Working at home also means running your own business.
Even if you provide online services like research, data entry, customer service and others, being a virtual worker makes you a solopreneur.
Whether you embrace this truth or not, it’s a fact.
You see, in working at home, you get your own office equipment, you choose what schedule to follow and you also ensure your customers aka clients are satisfied with your work. This way it’s more possible for you to have a stable supply of projects or much better, ongoing and long-term clients.
You have a business so you need to treat it like it is. And like any other business, you have to set your rates.
How much you earn will depend entirely on how much you charge and how much you work.
Unfortunately, there’s no law stating set rates freelancers should follow.
It differs based on many factors.
When you’re just starting out, you may be tempted to set very low rates thinking this will make it easier to get clients but I suggest you ask these questions below and think it through thoroughly first. (Did you catch the tongue-twister there?)
Question #1. What are your current expenses?
Question #2. Are you the breadwinner or not?
Question #3. What’s your capacity and expertise?
A lot of other questions will come out as you think about the answers to these first 3 questions.
Do you pay rent? How much are your utility bills? Do you pay for insurance? Do you have kids? What are your skills set? Are you a college graduate? How many hours per day can you work? And so on and so forth.
This could be a long list depending on your situation, so give time to ponder about this.
For question #1, just make sure to only include the things you really need to pay for and buy for yourself and for your family when you begin with your list.
My point is, if you’re a solo parent, your decision will be different from that of a wahm or wahd with a husband or wife who’s also working. If you’re 50 to 65 years old your asking rates will also differ from those from the younger sector. If you live in the US your cost of living will differ from those who live in India.
Ok I’ll stop it there, you get my point.
Question #4. How valuable is your service?
Think of what value your service or services will give to your potential clients. Will it lighten their schedules? Help them earn more? Allow them to have some “me” time or better more family time?
You need to answer this question to see how your work may impact the business or project of your clients. It will give you a sense of pride and a sense of significance.
Just some food for your thoughts, you may only work for an hour or two for some clients but what you do may be the key operations that keep their businesses running. So think about that.
And question #5. What are the running global and local rates for those working at home?
Checking out global and local standards for the same freelance position you have will give you a “realistic” idea of how much to charge and whether to charge a fixed (per project) or hourly fee.
Knowing this will also help you get a clearer idea of the differences in the COLA or cost of living allowance in different countries which would explain why others charge more.
When you have your list of expenses, your understanding of your value and skills and the standard rates for those in the same industry, then you can go to sites with pay rate calculators and compute for the lowest and highest possible rate you can charge.
But all in all, the decision on whether to charge a $0.01 per hour or $100 per hour fee, is still up to you.
High and low rates have both advantages and disadvantages.
Low rates can get you hired really quickly but this also gives a lot of potential employers the impression that you will turn in poor quality work.
Charging very high rates on the other hand puts the pressure on you to make sure you turn in work equal to how much you’re going to be paid and more often at the earliest possible time.
If you have been following my blog, you’d know that I started my freelance career in oDesk. 3 years ago, having a starting rate of $2 per hour when you’re a Filipino worker is okay. For me, I felt it was good money already. When I became a full-time wahm, I worked for 7 to 15 hours per day, 7 days a week as much as possible, and it allowed me to have a monthly salary higher than what I was receiving in my regular office job.
But with the change in exchange rates of US dollar to peso, $2 per hour may not be satisfactory anymore now. That’s my opinion. You may think otherwise. So when friends ask me what’s a good starting rate, I ask them in return, what salary is reasonable for you? Reasonable for your way of living, your needs, and the type, amount, and quality of work you can offer? And I then move on to ask the questions above.
As you increase your professional value, you can and should adjust your rates.
Invest in yourself constantly. Learning more skills or becoming better at what you do will make you more confident to ask for higher rates from future or even current clients.
How do you feel about my suggestions? If you found this helpful, don’t hesitate to share it!