This transcript was generated from the episode audio and may contain minor errors.
[Music]
How can you set the right hourly rate for your side hustle? In this episode, we're gonna help a social media manager set a fair hourly rate. That is one that is fair, not just to her customers or clients, but fair to her. I want you to be able to have a profitable side hustle or a small business, maybe even eventually work your way out of a job. And pricing your services is just one of the toughest challenges for new freelancers and side hustlers of all kinds.
I hear it all the time. How do I decide what to price? And we look at that question from various perspectives. But today I wanna focus on a specific person, this social media manager, helping her figure out the right hourly rate. This is gonna connect really closely with the weekend workshop series that we've been doing, which comes out once a week.
I think we're on day 13 or day 14 of that series now, one day a week for the whole year. So let's consider some strategies for calculating your rate, staying competitive, and building a pricing model that grows with your experience, because as you get better and more experienced, I think you should get paid more. All right, that's today's topic, the detailed question and discussion coming right up. [Music]
Hi, I'm Morgan. I recently started a side hustle offering social media management for small businesses.
I love the work, but I'm struggling to figure out what my hourly rate should be. I don't wanna undercharge, but I also worry about pricing myself out of the market. How do you figure out a fair hourly rate that reflects your skills and experience while staying competitive? And should I charge the same for every client or adjust based on their budget or project size? - All right, Morgan.
As I said, we were discussing this a bit in the weekend workshop series, but let's talk about it here with a specific situation. A lot of freelancers have this challenge of figuring out their hourly rate. They generally price too low. They generally don't consider the amount of time it's required as well as some time that you can't typically bill for. So here's a framework to help you find the balance.
First, you start by calculating your baseline rate. That's the minimum you need to charge to cover your time, skills, and overhead costs. Imagine how many hours a week you realistically want to work on this side hustle, factor in expenses like software tools and taxes, by the way, plan for 25%, at least, of your income to go toward taxes, and then set an income goal that feels worth your time and effort. So if you want to earn $4,000 a month working 20 hours a week, your baseline rate is $50 an hour, if I did that math correct. But that's just a starting point.
Next, research the market rate for your services. See what other social media managers, in this case, with similar experience, are charging. Platforms like Upwork can give you an example. Just be aware that there are people who price really low there. So if you see that, don't necessarily be discouraged.
There are also people who price higher. And once you have some experience, some testimonials, perhaps, then you can move to charging a higher rate. Now, what about adjusting for different clients? It's okay to vary your rates based on the complexity of the project or the client's budget. Just try not to undervalue yourself just because someone has a smaller budget.
Instead, in that situation, if you still want to work with them, just adjust the scope of the project to fit their needs. Just say, okay, well, if this person can't pay my regular rate, then maybe I can still do something for them, but not as much. I'll do something basic as opposed to the advanced or intermediate kind of work. As you move forward, it's good to review your rates regularly. As you gain experience, you should be charging more.
A good rule of thumb is just to review your pricing every six months or after completing several successful projects. Good luck. We're cheering you on. I want to help everybody out there who is freelancing or starting a new project. It's a big year.
We're already hearing from lots of listeners doing fun things. So let me know what you're up to, sidehustleschool.com/questions. We'll be back tomorrow with a new episode and a new one the day after that. Always completely free. My name is Chris Guillebeau.
You're listening to Side Hustle School. [Music]
- From the Onward Project.
