For those of you that are relying on Freelancing to be your sole source of income, it’s important to know if you are paying yourself the right amount to cover all your day to day living expenses. For those of us that are supplementing family income, it would be wise to know exactly how much you are going to be able to contribute. Instead of looking over your figures and earnings at the end of a business year, there is a great tool on freelanceswitch.com that will calculate your optimal fees to ensure your costs are covered.

The calculator has a four part questionnaire, divided into relevant business costs, based on a yearly total. This allows you to factor your actual billable hours, your desired profit and the hourly rate you should be charging. As you calculate, keep in mind the market demand for your profession, the industry standards, your experience, and skill level.

I played with the calculator for a little bit, entering random numbers. One of my results told me I needed to be charging over 1,000 dollars per hour. Ah, in a perfect world……. Once I quit goofing around and got real, it was quite accurate and very helpful.

I recommend anyone starting out in the freelancing world use this calculator to avoid any surprises as your business gets rolling. It can be another way to solidify your goals and give you a clear target on what you want your business to become. For an already established freelancer, it is a good evaluator to check and see if you are on target with your initial goals for your business.

Once you’ve calculated your costs and discovered your recommended hourly rate, if you are just starting out, billing your clients a slightly lower rate for a limited time might give you the advantage of landing more clients. Factor how much of a break on the rate you can afford to give for a set amount of time and offer that to new clients. People shop around. People like to get a deal. People like to feel special. Knowing your numbers and how much play you have within them, will afford you the security of allowing a potential client to ‘dicker’ a bit on rates and fees without backing yourself into a non- profitable task.

Bottom line: Knowing your bottom line is a sure fire way to succeed financially with your freelancing enterprise. Numbers mean everything.