That’s probably to be expected. After all, every freelancer has a different set of skills and level of proficiency. Whether you’re a web designer or programmer, or both, some of us are better than others. While experience is relative, ability is not. Ability is a key component in the formula of establishing the perfect fee structure for you.

Another factor is the rate of delivery. If you can push out quality work at a faster pace than the average freelancer, you should charge for it. Clients will always want their projects “done yesterday”. If you’re able to meet their needs, which otherwise would stretch another freelancer thin, you’re justified in asking for more.

The greatest factor is simply your current reserve of work. If you have ten projects lined up, complete with signed contracts and starting dates, you can afford to raise your prices. You’re a hot commodity. This is the basic law of supply and demand — it’s the very thing that dictates the price of everything you buy, from movie tickets to gasoline. Why should your services be any different? Be sure to only raise your prices in small $10/hour increments as you test the waters, or you’ll never pinpoint the rate that works perfectly for you. If you raise them too much, trust me, you will know. If the frequency of new work starts to greatly slow, adjust accordingly.

New Rule: Charging A Lot Can Be More Positive Than You Think

Finally, some basic rules to remember. The less you charge, the cheaper your clients will be. If you find a potential client negotiating your prices lower before you even discuss the project, you must let them go — that’s not who you want to work with. Another thing worth remembering is that most corporate clients will translate your hourly rate into some measure of skill. The companies with money want to spend more of said money on your services, because when business goes macro, money often does produce more favorable outcomes. Basically, they think that the more they pay, the better work they’ll get. Target these clients. Give them those high prices they want (part of any business is customer service, right?). Try to feel comfort knowing that while you sit worrying about your rate being too high — about scaring clients away — that, to some, your prices may actually be too low. There’s always a flip side.

Of course, there are a myriad of other factors that you should consider when settling on your hourly rate. Just don’t complicate it — that’s what made you read this article in the first place. No one can tell you what to charge, and nor should they. You know the type of work you can produce, and you should be able to think critically enough to decide what it is worth.

The post How Much Should I Charge My Clients For Web Design / Programming? appeared first on Ideas and Pixels.

Most people struggle when they’re asked to estimate the time they need to complete a project. Some people error on the side of pessimism, quoting far too much time, while others are too optimistic, leading to missed deadlines and unhappy clients.

Being able to estimate the amount of time required to complete a task is a skill that every project manager should have. In fact, project managers are almost wholly graded based on their ability to see a project to it’s timely completion.

First, You Must Identify The Task

It’s impossible to know how much time a task will require if you don’t first understand the true scope of the task. Often, projects are late not because of lack of effort, but because the details of the project were not properly identified and prioritized. Once you know the tasks, it is up to the project manager to include the necessary parties involved in the estimation process. The person who will be doing the work will always have the most accurate estimation.

Break The Project Down

When you look at a project as a whole, it’s often difficult to conduct a true analysis of the requirements. This is especially true for large projects. Breaking down your project means segmenting all of the different moving pieces into so-called “mini projects”. From there, you can allocate small portions of time to certain aspects of the project. Finally, you add together the projected time of all of the mini projects, resulting in a more accurate final duration length. By narrowing the scope to these single “events”, you will be able to provide a better overall estimate.

For an example, I will use a website project. A client contacts you and asks for you to quote him on a time span to complete his site. You could go out on a limb or reference past projects as the standard deviation. Or you could break the project down into the individual pages. “The header and footer will take two hours. The home page five. The about, services and contact page should each take about three hours each. In total, that comes to 16 hours.”

Using The PERT Formula To Make Your Time Estimates Even More Accurate

PERT stands for Project Evaluation and Review Technique. It’s a project estimation technique used by thousands of organizations around the world.

Many top organization employ mathematical formulas to estimate a task or activity. While there is some science involved, most of the effectiveness comes from the psychological effect that using a cold calculation can provide. I prefer to use the PERT formula, for it’s simplicity and accuracy.

In order to use PERT, you must first identify three simple estimates:

1. (Tm) The Most Likely Time Required
2. (To) The Most Optimistic Time Required
3. (Tp) The Most Pessimistic Time Required

Now apply the following formula:

Our PERT Formula Solution!

