Ask yourself following questions:

1. How much money do you want to make on this project?

2. How many hours do you want to work?

Now all you need to is Divide these two numbers. Its that simple, you now have your hourly rate.

FORMULA 3

Use following formula if you are interested on how to set rates for your entire business.

Add up all costs to run business on an annual basis (including profits) by annual hours (2,080). This will give to you your pay rate.

1. Salaries + Overhead = Annual Costs

2. Divide Annual Costs by Annual Hours

So For example, if following is true:

1. Salaries = $60,000

2. Overhead = $50,000

3. Annual Hours = 2,080

Then this is how you figure out hourly rate:

200,000 / 2,080 = $52

FORMULA 4 - PRICING BY ORDER FORM

This method is order form method. The reason I call it this is because you use an order form to add up all ingredients of project. This would be how you figure out how much to charge for your work. I don't recommend using this method unless you are only designing simple sites that all have same basic ingredients. Otherwise, there are too many variables to use an order form. Here is an example of an order form:

======================================================= Purchase Order # Customer # Company Name Domain Name Your Name Address State Zip Code Phone Number Fax Number Email Address

=======================================================

# of Pages

=======================================================

# of Photographs

=======================================================

# of Illustrations

=======================================================

# Custom-made Illustrations

=======================================================

# Custom-made Animation

=======================================================

# Forms

=======================================================

# Pages of Flash

=======================================================

# of Scripts (What Language)

=======================================================

Other

======================================================= | | TOTAL | | | | =======================================================

FORMULA 5 - ESTIMATION BY PROJECT

Most clients are going to want to hear how much entire project is going to cost. Even if you have an hourly rate already, probably this isn't going to be acceptable to your future clients. It takes practice but you are going to need to learn how to break projects into individual tasks in order to estimate how long project is going to take. Make sure to find out what responsibilities client expects you to take care of. If client expects you to do everything, then take this into account. If this is case break up project into following phases in your mind:

======================================================= TASKS # Hours ======================================================= Administrative

=======================================================

Purchase Server / Domain

=======================================================

Planning / Flow Charting

=======================================================

Storyboarding / Mockups

=======================================================

Optimize Images

=======================================================

HTML / Programming

=======================================================

Create Prototype

=======================================================

Testing

=======================================================

Make Site Live

======================================================= | | TOTAL | | | | =======================================================

Now Visualize how many hours you feel each stage of your project is going to take. Add up all of these hours.

Multiply your hourly rate (figured out from one of above formulas) by total estimated number of hours for project (from above). This amount would be how much you bid on project.

So For example, if following is true:

1. Hourly Rate = $30

2. Total Estimated Project Hours = 50

Then this is how you figure out how much to bid on a project:

$30 x 50 = $1,500

Make sure that your client is very clear on what scope of project is. You should write a clear contract to make sure that outline of project is written down in clear terms, otherwise client may take advantage of you.

The bottom line to your freelance business is that you want to make a good living. If your hourly rate seems too low then raise your rate till you feel comfortable with it. If several clients are way too eager to hire you as a freelancer, rethinking your hourly rate might be a good idea. On other hand, if clients are very interested in you at first and then stop communicating with you after they hear what your hourly rate is, then you need to lower your rates. In other words, feel customers out to see whether your fees are correct or not.

If you have determined that your fees are too high then you might need to lower your overhead in order to lower your fees. Try cutting some of your unnecessary expenses in order to make ends meet. When you make change over to freelancing, sometimes there is a little suffering at first. Don't worry; it doesn't usually last long if you know how to save when times are good.

Good Luck.

Article submitted by http://www.Allfreelancework.com - 1000s of freelance jobs, articles, and resources. Allfreelance is also host of creative portfolios.

This is where power of numbers comes in. Don't try and reinvent wheel. Jump in and join success by following those who came before you.

6--- Take time to learn how to use Ebay. Even if your plan doesn't entail becoming a powerseller, by putting up a few auctions, you can direct traffic to your site and increase sales. You can learn everything you need and more from ebooks offered at this site:

http://www.makemoneyonline.us

I had wanted to learn Ebay but kept putting it off. To many other things to do. Because of a planned move, and necessity of getting rid of valuable stuff, I started researching ebooks I had about how to go about putting up an auction.

I sold more in one month, July 2002, than I had from Feb. through June, using Ebay. I also received my first affiliate commissions, several of them, from both my geocities and domain name websites that same month. It was definitely worth time invested for my business. It can be a great traffic building for your business.

Email me at ebayqtn@gentlyused4kids.com if you have questions on Ebay auctions. I will help through emails any way I can.

7--- Don't be afraid to do a press release. I had read many articles about how they could bring you big traffic. I also read how difficult they were to get read. I worried about too much publicity, invading my privacy.

I researched and studied how to do it, and took plunge. It worked. The very first time. I got my press released published at PRWeb.com

http://www.prweb.com/releases/2002/12/prweb52227.php

8--- Write it down when you think about it. Too often, I have written an article in my mind. Then it never seems to make it to paper. Being a single mom of three, I am busy. I have found by talking into a digital recorder or tape recorder, I can be more productive. Use that waiting time. This article was generated in my mind while waiting at a bus stop with my almost 2 year old. (He was strapped safely in his stroller with a snack, of course :o)

This article promised 7 tips--- I give you 10. These are my bonus tips.

9-- Always give more than you promise. Everyone loves freebies. Put something for free on your site. It will generate more traffic. Then incorporate that freebie to generate sales. Writing articles is a great way to do this.

10-- Promote free articles. After you have written several on same topic, you can create a free ebook. Offer it as a tool for webmasters to customize and give away for free. You can offer this customization for free or charge a fee for it. Put affiliate links in your ebook articles to promote backend sales.

If I had known all these things 6 months ago, my business would be bringing in more sales everyday. Learn from my mistakes so you can profit faster.