When pricing your professional services, work backwards from your target annual income and expenses to calculate a sound hourly rate.
Start with the salary you want to earn yearly. Break that down into monthly, then weekly, then hourly earnings based on billable hours. This gives a baseline hourly rate.
Factor in all ancillary time spent on prep, materials, travel for engagements. And account for overhead like internet, software, home office space used per hour.
Add up the hourly cost of your own time plus allocated expenses. This gives your true hourly breakeven rate to build pricing around. Don’t undervalue your time and operational costs.
Avoid leaving money on the table by scientifically working backwards from desired income to hourly expenditures. Price services accordingly.
