan ahead!
plan your money – have a reserve for 3 months
plan your projects with milestones
plan realistically– clients might need more time than you think– you might need more time than you think
Specialize
Have a strong suit
Have one thing in your portfolio you know better than anyone else
Write / talk about it!
Pro Tips at the end
Develop a technique to do boring stuf
Get to know your work-style
Build a network for your work with other freelancers
Why work under price?
Because you learn.
Make it explicit.
Don't pay for work. Ever.
Enjoy LifeYou'll earn less at first.
You'll live better.
You'll work for yourself.
Enjoy life.