Voila! Now you have a fairly accurate estimate based on mathematical calculation, not emotion, greed or guilt.

The post How To Estimate Time On Any Project (with the PERT formula) appeared first on Ideas and Pixels.

As a co-owner of a small business, I know how important it is to structure out operations. We focus on every aspect of building a strong business, and part of this involves taking careful considerations for our taxes. It’s important for all small businesses to manage their accounting as best they can, and in turn, create write-offs to help reduce the income tax you need to pay quarterly.

Here are a few essential small business tax tips that we found out first hand, based on two years of running our own business.

Receipts This is the most important thing to your overall tax preparation. Scan all business receipts, store them onto a computer and then reprint them, since most carbon receipts will fade with time. If you do not have the time to scan or reprint them, just use a pen and re-write the date, place, what you purchased and purpose of the purchase on the receipt itself (only do this if it is a last resort or if you are on the road). If you do not have proof of your business costs and the IRS knocks on your door, well… just make sure you have other proof (check card statements, credit receipts) if you don’t have your receipts.

Car or Other Vehicle Expenses Most businesses have a company vehicle and when calculating the taxes, use either an Actual Expense Method or the Standard Mileage Deduction. In the long run, they normally come out to be about the same. With the Actual Expense Method it allows the taxpayer to write off the depreciation and out of pocket cost, if they own the vehicle. Just take note that if you choose this way you need to keep great records and what is personal and is for business.

The business percentage is what you need to use for your tax write offs. The expenses that you can write off will included, vehicle repairs (tires, breaks, ext.), vehicle essentials (gas, oil, ext.), vehicle fees and garage rent. You do not calculate miles or use any sort of traffic tickets, which you might have for the year, and a reduction will need to be done for what is calculated as personal use.

With Standard Mileage Deduction, you will then keep records of business mileage at the IRS rate of $.555/mile (rate is for 2011). You need to keep mileage logs that will need to include the date, destination, purpose, odometer Start/Stop and the total number of miles (Round Trip). If you had to spend anything for parking or a toll, record that as well, and try to get a receipt if possible. Personally, I use the Standard Mileage Deduction because I know how to repair my own vehicles and this is a great way to reduce even more of your income tax.

Travel Expenses The major thing that I did not realize for this is that if you receive frequent flier miles to purchase a ticket(s), the airfare cannot be deducted when this is done. Now, if you do not use frequent flier miles your airfare will be deductible and so will be everything else on your trip. Just make sure everything has a reasonable purpose and cost. You can even include your travel tips for food or drinks.

Business Gifts It is only a small amount, but it adds up. You can deduct up to $25 a year, per person, for gifts. Don’t get gifts mixed up with entertainment, because you will subject yourself to the 50% rule. For example if you mark a $25 gift as entertainment, you will receive a deduction to $12.50. Make sure you save the receipt and list the purpose of the gift.

Repairs Repairing business equipment or property is considered a deductible. Be cautious when determining what is considered a repair and what is a capital item. For example, our printer tray needed to be replaced, and this is a business equipment repair. Replacing the entire printer would be a capital item, and would be subjected to a yearly depreciation value. Generally equipment priced over $100 is considered a capital item.

Rent Many rent owners make payments, January to December. These expenses are deductible as long as your business is being run out of it. When a business uses accrual accounting, then it needs to be considered a capitalized expense. On a cash basis, then it will become deductible for the current year. You are able to write off most utilities used as operating costs.

Subcontractors When operating a small business through its first years, there are always the busy times when you cannot keep up and need to hire out help. Keep good records of any subcontracting expenses because you can write this entirely off your bottom line.

Advertising These deductibles included any expense that includes business cards to event fees. You can even deduct billboard rental fees and any advertising campaigns that may arise.

Sponsoring Charity Events All charitable sponsors can be written off and most of the time you just need actual invoice, detailed report of what was done, date, and for whom, along with a written thank you statement from the charity.

