Plan billable hours and overheads before quoting client work. This guide offers a practical starting point, not a substitute for specialist advice.
1. Choose an annual income goal
Begin with income needed after realistic unpaid time and business obligations, then include taxes and savings through your own budget.
2. List annual overheads
Include software, equipment, insurance, accounting, marketing and replacement costs. One-off spending can be spread over a reasonable useful life.
3. Estimate actual billable hours
A 40-hour work week does not produce 40 billable hours. Allow time for proposals, administration, customer support, holidays and training.
4. Calculate your rate floor
Divide the annual income goal plus overheads by projected annual billable hours. A quote may still need a risk and scope allowance.
5. Quote the whole project
Clarify deliverables, rounds of revision, payment schedule and exclusions. Review your estimated time against actual time after each project.
Put it into practice
Use the tools below with numbers from your own business, then revise your assumptions against real results. Keep a record of the decisions you make and why.