Deciding what to charge clients – Part 2

Theoretically, running your own business should mean more money and increased flexibility. In reality, though, we can end up working more hours and earning less than we did as employees. Often this is because we don’t charge realistic fees.

In my last post, we established how much you need to earn to cover your costs. While achieving this figure is important, you want to also earn a decent living from your business. In this post, I help you establish an amount that supports your desired lifestyle and also gives you the flexibility to grow or adapt.

What’s your Happy Rate?

I have two levels for measuring the financial success of my business: OK and Happy.

OK –  earning enough to cover essential costs, pay myself a small salary, and make pension contributions. Unless I consistently achieve this figure, my business isn’t viable and I have to contemplate the horror of a proper job. For me, this figure is £2,052.27 per month.

Happy – this is where I want to be at least most of the time. My Happy rate allows me to:

  • Pay myself a dividend (to pay for fun stuff like books, gin, and holidays)
    Put aside money for tax in advance (rather than a mad scramble when it’s due)
  • Invest in training and development
  • Hire other freelancers to help me
  • Experiment with new projects

What would a Happy figure look like for you? Take your OK figures and add the amount you’d like to spend each month on non-essentials that are important to you.

My Happy Rate is £5,000 per month. Based on the calculations in my previous post, this means I need to earn £360 on my working days. As self-employed people, much of our time is spent on unpaid and unattractive tasks such as admin, marketing and bookkeeping, so only half my week is income-generating.

This calculation helps me set rates for my coaching and training. I can see a maximum of 4 coaching clients in the day (this allows time for preparation, reflection, and writing follow-up notes), so I charge £90 for a session. Most of my workshops are half-day events, which means my fee is between £325 and £425, depending on the location. I also need to factor in travel, preparation, and the amount of energy required. I’m unlikely to get much else done that day, so it must be priced accordingly.

When I first started my training business, those rates were about two-thirds cheaper. Consequently, I just about covered my costs, but I couldn’t grow or pay myself a meaningful income. In fact, pro-rata I was earning less than when I worked on the cigarette kiosk in Sainsbury’s 30 years ago.


How do you feel about your Happy Rate? Does this involve a big shift from what you’re currently charging?

Remember, you’re working hard, so your efforts should support you to:

  • Earn a good income
  • Save for retirement
  • Invest in personal and professional development
  • Get recognition for your skills and experience

Don’t be the worst boss you ever had! If you look after yourself, you’ll do better work; if you do better work, you’ll get better clients. Better clients pay more, which means you can invest in you and your business. It’s a virtuous circle.

In the final part of the series, we’ll consider how you can communicate value to your clients, especially if you need to increase your fees.

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Image © Talaj –

Catherine Pope

I'm a financial coach who loves Victorian novels, technology, and big books about pensions.

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