11th February 2013, 01:31 PM
Unitof1 Wrote:would you say that if somebody was to try to be a self employed archaeologist that they should ask for a price for the job rather than a day rate?
I don't think there is a simple answer to this. Some clients will want a fixed price to "make the Planning obstacle go away", while others might recognise the need for a more open-ended approach, and you need to be able to offer either type of quote to fit the circumstances.
Either way, you need to start with an assessment of how much annual income you want/need, and divide it by how many days per year you are likely to work, to establish your ideal day rate. Then tendering for fixed-price work is as simple as multiplying your day rate by the number of days the job will take. Good projects have this at their core (whether presented to the client or not) because if you get it wrong you can find yourself unable to make ends meet. There is always risk involved - the trick is to get good at minimising it through sound & cautious estimating. Same applies to any sole-trader industry...
Note that what you charge for a job is not necessarily what you'd pay somebody else to do it for you - employees rarely see the majority of their company's billable rate! Not saying what's right or wrong - just stating the way the world works. If you are employed by a company (even as self-employed for tax purposes) you are trading potential profits for security and simplicity, letting the company take a slice off the top to cover their admin & tendering risks. So, an employee in a secure (?) job on £20k has traded away the right to ask as much as they want for their skilled services, but a sole trader might need a much higher day-rate to cover their risks. Of course, the sole trader also needs a range of rates to cover the fact they might be doing everything in the job from navvying to Project Managing! Oh, the joys of free-market capitalism...