One of the biggest things freelancing taught me is that the rate I think I charge per hour and the rate I actually earn are two completely different numbers.
When I worked out my prices, I had a very nice formula. It took into account what it costs to run my business and what my time is worth, and it gave me a rate I felt good about. Say it was $70 an hour. On paper, everything added up.
In practice, it never played out that way. Not once.
Where my $70 went
By the time a project was finished, I had given away time all over the place. I'd done research to figure things out. I'd worked on things the client never asked for, because I thought they were a good idea. I'd made changes for free, answered emails, jumped on calls. None of it was on the invoice.
So the invoice still said $70 an hour. But when I divided what I was paid by the hours the project really took, my effective hourly rate most of the time came down to something like $10 or $15.
And the worst part: I didn't even know.
Work out your real hourly rate
Your effective hourly rate is simple: the money a project paid you, divided by every hour it actually took. Not just the hours you billed. All of them. Put in a recent project and be honest about the hours nobody paid for.
money in ÷ every hour worked
If the number shocks you, you're not alone, and it doesn't mean you're bad at what you do. In my case, it meant I was very good at giving my work away.
Why I never knew
Invoices only show the hours you bill. Nobody sends you a statement for the hours you gave away. There's no line that says "research: 10 hours, unpaid" or "your good idea: 15 hours, free". So the money looks fine on each invoice, and you only feel the problem in the bank account at the end of the year, without being able to say where it went.
You can't fix a leak you can't see. The first step is simply to count every hour, paid or not.
The good ideas nobody asked for
This one was mine more than anyone's. I care about the work, so when I saw a way to make something better, I'd just do it. That feels generous. But a client can't value something they never chose, and they may never even notice it.
The fix is to offer the idea instead of doing it: "I think this would make the site better. It's about 4 hours, $280. Want me to add it?" If they say yes, you get paid for your good idea. If they say no, you get your evening back. Either way, nobody is hurt.
Research is work too
Figuring out how to do something you haven't done before takes real time. If it's for this client's project, it's part of this client's project. Build it into your quote, or bill a short discovery phase before the main work starts. Learning is not a hobby you do for free on someone else's job.
A middleman to stop me from hurting me
This is why Prolancer is such a personal project for me. I'd done such a bad job of protecting myself over the years that I wanted a middleman: something between me and the client that would stop me from hurting me.
I'm building it as a tool to fix the leaks I saw in my own business. In my mind, it works like a project manager and a business manager: it keeps track of the hours, notices when work goes beyond what was agreed, puts a price on it and makes sure it gets billed. So that my long hours, my productive time and my skills don't go without fair reward.
That's what the name means, too: a professional freelancer. Not someone who works more hours for less, but someone whose business pays them properly and still leaves time for the life they went into business for.
That's my story. It doesn't have to be yours. But now you know who I am and where Prolancer comes from. And if you run the numbers above and don't like what you see, you're exactly who I built it for.