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Free-lance: how do you fix your rates

Break your price or too inflating can cost you. To remain credible in the face to the customer and earn correctly your life, evaluate the fair price of your pro

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Free-lance: how do you fix your rates

Break your price or too inflating can cost you. To remain credible in the face to the customer and earn correctly your life, evaluate the fair price of your products. Excerpts from "Working solo", published by The Express.

"It is a concern very particular, because it is easy to mix his market value and individual value (I am both), note Michel Paysant, communications consultant and president of the Observatory of the solos. This is part, I believe, of learning to free-lance. It is easy to be tempted to break the price of it bites the fingers then. We lose a market because it is too expensive, it bites also fingers. But after a few mistakes, you learn quickly! You also learn to detect his mistakes and to correct them quickly, that is the advantage of not being hired "for life", we can restore the situation to the next contact!"

Olivier Pauvarel, consultant in social management and management of change, sums this approach up in one sentence: "we need to find a balance between the value of our service on the market and the value we give it."

No false modesty. Pascale Théobald, coach leaders, proposed "not to have any false modesty about the fees: a freelancer is a business, and we work to earn a living. For example: if the customer considers the price too high, why not offer him a discount if he gives us a volume of more important work? It must also ensure not to sell at too low a price, under threat of discredit. If one is expert in a domain, it is necessary to sell at a price expert".

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READ ALSO >> How to develop a budget

Set your hourly rate

This is a rite of passage to determine the amount of your rates.

• Begin by determining the monthly net salary that you would like to win, taking as a basis the starting salary that you would earn performing the same tasks for an employer.

• Multiply then the base salary by 2. You plan, and the social and tax charges you'll incur.

• Add 10 % to the amount thus obtained. These 10 % correspond to the compensation of your future days of inactivity and leave.

• Add to the amount determined the average amount of your operating expenses monthly costs (office rental, communications, documentation, electricity, etc). You get the turnover to attain to pay you the monthly salary determined at the beginning of this calculation.

• finally, divide this figure by the average hours worked in the month (as an indication, note that the average legal full-time is fixed at 169 hours).

Example: For a salary hoped to 3,000 euros net per month.

3 000 x 2 = 6 000

+ 10 % => 6 600

+ 200 => 6 800 € monthly turnover

6 800 / 140 hours = hourly rate of 49 € HT/ hour.

be Careful not to confuse the price excluding tax, and the VAT-inclusive price (all taxes included), that is to say, your hourly rate + 19,6 % (VAT amount).

To determine the rate to offer to your customer, it only remains to multiply this hourly rate by the number of hours estimated for the services that you want to sell him.

accept missions under-paid?

When the work is scarce, the temptation is great to accept missions paid below its usual rates? Is it a risk to take ?

Yes and no. "Yes, we can accept a mission under-paid," says Isabelle Harlé, coach and consultant, if it is a proposal focused on the skills that we are trying to develop. Otherwise, it is better to refuse or to obtain to be paid at a normal rate."

In all conscience.

"we need to be aware of what we're doing," advises Olivier Pauvarel. If one agrees to be paid below its usual rates, it must be for a good reason : the prestige of the client, for example. This approach can also be transparent to the client : ?I accept your proposal of tariff even if it is lower than my usual rates because I know that I will find such an interest to perform this service for you.? But attention, this should not become a habit : if one does not have other solutions that work at prices that are too low, there is danger.

Should we break the price when it begins?

The free-lance "junior" may be tempted to practice rates systematically lower than those of the market, to compensate by reducing the price for his lack of experience. But is this a correct calculation ?

To make himself known. "It's a bit inevitable, recognizes Isabelle Harlé, since what counts in the beginning it is to know, and be listed. And you can't get paid as a senior when one has no experience. It is also possible to propose to a client pay us 30% less expensive, provided that, in exchange, to talk to us in his or her professional network."

A trap. Olivier Pauvarel, consultant in social management and management of change, does not share this opinion : "It is necessary to adjust market prices (which one can take knowledge through its networks, discussion lists, professional, etc), because if it offers really under-valued, then it will be very difficult to bring them up to a level that is cost-effective."

How to calculate your profit margin?

Your profit margin is an important indicator of the profitability of your business. Know the calculate and predict is essential to determine at what price you will sell a service. But attention, this margin can vary depending on the services. "There is no margin ideal, precise, Sophie Roger, a lawyer. It all depends on the type of activity of the professional, and motivations: some of my clients margent to 50 %, other at 30 %, and they are all very happy with their profit margin."

Here is the basic formula to calculate a margin:

profit Margin = net sales of goods - purchase cost HT of the goods

The purchase cost is obtained by adding the costs of purchases of goods the costs of transport, storage, handling, insurance, etc

• the case of The provision of services. If your activity involves the provision of intellectual services, you do not really "stocks", since you don't sell "commodity" hardware. In this case, the calculation of the commercial margin is as follows :

profit Margin = net sales of services - purchase cost + of these benefits

Read our complete file

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The purchase cost is obtained by adding to the purchases involved in these benefits, current expenses, that you constantly have to move forward. To make this calculation, you therefore need to begin by estimating the cost of a day of work, all expenses included costs of office rental, communications, documentation, electricity, etc) including your remuneration day. Then multiply this cost by the day by the number of days necessary for the execution of the service concerned.

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