A very common question that most freelance trainers and coaches ask. It’s particularly confusing when you first start out.
The problem is that until you’ve been in this business for a while, you’ve got nothing to base a daily rate on. Often what happens is that you think back to what it was like in your last job. What salary you had. You had this salary every month regardless of whether you went off sick or took your allocated holiday.
So it’s easy to see why people may start by working out their daily rate based on their last paycheck by dividing the monthly pay by 5 days and then 8 hours.
This is NOT the place to start. There are many more factors to consider when running your own business. Here are a few to consider:
- Think in terms of the total revenue you want to have coming into your business each year. Is it £30,000, £40,000, £50,000 or £100,000+.
- Your total revenue is not your salary. Your total revenue needs to include the other elements of doing your business as well as your salary. This includes the time spent on developing, book-keeping, travelling, net-working, administration, phone calls – and every thing else that you do to run an efficient business. This all adds up and needs to be included.
- Have a conversation over the phone with a potential client first, before driving to a meeting. This way, you will gauge what they are looking for and have the opportunity to ask how much they have in their training budget for the training. This cuts out time wasters and helps you to ‘qualify’ the prospect.
- Take a reality check when quoting for work. How much time has already gone into this so far? Did you have an initial hour on the phone? Did you drive and meet up? Did you need to spend time doing an initial training needs analysis? Did you have to prepare the workbooks? Were there other costs that you’ve incurred? You need to cover all the costs of running your business.
So, take a reality check today on how you are pricing your daily rate. If its far too low, then increase it in line with what you want.