Pricing Your Services to Prepare for Freelance Maternity Leave
Taking a period of extended time off from your business can feel daunting. When you work as a freelancer, there’s no-one else to keep things ticking over while you’re not there. Both your business and your customers rely heavily on you as an individual.
As freelancers, we experience so many worries and fears when we take leave. We’re afraid we might end up losing our clients because we’re not available, or that our business simply won’t be able to survive without our constant presence.
However, the financial side of things doesn’t have to be a concern. If we adjust our prices to take into consideration the time we’re going to have off and our new financial requirements, we should still be able to earn enough money to make ends meet and maintain our business.
In this blog post, I’m explaining how to prepare for parental leave through your pricing. I welcomed my first child to the world in 2023 and I was asked by lots of you how I managed things. I also helped one of my mentees set her new prices in preparation for her upcoming maternity leave.
Having said that, it’s worth mentioning that while I’m talking about parental leave, the principles I’m sharing in this post apply to other reasons for having a period of extended time off from your business, whether you’ve decided to go travelling or are taking a step back for personal reasons.
Pricing your services
To explain how to build parental leave into your business, I think it’s helpful to start by explaining my approach to pricing. I work through this method with my mentees in Charge with Confidence.
We start by understanding your financial requirements, which include your business expenses, personal outgoings, tax payments, savings for retirement, and anything else you might need money for.
We then consider your capacity and how many hours you have available for paid client work. This involves accounting for any time you might want to take off for holidays, sick leave or, in this case, an extended period of leave.
Once you’ve calculated these figures, you can divide your financial requirements by your capacity, which will give you your minimum hourly rate. I also encourage my mentees to set an aspirational hourly rate so they have a range of prices to quote between based on what they think their client’s budget might be and how much other service providers would be likely to charge.
These hourly rates can then be used as a baseline for pricing any package or agreeing any unit rate with customers. As part of Charge with Confidence, I provide participants with my rate calculator spreadsheet that they can use time and time again to insert their numbers and calculate their rates or project prices.
How to prepare for parental leave as a freelancer
When you’re preparing for parental leave or an extended period of time off, it’s likely that you’ll have to make some adjustments to your pricing calculations. I always recommend reviewing your rates whenever your circumstances change. This is because if your financial requirements change or your capacity increases or decreases, the amount you need to be earning per paid hour worked will probably be different too.
In the case of an extended period of time off, the likelihood is that you’ll need to reassess both your financial requirements and your capacity.
Financial requirement adjustments in your business
When it comes to reassessing your financial requirements, start by looking at your business expenses. Will your business expenses look different during your time off?
Depending on how you organise your leave, your business expenditure may increase or decrease. For example, if there are some things you won’t need or want while you’re not working, such as training courses or certain memberships and subscriptions, you can cancel them, put them on pause, or simply discount them.
On the other hand, if you decide to hire a virtual assistant or ask another freelancer to keep things running while you’re unavailable, your costs may increase.
Redo your business budget and see what your expenses are likely to be.
Financial requirement adjustments in your personal life
Once you know what you’re going to need in your business, ask yourself how your personal financial requirements are going to be different.
If you’re going on parental leave, are you likely to have higher outgoings? You might want to keep the house warmer so your baby is comfortable, resulting in higher energy bills. Similarly, you’re probably going to need to buy lots of things for your baby, from nappies and bottles to cribs and car seats, especially if this is your first child.
It’s also a good idea to look into whether you’re going to get any kind of government support that will take the pressure off. When my mentee first calculated her new rates for her maternity leave, she was worried that she’d need to increase her prices significantly to a level that her clients might not be able to afford. However, once she’d factored in the statutory maternity pay she’d be receiving, her rate increase became much more reasonable and all her existing clients were willing to accept.
Capacity adjustments
You’ll probably need to make the biggest adjustments to your capacity in terms of the number of hours you’re going to have available for paid client work.
Start by asking yourself how much time you’re planning to take completely off from your business. Think of this as a number of working days that you’ll be unavailable, in addition to any standard holiday and sick leave you normally take.
I’d recommend being generous with this figure. Especially if you’re having a baby, you don’t know how you’re going to feel and what your baby is going to need until they’re here. It’s better to incorporate the highest possible number of working days off and then return to work sooner if you want to.
Another thing worth considering is whether your capacity for paid work will be affected in the run up to your time off and/or when you come back to work. During pregnancy, you might feel more tired than usual (I know I did!), and you’ll probably need time off for appointments. Once you return to work, you’ll also have childcare to take into consideration.
When you’re calculating your capacity, it’s really important to be realistic about how many paid hours a day and how many days a week you’ll be able to manage. This way, you’ll be charging enough and will feel far more secure when it comes to the financial side of things.
Whatever your reason for taking a period of extended leave, once you’ve assessed your new financial requirements and your future capacity, you can recalculate your rates. Charging your new prices will enable you to ensure you’re earning what you need to maintain a sustainable business while still taking time off.
If you’re preparing for a period of extended leave and would like my support to help you adjust your prices, Charge with Confidence is the mentoring programme for you. We’ll take into account your individual circumstances as well as everything you’re going to need your business to cover while you’re away. Knowing that you’re charging enough will give you one less thing to worry about during what can be a stressful time.
Hi, I’m Susie
I mentor freelancers on pricing and business finances so you can earn a decent living doing what you love.
I’m a translator, editor, chocoholic, crochet addict, animal lover, and budding gardener (get it?) who loves empowering others to achieve their goals.
