*This question is a part of my Free Q&A Series where I answer questions posed by entrepreneurs around the world on sites like Quora, Clarity, and various freelancing forums.*

Hi! And congratulations for starting your marketing agency.

You asked, “I am starting an influencer marketing agency. How much should my hourly rates for my services be?”

First: *you’re going about it backwards.*

Having an hourly rate is fine for internal purposes, but should not be on any external (client-facing) materials.

To determine what you need to make hourly (again, for internal reasons). Use the following formula:

- Determine the income you want to generate annually
- Determine how many work days you will have annually
- Determine how many hours per day you will work
- Determine your day rate by dividing your annual income by the number of work days
- Determine your hourly rate by dividing your day rate by the number of hours you want to work each day

For example, let’s say you want to make $100,000 (pre-tax) annually.

- Annual desired income:
**$100,000** - Annual work days: 365 days total, minus 104 weekend days, minus 10 holidays, minus 15 days vacation leaves
**236 days for work** - You won’t work 12, 10, or even 8 “billable” hours per day, it will be more like 4 or 6, on average. So we’ll use 5 for simple math.
- Your
**day rate**($100,000 divided by 236): $425 - Your
**hourly rate**($425 divided by 5): $85

Of course, this is a broad generalization not factoring taxes and other expenses. But you get the idea.

Your rate of $85 per hour is how you can determine if a job is *worth your time* and to use in proposals to ensure you are making money.

For the client-side, I would encourage you to focus on *value-based* rather than an hourly-rate.

For one, when you are hourly-rate focused, you are positioning yourself as a commodity. A hired-hand that can be replaced with ease.

Next, you are competing with everyone who will do your job for $1 less. This results in a race to the bottom of the pricing barrel. Soon, you are justifying why you are worth $85 per hour when the next day will do it for $80. Or $40. Or $15.

Additionally, when pricing per hour, you are effectively limiting yourself to a fixed income. Let’s keep the $85 per hour from above, and let’s say that you magically work 10 hours a day, effectively doubling your annual income to $200,000. To earn more, you either have to raise your rates (again, your competing with the guys who will do it for less) or work more.

I don’t know about you, but I like my vacation days. And going to my kids’ school events. And not being tied to the computer for 10 hours per day, 5 days a week, 48 weeks a year.

Instead, when you price your services for value, you can charge almost anything you want. Let’s say you are *THE* influence marketer to the stars. Your services are so well respected people will gladly pay $5,000 or $10,000 or $25,000 for the privilege of talking to you about how to gain more brand awareness and influence. And let’s say that you can do this for a client in 10–15 hours of work (not factoring the years and years you’ve spent learning your craft and developing systems). Even at $5,000 for the service, you’ve essentially made $500 per hour.

Could you lead a conversation with your client if you started with $500 per hour? Not likely. Remember, the other guy only charges $40 per hour. But you have sold the client on the *value* of what you can provide. Not just trading time for money. You’ve traded *knowledge* for money.

Finally, the more efficiently you can niche yourself, the more of a pricing premium you can demand.

*All the best,*

–

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