How much should I charge when I go out on my own?
More than your old salary suggests, and priced against the problem, not your hours. Start with what the problem is costing your client and what they'd pay to make it go away. Then check the price covers your real costs, which are higher than they look: taxes, benefits and the unpaid time you'll spend finding work.
Why does dividing my old salary by the hours undercharge?
Because it leaves out three things. What your employer paid on top of your salary: for management and professional jobs, benefits are 31.5% of the employer's hourly cost.1 The self-employment tax you now pay, 15.3% for Social Security and Medicare.2 And the hours you won't bill: selling, admin and the gaps between clients.
A rate that matches your old hourly pay is a pay cut.
Should I charge by the hour or by the project?
For most expert work, a fixed price for a defined outcome is easier to buy and fairer to you. Buyers compare a fixed price with the cost of the problem. They compare an hourly rate with their own salary, and that comparison rarely goes your way.
Keep hourly for open-ended advice where the scope genuinely can't be fixed.
How do I find out what people will pay?
Ask, in your early conversations, what the problem is costing them and what they've already spent trying to fix it. Then name a price for a specific piece of work and watch what happens.
If everyone says yes immediately, you're probably too low. If nobody does, check the problem and the buyer before you cut the price.
Should I discount for my first clients?
Be careful. A first-client discount tends to become your price. If you want to lower the risk for an early client, shrink the scope or offer a short paid pilot instead.
What this looks like
Maya, an imaginary founder, spent years in hospital finance and now helps independent dental practices recover money lost to rejected insurance claims.
“A hundred and fifty dollars an hour, because that's roughly what I earned.”
It invites the practice manager to compare Maya with her own salary.
“A fixed fee to rework last quarter's rejected claims and rebuild the submission checklist.”
The practice manager compares it with the money she wrote off last quarter, which is the comparison Maya wants.
Where this fits
Price is part of the second layer of the Proof Path, the business model, alongside the offer and how buyers find you. Read about the business model.
Related questions:
- 1. U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, Table 4, June 2026 (released September 9, 2026). www.bls.gov
- 2. Internal Revenue Service, Self-employment tax (Social Security and Medicare taxes), updated June 27, 2026. www.irs.gov
An honest read on where your idea actually stands.
The Startup Readiness Assessment takes most people under ten minutes and looks at the eleven parts of a business in the order they need to be solid.
