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Active Member
jeroberts
Posts: 8
Registered: ‎03-30-2008
Message 1 of 17 (8,487 Views)

Freelance Rate?

8487 Views, 16 Replies
03-30-2008 05:05 PM
I've been working in a salaried position for a little over 4 years, but I'll be having a baby soon and plan to work from home. A business owner has offered me an excellent freelance opportunity, but we have not yet discussed rates. He says he will purchase my CAD software (AutoCad Architecture) for me, and the license would belong to me to use for whatever purposes I want. He says he would like to offer my services to his peers, who are equally desperate for CAD drafting services. From his perspective even after buying the software it will be cheaper than hiring a full-time salaried employee, since his workload is seasonal.

I'm not sure how to determine my rate. I live in upstate NY, but the CAD work would be nationwide. I have a B.S. in architecture, 4 years professional work experience (but over 10 years CAD experience), and have worked on several high-profile projects, including a nationally televised sporting event.

If I were to double my current hourly rate as some people recommend, my freelance rate would be around $46. I'm not sure if that is high or low. I'm also wondering if it would be prudent to have a minimum price, since due to the nature of the work it would take less and less time to complete the projects (I could re-use previous work). Any insight would be appreciated!
*Ian A. White
Message 2 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 02:44 AM in reply to: jeroberts
On Mon, 31 Mar 2008 00:05:31 +0000, Architecture_Chick <> wrote:

>I'm not sure how to determine my rate. I live in upstate NY, but the CAD work would be nationwide. I have a B.S. in architecture, 4 years professional work experience (but over 10 years CAD experience), and have worked on several high-profile projects, including a nationally televised sporting event.

Take a look at the contract rate calculator on my web site.

The initial figures are for Australia, but you can change the inputs.

It gives you a starting point and makes you consider the inputs.

--

Regards,

Ian A. White, CPEng.

| /| / WAI Engineering
| /_| / Sydney 2000
|/ |/ Australia

www.wai.com.au

mailto:ianwhite@wai.com.au

callto://waiwhite on Skype
*Dean Saadallah
Message 3 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 05:27 AM in reply to: jeroberts
How much did you get paid previously per hour?
How much do you want to get paid per hour now?

Keeping in mind you will also have to pay employee and employer taxes too,
you should also consult with a Tax professional in your area about how much
more income you need to cover that.

Then, if an option, Health Care, Life and professional Insurance/Liability
costs.

Add then all up, split into an hourly rate, there you go.

Don't skip on the professional Tax advise: most states and counties offer
free or low cost advise locally for folks like yourself.

--
Dean Saadallah
http://LTisACAD.blogspot.com
Add-on products for LT
http://www.pendean.com/lt
--
*Mason
Message 4 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 10:35 AM in reply to: jeroberts
I don't know how the cost of living compares between where we live, but when
I had my own business my goal was to make at least $100/hr. That can be a
tough pill for most to swallow, so I gave my price per job, not per hour.
In reality, most of the time I was right about $75/hr. My highest degree is
an A.S. from a community collge - you should be able to reasonably ask for a
higher rate than $46/hr.

Given the information in your post, there are 2 things I would take into
much consideration before making the decision whether to freelance or not:

- With the nature of the work being seasonal, you will need something in
place to carry you financially through the times when you have no work.

- With the business owner fronting the $$ for the CAD program, I would think
you would be on retainer for him. That is, his project will take precedence
over other projects you have taken on. I would make sure that both of your
expectations are the same as much as possible before going into it.
Remember to discuss who is responsible to pay consultant fees, and adjust
your rates accordingly.

Also, the nature of the types of projects you will be doing needs to be
taken into consideration. Residential, commercial, etc. Are you at liberty
to divulge that information?

Sorry this is all the time I have for now. Feel free to ask any other
questions. Oh, and congrats on the baby! .-)


wrote in message
news:5889616@discussion.autodesk.com...
I've been working in a salaried position for a little over 4 years, but I'll
be having a baby soon and plan to work from home. A business owner has
offered me an excellent freelance opportunity, but we have not yet discussed
rates. He says he will purchase my CAD software (AutoCad Architecture) for
me, and the license would belong to me to use for whatever purposes I want.
He says he would like to offer my services to his peers, who are equally
desperate for CAD drafting services. From his perspective even after buying
the software it will be cheaper than hiring a full-time salaried employee,
since his workload is seasonal.

