|But I need it, I really need it.|
Part one – calculating a notional day rate, aka what you need to charge to survive.
Step 1) What do you need to earn?Did you really go freelance to become rich? Really? Most people I know have gone freelance to take back control of their lives, to be able to make their own decisions, to be there for their families and generally to feel like they are living a more balanced and healthier life. And in that sense we are all very successful, though none of us ‘rich’. So when you are working out what you need to earn, if you really want to be a freelancer, I doubt if it’s anything like what you used to earn. Do a monthly budget of what you can cope with, (you’ll be surprised freelance currency goes along way).
This gives you your base line figure of what you need to clear after tax. For easy maths' sake lets say that’s a £1,500 a month so £18,000 a year. So how does that convert to a day rate?
Step 2) How many days in the year do you have to earn it?Answer: it’s not 365, though this is where you start.
Days in the year 365
Less main public holidays 5
Less weekends 104 (don’t actually schedule to work weekends)
Less holidays/family/emergency days 25
Less sick/jet lag/ hangover days 12 ( just being realistic)
Days available to work 220 ( standard industry figure)
Now assume that 50% of that time you are not doing client work, either because there just isn't any, or because you are working but not being ‘paid’ for it, eg admin, networking, training, research, marketing, pitching, preparing materials etc. That leaves 110 days to cover your budget, plus tax plus expenses.
Step 3) Not all that money is yours you know.Tax and expenses.
Step 4) Calculating the notional day rateSo now just look at how much you need in total, and divide it by client days. In our model that’s
£25,200 /110 days = £229/day notional day rate.