What price should a light entrepreneur be paid for the work done? How to calculate a profitable price for your own work as a light entrepreneur? It is worth pausing for a moment to consider pricing, as there are many things to take into account when pricing the work of a light entrepreneur - the most important being that a light entrepreneur is responsible for his or her own social security, just like any self-employed person.
General price level in the sector
The easiest way to start pricing for a light entrepreneur is to do careful research on the general pricing in your sector. The easiest way to get started is to look online at various discussion forums and the websites of industry associations. The various social networking groups in your sector are also excellent sources of information when considering pricing.
The most important thing in a price level survey is to carry out the research as widely as possible, so that you get a comprehensive picture of the price level.
Your experience level
In some areas, experience also plays a role in pricing, and this too is worth looking into: if you are doing website design and coding, for example, a recent graduate may not be paid as much as someone who has been designing websites for several years and has references to show for the work they have done.
As a beginner, you may want to price your work more moderately, and as you gain experience and references, you may want to reconsider your pricing. It is highly advisable for a light entrepreneur to review their pricing from time to time, so that at no point do they sell their skills too cheaply.
Hourly or project pricing?
When researching the general price level in the industry, it is also worth finding out whether the industry usually charges on an hourly basis or whether there is an overall price agreed for the project. And then do your own calculations to see which would be the more profitable and best-selling option.
For example, in the construction industry, hourly pricing is quite natural, while even in website design, both project and hourly pricing work.
When pricing, it is worth considering whether the work is such that it is difficult to determine the number of hours spent on the job, in which case it makes sense to give the client an estimate of the hours spent and price the job per hour. If, on the other hand, it is a clear project and pricing per project is more profitable, then it makes sense to use the project as the basis for pricing.
Expenses and other charges to be taken into account
The light entrepreneur is responsible for his or her own work-related expenses, such as all the tools and equipment needed. In addition, the light entrepreneur takes care of his/her own social security and is liable to the YEL, just like any other self-employed person. In addition, the light entrepreneur does not accrue paid holidays.
It is really important to include the costs of any YEL insurance premiums, sickness and holidays in the pricing.
In addition to these, you should take into account any costs you may incur for your own work. Light contractors in the construction sector should agree with their clients that any material costs (e.g. screws and nuts) will be charged in addition to the work. If, on the other hand, a light contractor needs a computer for his work, it is worth including the cost of the computer in the price.
So, as a light entrepreneur, you should at least take all of these into account:
- costs of materials and supplies
- YEL insurance contribution (if YEL-obligated)
- health insurance contribution
- billing service fee
- computers, phones and connections
- possible illnesses and holidays
- travel expenses
For pricing purposes, you should make calculations, for example using Excel or a similar spreadsheet tool. You can also use Truster's handy calculators when thinking about pricing.
What to offer a light entrepreneur for work done?
This list of tips is also useful for the contractor when considering what kind of compensation to offer to light entrepreneurs. In addition to this, the contractor should bear in mind that the company saves quite a lot in employer costs when employing light entrepreneurs. This saving should be at least partly channelled into the fees of the light contractors, shouldn't it?