I'm not sure how to determine my rate. I live in upstate NY, but the CAD
work would be nationwide. I have a B.S. in architecture, 4 years
professional work experience (but over 10 years CAD experience), and have
worked on several high-profile projects, including a nationally televised
sporting event.

If I were to double my current hourly rate as some people recommend, my
freelance rate would be around $46. I'm not sure if that is high or low.
I'm also wondering if it would be prudent to have a minimum price, since due
to the nature of the work it would take less and less time to complete the
projects (I could re-use previous work). Any insight would be appreciated!
Distinguished Contributor
kevinpchandler
Posts: 572
Registered: ‎01-30-2008
Message 5 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 10:40 AM in reply to: jeroberts
Consider how much you want to make, too.

Factor in the other items above and:
You won't be 100% billable. You weren't before, but now you won't get paid for it.

Remember your other expenses, like office space, furniture, Internet, supplies, deadbeat clients.
Even for a home office. you'll need a fairly clear deliniation to get the tax deductions.

You're setting up a business, so if you haven't already, check home office business sources. There are many things that will jack your rate up (if you don't want to eat them, which you may have to do when you're starting out).

As suggested above, get some tax/business advice. (While there, ask them for accounting software recommendations.)
Do your research and compile your questions first.
One thing I'm wondering is:
Since I'm getting software for free, is it true that it's not deductible and is it considered compensation (which is taxable)?

Be sure to get expenses (copies, postage, travel) in your agreements? You have your agreements set up? If not, check AIA.

Good luck to you.
*Evan Larson
Message 6 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 11:21 AM in reply to: jeroberts
You may be able to work it backwards. I have no idea about your area but if
for example you can be billed out to a client for $65 an hour he should be
able to pay you say $50 and have over 20% profit. I would guess though with
your location and haveing a degree and experince you should be billed at
closer to $85-$95 per hour so you should be able to charge close to $70 and
he still turns a nice profit.

Now, given the software purchase etc. you may want to vary that some with
this particular employer. Around here if we can get a half decent contract
drafter in the mid $40's per hour we can make money off them all day long.
You also need to consider those who offer you repeat work vs one here one
there. Your main problem is going to be steady work. The contract drafters
around here are either swimming in work or doing nothing, rarely steady
work.

The problem is when business is good you don't want to run out and hire a
new person and then have to fire them 6 months later if things dry up. But
when things do dry up it is the contract people that are the first to go, so
it is very fickle. Consider this when setting your fee. You need to charge
enough to live on and for your clients you are still way cheaper than a full
time staff person.

If you use the double the hourly rate calc. factor in vacation, insurance,
taxes ..... etc. because you cost your employer a lot more than you might
think. You need to make more than double if you do not have a steady job.

The other method you mention is a fixed price for the work. This is common
in our area and frankly gives you the opportunity to make more money. They
can take your bill and add say 25% and as long as they pull a profit on you
they will be happy, don't give it away.

My $1.50 worth of free advice.

Evan


wrote in message
news:5889616@discussion.autodesk.com...
I've been working in a salaried position for a little over 4 years, but I'll
be having a baby soon and plan to work from home. A business owner has
offered me an excellent freelance opportunity, but we have not yet discussed
rates. He says he will purchase my CAD software (AutoCad Architecture) for
me, and the license would belong to me to use for whatever purposes I want.
He says he would like to offer my services to his peers, who are equally
desperate for CAD drafting services. From his perspective even after buying
the software it will be cheaper than hiring a full-time salaried employee,
since his workload is seasonal.

I'm not sure how to determine my rate. I live in upstate NY, but the CAD
work would be nationwide. I have a B.S. in architecture, 4 years
professional work experience (but over 10 years CAD experience), and have
worked on several high-profile projects, including a nationally televised
sporting event.

If I were to double my current hourly rate as some people recommend, my
freelance rate would be around $46. I'm not sure if that is high or low.
I'm also wondering if it would be prudent to have a minimum price, since due
to the nature of the work it would take less and less time to complete the
projects (I could re-use previous work). Any insight would be appreciated!
Active Member
jeroberts
Posts: 8
Registered: ‎03-30-2008
Message 7 of 17 (8,487 Views)

Re: Freelance Rate?

