Running the numbers and figuring out, according to a formula, what to charge clients is great in theory. But it’s also important to keep in mind what you are worth. Sometimes those numbers aren’t the same. There are a few things that contribute to your worth as a service provider: your amount of experience, your level of skill, and your competition.
How long you’ve been doing this thing you do means a lot. A rookie simply cannot charge the same as a 20-year veteran. The longer you do this, the more you should be able to charge.
But…skill plays a part in that. a 20-year veteran can suck at their job compared to a highly skilled rookie. See, it’s not simple, is it? And of course, it gets more complex still.
Even if your experience and skills support an hourly rate of $50, the market might determine a different rate. If you have 3 main competitors in town, and they are within a roughly comparable bubble of experience and skill, you can’t get away with charging much more than them. You’d have to do a lot more that they do — deliver more delight, offer faster turnarounds, manage more of the process for them, etc — in order to justify a premium price.
This doesn’t help you as much as you were hoping for, does it? Set a rate using simple math, then add in your experience, your skill levels and the pricing of those competing against you. Stir regularly and take risks. If pricing doesn’t drive sales, adjust the pricing.
Ultimately, you learn what to charge clients by charging them something and them listening to what happens next. It’s not easy, but it’s worth it.