In getting self-employed, there are other important factors which must be taken into account. Success in freelancing means that one must be able to understand one’s personal and business cash flow – the resulting hourly rate should be competitive as well as still make a good living.

Look at the Freelance Job Marketplace Rates First!

Typical rates of data entry providers run anywhere from $1 to $5 per hour on many freelance sites: most offers seem to favor hiring to those who are willing to take the lowest $1 per hour rate. Personally, I didn’t think this kind of pay is enough for the freelance data entry provider to live comfortably – which is further confirmed with the estimate I had outlined below (assuming that the freelancer is honest and wants to update all contributions).

This computation assumes a single freelancer living alone without any dependents and doesn’t even need to rent a place to stay.

TOTAL: P 15,625 / month or P 187,500 / year

Estimate number of working hours per week = 40 hours /week (understand that not all of those 40 hours are billable hours)

Estimate average number of billable hours per week = 5 hours / day x 5 days = 25 hours /week

number of hours worked each year = 25 hours/week x 46 weeks = 1150 hours /year

Assuming $1 = P45 conversion,

minimum hourly rate of full time data entry personnel = P 187,500 / 1150 hours = P163.0435 per hour or $ 3.62 / hour

Clearly, this is not even enough to even cover other monthly expenses such as rent, loans, insurances, education and training and even on buying personal wants such as jewelries and gadgets. With that kind of lifestyle, this particular freelance data entry provider shouldn’t settle for data entry jobs rates that are below $3.62/hour. Non-productive time such as training should also be considered.

Most often, determined freelancers start out by offering data entry first then moving on to learn new skills in writing, forum and Craiglist postings and social media marketing and other jobs that meet the freelance job demand. Those who have IT knowledge can even further get training on programming, graphic and web development.

How much should the recommended hourly rate be?

The computation above is just the minimum rate for the given lifestyle, but how about the recommended hourly rate? The recommended hourly rate is, of course, greater than the minimum hourly rate because one or more of the following are considered:

• Actual work experience
• Job difficulty/complexity of project
• Job skills required for the job
• Workload: higher hourly rates is recommended for those working for one or more freelance jobs at the same time

I get my recommended hourly rate by observation: if I easily get hired at every job I’ve applied to then I know my hourly rate is low. If I get rejected one after another, then I know my hourly rate is just too high. Set a rate which result to 50%-50% rejection as much as possible!

For the above example, I recommended hourly rate should be at $5/hour, which is quite high for Philippine-based data entry providers.

I am talking about getting jobs directly from clients and not from freelance sites such as oDesk and Elance.

At first glance one visible advantage of being a regular salaried freelancer is that they are given “guaranteed income” for several months to a few years. The “guaranteed income” that I mention here usually does not involve written agreement to bind the freelancer to the client legally. More often, the freelancer usually get freebies, such as several books, licensed software and even a computer from the client – to learn new skills required for the job.

I haven’t tried any of those fixed salary arrangements; I’ve always preferred working by the hour or set fixed priced rates with an agreed scope of job. I think that arrangement is fair for both clients and freelancers: in hourly work, clients get billed only for work, while freelancers get paid only when they do work; in fixed priced jobs, clients get work done for what is agreed, while freelancers get to work only at the agreed scope. I think this arrangement is fair and protects the interest of both parties.

On the other hand, a salaried freelancer, whether full time or part time, puts the freelancer at the mercy of the client. The client thinks that he can just throw any amount of work to the freelancer to get more out of the monthly billing. The freelancer may soon realize that he should raise his rates, but could not easily do so because he feels he is indebted to the client – will all the payout and freebies that he got for the work.

Besides that, I think this salaried freelancer feels like he is an employee than a freelancer.

Right now, I had tried to make deals with potential freelancers to convert their monthly salary arrangements to fixed prices.

For as long as there are freelancers who are willing to accept salaried arrangements, it may be possible that there might be time when this practice becomes the norm. Pursuing a freelance career may not be an attractive option anymore.

Are you one of those freelancers who are willing to get paid monthly regardless of the work volume? If so, are you satisfied with the arrangement or do you have regrets in accepting these offers?

I have encountered others like me who like to consider changing careers because IT is fast becoming a profession that pays a lot when employed. I also discovered that there are also more jobs in the internet that opens up more possibilities because of some outsourcing sites. Writing and programming are jobs that are usually outsourced for less expensive but quality labor.

I began the IT field by having an inclination in programming. As I was taking up engineering, I noticed that I always got high grades in computer subjects. This had prompted me to pursue professions related to IT.

I took up short term courses to further enhance my skills. After finishing these courses, I got myself employed as an IT instructor for a few years. Then I moved to another company working as a programmer – although I was doing a number of things at a time – web designer, programmer and technician.

Now, I had decided to go on freelance. Although I had applied to various jobs, I had considered the possibility of going freelance instead of getting employed. This is entirely a very different experience indeed because I am relieved from the pressure of going to work and setting strict timetables.