03-31-2008 03:04 PM in reply to: jeroberts
Thanks everyone for your replies - you've definitely given me a lot to think about.

My husband has a full time salaried position with benefits, so we're really not relying on my income. He doesn't make quite enough that we don't need the extra money, but the seasonal aspect of my potential job won't hurt us. The businessman I'm in talks with has many connections as well, so perhaps it won't turn out to be seasonal if his connections lead to additonal work. I think he's afraid of losing me, so he's trying to help make this worth my trouble.

As far as the CAD purchase goes, I really have no alternative but to accept his offer (if I want to freelance). I was considering financing it myself, but just found out I will need to purchase a new car within the next couple of months, so I won't have the funds. While we didn't discuss whether his work would take priority, he did emphasize that the CAD expense is very minor to him. He sees it as an investment that will pay for itself very quickly (nice drawings will win him much more business).

I don't want to divulge my particular location, but the cost of living is low, and my current salary of about $46,000 is on the upper end of the spectrum for a CAD operator. The freelance work I would be doing is commercial, vaguely architectural. I don't want to short-change myself, but I do see an opportunity to offer very competitive rates. Of course I would jack them up a bit if I were doing design work rather than strictly drafting/rendering.

The tax issue really has me confused, so I will definitely seek out some specific advice on that!
*Ian A. White
Message 8 of 17 (8,488 Views)

Re: Freelance Rate?

04-01-2008 02:09 AM in reply to: jeroberts
On Mon, 31 Mar 2008 22:04:01 +0000, Architecture_Chick <> wrote:

>Thanks everyone for your replies - you've definitely given me a lot to think about.

>I don't want to divulge my particular location, but the cost of living is low, and my current salary of about $46,000 is on the upper end of the spectrum for a CAD operator. The freelance work I would be doing is commercial, vaguely architectural. I don't want to short-change myself, but I do see an opportunity to offer very competitive rates. Of course I would jack them up a bit if I were doing design work rather than strictly drafting/rendering.

Going by the factors in my contract rate calculator, for an equivalent
salary of $46,000 (i.e. what you would get after business expenses and
overheads (not including tax) have been met as this is what you have
now), a long term contract rate where you are effectively working a
full week every week as you do now, would see an hourly rate of
something like $55 to $60 per hour. If the work is only sporadic where
you will have un billable time of around 25% of the working week, your
rate would be something like $70 to $72.50 per hour. Any local goods
and services taxes are on top of this.

This will vary to some degree depending on what your fixed operating
costs (Other Costs -Budgeted) are, however if you decide to charge
less (for whatever reason), you have to realise that your effective
annual salary will be less than the $46,000 you are currently on based
on the fixed operating costs (Other Costs - Budgeted) in the
calculator.

Don't sell yourself short. A low price is not always all ways an
attractive factor for a client. It can mean a "cheap and nasty job".
In the same way a job priced too high can also be a turn off. Both can
indicate you do not really know what the job entails. No client will
object to a fair rate. After all they know what their costs would be
if they employed someone full time. The difference in using you as an
outside contractor is that they do not have that commitment for every
working minute. This is what they would be paying someone they had
employed as a salaried employee even if there was nothing for them to
do. With an outside contractor they simply send you home or don't give
you any work. That is where their savings are realised.

--

Regards,

Ian A. White, CPEng.

| /| / WAI Engineering
| /_| / Sydney 2000
|/ |/ Australia

www.wai.com.au

mailto:ianwhite@wai.com.au

callto://waiwhite on Skype
Active Member
jeroberts
Posts: 8
Registered: ‎03-30-2008
Message 9 of 17 (8,488 Views)

Re: Freelance Rate?

04-01-2008 04:58 AM in reply to: jeroberts
Thank you for taking the time to work that out... I visited your site and used the calculator - great resource! I really appreciate the insight.
Active Member
jeroberts
Posts: 8
Registered: ‎03-30-2008
Message 10 of 17 (8,488 Views)

Re: Freelance Rate?

04-01-2008 05:06 AM in reply to: jeroberts
I just thought of something... in my calculations, should I take into account the employer's offer to front the money for my software and adjust my rates downward (for this particular client)? Perhaps I'm already doing this though, since I've left the software off my expense list. Theoretically it would be fair (though not necessary) to charge other clients even more, correct?
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