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Unreasonable Rates

Aug 10, 2020 | Living the Dream

Stillwater, Oklahoma, the city of my residence, has a FB group that is the place for its citizens to rant, rave, seek recommendations, and get general information. Every once in a while, there will be an inquiry for some service or product that is wanted, specifically at a “reasonable” rate.

Reasonable. What does that mean? Is there anyone charging an unreasonable per hour? I have never seen someone post a notice that they need someone to mow their yard at a crazy rate. No one asks that. The best I can figure out Is people have this natural expectation of what a thing or service should cost. Reasonable inevitably means less than that. It is a conundrum as the target is always moving depending on whatever subjective factors they use to fix that rate.

Plus there is no accounting for the actual costs involved in providing that good or service as it is inconsequential to their peculiar measurement. Even though what is reasonable is measured only by them, we are just supposed to know what they think is reasonable. Lord, have mercy.

As a professional graphic designer, I feel a certain weight of responsibility in setting my rates. I am retired, and my basic needs are met. Consequently, some might think that my reasonable rates would reflect that. I do not share the view. I hope to fix a balance between creating an appetite for professional design services in Stillwater and a pricing structure that could enable a designer to earn a living wage.

To me, a reasonable rate is a rate that provides the best chance at success. In short, I am trying to create an appropriate expectation for that reasonable rate.  Wish me luck. So here is my formula:

  • 22 working days in a month. Four billable hours in a day.
  • 15 working days off a year.
  • $60K annual net income is the target (the average yearly income per family in Stillwater is about $42K. One-quarter of the residents live below the federally established poverty line. $42K is not far from it.).
  • $20K annual for taxes, maintenance, insurance, software, hardware, whatever. So $80K gross income is needed to meet the target net income.
  • Hence these calculations: 22 x 4 x12 = 1,056 hours a calendar year. 1,056 minus 60 (15 x 4 = working days oft) = 996.
  • Here it is. $80,000 divided by 996 hours = $80 and some change per hour.
  • $85 it is then. This rate is not uncommon for plumbers, mechanics, and other tradespeople in this community.

Is this reasonable?