Going freelance in training or HR – how much to charge
With organisations laying staff off, HR and training are no exception to potential job losses. This leaves many to think about going freelance. Knowing how much to charge is one challenge. Often people in the consulting and freelance world undervalue their services, and equally, purchasers are increasingly unrealistic about what they expect to pay.
Some time ago I was asked to present to a local CIPD group about ‘going freelance’ and in the course of that preparation, it highlighted some important facts that all freelancers should be aware of.
When setting your daily rate, you need to look at the wider picture rather than just a recovery of your ‘old salary’
Let’s do some simple maths…
There are 52 weeks a year – you will want 3-4 weeks leave – that leaves 48 working weeks.
You need to account for admin – tax returns, marketing etc, this will leave you with 2-3 days to work a week – so that is 48*3= 144 working days. Marketing effort should not be underestimated – this included all unpaid time doing proposals, visits etc.
Now – rather than charge ‘by the hour’ and all of the timekeeping required to prove it – charge by the 1/2 or full day. Your market space and the way you deliver your services will dictate if this is possible or not.
So if you want an income of UP TO:
- 100k – that is 100,000/144 or 695 a day
- 50k – 350 a day
- 25k – that is 175 a day
If you are going to charge by the hour, remember that you need to cover other time you cannot sell – for example, a one-hour meeting means you cannot sell that day as a full day. Also invoicing for 1 hour of work takes the same effort as invoicing to 10 days.. so the cost of that must be taken into account.
If you are looking to do hourly advice/ guidance, then charge for a package – say 50 hours over a year and invoice monthly. then all you need to do is keep a record of time used. The client can always add time if they need it. This is better for you and them in terms of cash-flow. professionals will charge upwards of £100 (UKP) per hour – this is only £800 per day – don’t undercut too much (putting the competition into a war on price will just undermine the industry and make your business unsustainable – look what happened in the IT training sector – encourage people to buy on quality and service) – value yourself and what you can offer.
You get the idea – remember of course that you will now need to pay for any training you need, equipment, internet connections etc – so these can easily mount up – do not undersell your self – set your price and be proud of it!
first published Jan 2008 Updated January 2014 broken linked deleted April 2018