Are you never sure what to charge for a job? Let an algorithm decide for you... (psst.. bookmark me)
This tool will help you figure out how much to quote for a job you will be contracting.
This tool will also help you figure out your negotiation thresholds for when they counter-offer.
An explanation of how the algorithm works is described at the end.
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What is the average cost-per-hour a contractor in your field charges?
$/hr (Note: Click here to find out!)
What is the absolute cheapest you are willing to work per hour?
$/hr (Note: Minimum wage [USA] is $7.25/hr [2021])
Does this job require you to spend money on supplies?
$ spent on materials
How many hours will this job take you?
hours
How many hours would this job take the average freelancer in your industry?
hours
What is the minimum salary you are aiming to earn per year freelancing?
$ per year
How many jobs per year will you land freelancing?
jobs
How many hours will the average job this year take you?
hours
How large is this client compared to the average client in this space?
Smallest
Small
Average
Large
Largest
Calculate your ideal Quote and Negotiation Thresholds:
How the algorithm works:
Before negotiating a quote, you must know the minimum you can do the job for. To figure this out you need to know your floor quote which is calculated by multiplying the hours it will take to do the job by the lowest $/hr salary you are willing to do labor for. There is also a soft-floor which is calculated by taking your target annual salary and dividing by the number of hours of work you will do in a year, adjusted by an efficiency ratio, which is how fast you can work compared to the average freelancer in your space (this form makes a generalized guess based on your hours-to-complete vs average hours-to-complete for this one project specifically, and extrapolating it out to all jobs you will do). With these two floor hourly wage rates, you can decide what values to not go below when negotiating. Next you need to determine the average quote price for the job which is based on how many hours it will take the average contractor to do the job and multiplying that by the average contractor hourly wage in this space. This number is then adjusted by a ratio based on the company size. In this form we use respective company size ratio scores of 0.667, 0.8, 1.0, 1.333, 2.0; but this will be different in practice. Then take the average quote and factor it by the company size ratio score to learn the starting quote price you will pitch, negotiations will then work down from there and you should never drop below your soft floor so that your target annual salary can be achieved, but if it is worth it to you to drop below the soft floor, you can then negotiate further but should never drop below your hard floor based on your minimum wage. Cost of supplies should also be accounted for and added to the final quote floors and thresholds after the ratios are factored.