It is completely understandable to be nervous about venturing out on your own. It is reasonable to expect to earn at least the same amount of money that you are currently. Here are a few things you should consider when setting your price.1) Set a reasonable goal as to how much you would like to earn. You may want to check out salary.com to find comparative wages.
2) Don't forget about Uncle Sam. You will be responsible for paying your own taxes. A good rule of thumb is to add a factor of 15% to your salary.
3) Include your overhead expenses. These are expenses such as rent, utilities, phone, advertising, etc...
4) Figure out your billable hours for the year. You don't want to simply multiply 40 hrs per week x 52 week in a year. Include holidays, sick days, and vacation. Don't forget to include non-billable hours. This will be time you spend hunting for new clients or doing paperwork.
5) Add up your operating costs and divide by billable hours. This will give you your estimated hourly rate.
Almost done...
6) Factor in a profit margin. Somewhere betweeen 10% and 30%. This will come in handy if you ever choose to expand or get a bank loan. It also doesn't hurt to build a little money up in the bank in case business slows down at all.
Calculating your hourly rate this way is important if you want your business to succeed because it is based on your actual costs and needs. While you will see others with lower hourly rates, dont be scared into competing on price. Sell yourself and the service you are offering.
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