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Thread: Self-employment rate calculator

  1. #1
    Cyburbian JimPlans's avatar
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    Self-employment rate calculator

    I found this on a blog today, and I thought it was pretty good. It's an hourly rate calculator from something called FreelanceSwitch. While it's intended for craft-type people, it's generic enough for anyone to use:

    http://freelanceswitch.com/rates/

    I put in some WAGs for things like insurance and office rent and got an hourly rate of $110. Then I realized I didn't even include health insurance, which brought it up to $122 per hour. Then I realized that the chart doesn't seem to take taxes into account, which brough it up to about $135 per hour. And that's to make a pretty unimpressive $60,000 or so per year. This is more than I charged per hour in the public sector, but OTOH there are no economies of scale for one person in office space, software, etc. (after all, a full ESRI ArcInfo license is over $10,000).

    Also, the blog had a link to a decision graphic called http://shouldiworkforfree.com/. Should you work for free? Probably not, unless it's for your mom.

  2. #2
    Cyburbian Mud Princess's avatar
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    Although it is mainly aimed at graphic designers, website developers, etc., FreelanceSwitch is a great resource for those of us who are self-employed or managing consultant firms.

  3. #3
    Cyburbian Cardinal's avatar
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    Right, not very accurate, but interesting. I should be billing about $100 per hour, which is what I like to charge. Attorneys pay $150 per hour. I would like to boost retirement, profit, marketing, and a couple other items, though. My preferred approach would be to keep my rates the same and get more billable work.
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  4. #4
    Cyburbian JimPlans's avatar
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    Quote Originally posted by Cardinal View post
    Right, not very accurate, but interesting. I should be billing about $100 per hour, which is what I like to charge. Attorneys pay $150 per hour. I would like to boost retirement, profit, marketing, and a couple other items, though. My preferred approach would be to keep my rates the same and get more billable work.
    Cardinal, what do you think your maximally efficienct utilization rate is? I always assume that, on my own, I'd have to spend about half of my time marketing and performing administrative work, even with a full pipeline of work. This assumes a 60-80 hour workweek (30-40 hours of billable work, 30-40 hours everything else).

  5. #5
    Cyburbian Cardinal's avatar
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    Quote Originally posted by JimPlans View post
    Cardinal, what do you think your maximally efficienct utilization rate is? I always assume that, on my own, I'd have to spend about half of my time marketing and performing administrative work, even with a full pipeline of work. This assumes a 60-80 hour workweek (30-40 hours of billable work, 30-40 hours everything else).
    I think you are about right on this. Marketing takes up a significant amount of time, both writing proposals and doing all of the other tasks to ensure I receive the RFP in the first place.
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  6. #6
    Cyburbian ColoGI's avatar
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    Quote Originally posted by JimPlans View post
    Cardinal, what do you think your maximally efficienct utilization rate is? I always assume that, on my own, I'd have to spend about half of my time marketing and performing administrative work, even with a full pipeline of work. This assumes a 60-80 hour workweek (30-40 hours of billable work, 30-40 hours everything else).
    This, IMHO, encapsulates what should be said to folks who ask this board about going solo. Should be bookmarked for reference when replying in the future.

  7. #7
    Cyburbian
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    I've been a urban design consultant for 25 years and what you charge per hour is based upon some many factors that its very difficult to plug it into any type of equation. How do you want to take home? What are your fixed costs? What things would you like to have but can live without? What will the economy bear at any given time? Expectations on clients part about your overhead and how much they believe you should be charging in a down economy. Its fairly common today for clients to ask for due diligence work to be done for free because they aren't getting anything out of it either.

    Right now for most consultants, particularly smaller firms and independents, its pretty much working to pay the bills and stay alive. There is very little work and with a whole new crop of layoffs in the market, the hourly has been driven down substantially. Supply substantially strips demand right now. I am charging one-half of what I did in 2007. I've closed my office and work from my home. I now only have my mobile phone and threw out the fax machine and expensive phone number years ago. I market through email, social networks and just calling up clients every once a while just to see how they are doing.

    What you can charge today has very little to do with what you want to make and more with what the market will bear. If you want to be a consultant, plan on getting a part time job that will provide a small, but steady income that will pay household bills. Its all about survival today.

  8. #8
    Cyburbian Cardinal's avatar
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    Quote Originally posted by smccutchan1 View post
    ...What you can charge today has very little to do with what you want to make and more with what the market will bear. If you want to be a consultant, plan on getting a part time job that will provide a small, but steady income that will pay household bills. Its all about survival today.
    Very true. More often now, I am seeing cities state what they have available for their project, as well as what they expect from the consultant. They realize they can demand more for less money than just a few years ago.
    Anyone want to adopt a dog?

  9. #9
    Cyburbian Tarf's avatar
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    Quote Originally posted by Cardinal View post
    Very true. More often now, I am seeing cities state what they have available for their project, as well as what they expect from the consultant. They realize they can demand more for less money than just a few years ago.
    ...all the while, they have more time to spend reviewing (and commenting) on submittals. So we're charging less for doing more work...

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