In this week's post we will talk about how to get our costs per hour, it is important to have this information because it allows us to give value to our time as freelancers, either as a designer or as a freelancer.
First we must take out our fixed costs , that is, the commitments we have:
- Electricity: RD$2,000.00
- Services: RD$6,000.00
- Transportation: RD$4,000.00
- Software: RD$1,800.00
- Equipment: RD$6,000.00
Total fixed costs: RD$19,800
In this part we include the design software that has a monthly fee , and the payment of the equipment (assuming it was a purchase in installments).
Let's add the personal expenses, in this they would be:
- Rent: RD$10,000.00
- Food: RD$15,000.00
- Others. RD$8,000.00
Total personal expenses: RD$33,000
That although we classify them as personal expenses, they are fixed expenses because we have to eat, have leisure time and pay rent.
In total our expenses give us a total of RD$52,800
We must take that monthly amount to an amount per day, this will depend on the time we are going to dedicate to it, either 20 days a month , or 10 days a month.
RD$52,800/20 days per month= RD$2,640.00 per day
RD$2,640.00/8 hours a day= RD$330 per hour.
We have a monthly cost of RD$330.00 per hour per day. If we wanted to add a margin of error to that, in case something unexpected happens to us.
We could add 50% to it, that is, RD$330.00 x 1.5= RD$495.00 . In other words, our price per hour would be RD$495.00.
Is this invariable?
No, because if we do jobs or projects that require more time, I could make a general quote.
That is, if the job requires 20 hours of work;
The calculation would be 20 hours x RD$495.00= RD$9,900.
You could calculate 10 hours x RD$495.00= RD$4950.00 and the other 10 hours at cost , that is, 10 hours x RD330.00= RD$3300.00 , that is, the total RD$7950.00
Do you want a practical explanation? You can watch our video here .
Image Source: https://www.bizneo.com/blog/cost-per-hour/