Medical Expenses You can write off 90% of all medical expenses as long as they are not over-the-counter drugs. This section of our taxes is going under a change for 2012-13, but we will keep a heads up regarding this on our blog.

Small Expenses – These Will Add Up Subscriptions and dues are deductible as long as they are for business. The only ones that are not are hotel, athletic, airline and sporting membership costs, even though they are considered business-oriented (hotel and airline is categorized in a separate section dedicated for travel expense).

Professional and legal Fees as long as they are legal, included tax or accounting services and appraisal fees are all deducible. Merchant and bank Fees include all bank related fees or costs. This includes PayPal costs and ATM service fees. General office expenses, including all offices supplies, cleaning services, plants, postage, uniforms, phone bills are all deductible.

Hope this helps It took us a little while to get into the rhythmic fashion of running our business, and we hope that this will help you in your own quest to grow. If you have anything else that we can add, feel free to leave us a comment and we will modify the post with a recognition of your addition.

The post Tax Write Off Guide for Small Business appeared first on Ideas and Pixels.

The year has already been one of success. Recently, I had time to sit back and reflect on some of the basic principles that I’ve always strove to follow. They aren’t from any one book or person, but rather a collection of things I overheard, events I witnessed, stories I listened to. And in my recollection, I thought it would be wise to write it down — and now, share it. There are far more than three principles that I deem important, but for the sake of detail and to maintain the integrity of post length, I’ll segment them into a few more posts down the road.

Build Assets, Not Liabilities.

I can’t claim credit for discovering this simple principle, as it is borrowed from a chapter of Robert Kiyosaki’s best-selling book, “Rich Dad, Poor Dad”. At first, it doesn’t actually sound that informative or effective. But after it is explained, it can transform the way you look at your future, and in turn, how you plan for it. The way that I’ve always explained it, and the way that it was explained to me, was in the form of a table, so I will lay it out much the same way.

As you can see, what separates a “rich man” from a “poor man” is that the rich man makes money work for him. He doesn’t look at the short term, but the long, and finds comfort knowing that he can turn every dollar into two. Assets are wealth-generating machines. I, for example, own stake in a book ministry that generates a modest, but respectable amount of extra income. I subcontract work out to companies that need my assistance, all while managing Ideas and Pixels. Every few weeks one of my real estate clients will ask me to photograph a half-million dollar home, and I always oblige. The rich man accepts money from any source that he can, but he also manages his time and efforts to make his time spent truly effective.

Don’t Fall Into The 80/20 Ditch.

If you’ve never heard of the 80/20 rule — the Pareto Rule — here’s the gist: 20 percent of your clients take up 80 percent of your time. It almost always happens. Maybe it’s happening to you right now. A few needy clients can lead to a shift in resources from your default role in whatever you do, to that of a support assistant.

It’s important to communicate to clients that while you’re there for them, you can’t hold their hand after the main transaction or service has been completed. You can, however, assume the role of training wheels — there for support when your customer sways or needs true assistance. They will understand, and this will quickly erase any chances of future resentment in the relationship, which is never productive for a business relationship.

Make Money While You Sleep.

And I don’t mean like those gimmicks that you get spammed with in your email or on Facebook. I first learned of this concept from my father — a union lobbyist and the author of one great read on union organization — who, upon learning of my newly founded interests in being an entrepreneur  sat me down to explain that “all of the great business men, the one’s to whom wealth is no longer a thought, know that you are never truly well off until you generate money while you’re eyes are closed.”

It was a dream concept — who wouldn’t want to make money for just laying in bed? He explained further, “But it’s not as easy as it sounds. It involves a lot of work from the get-go. But you just have to look for opportunities that will generate a little bit of money over a long period of time. Then get ten vehicles that can do that, and now you’re making a lot of money over a long period of time.” He smiled, “That is financial independence.” These vehicles come in the usual forms. 401k’s, IRA’s, stocks. Investment properties, renting out a spare bedroom.

Hone your mind to seek opportunity, and opportunity will soon learn to seek you.

The post Three Tips For Financial Independence — The Hard Way appeared first on Ideas and Pixels.