The first step is to determine what you will need. This can be done by ompleting the following simple formula:

Hourly Rate = (Net Income + Expenses)/(Working Hours - Non-productive Hours)

Note 1: "Expenses" means all business expenses. Remember to include all insurances, travel, training, marketing and office expenses.

Note 2: "Non-productive means non-billable, The largest item in this area is time spent marketing but training can also be a big one.

As simple as this formula looks, it is a very good guideline. You know about how much money you need to make to support the standard of living you wish (net income). You also have a good idea how many hours you want to work per year (Working Hours - Non-productive Hours).

Once you know how much you need to bill per hour (you will generally develop a low, high and "OK" number) you can then determine whether your skill can support that rate. Clearly, a computer programmer cannot make $250K per year programming, for example".

Beyond this simple exercise specific pricing approaches vary depending upon the specific service offered.

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