Start with the annual revenue requirement
Combine the desired owner compensation, annual business expenses and a planning reserve for taxes or uncertainty. This creates a revenue target rather than an arbitrary hourly number.
Estimate billable hours realistically
A freelancer cannot usually bill every working hour. Sales, administration, learning, support and time off reduce billable capacity. Use a conservative estimate based on actual history where possible.
Divide target revenue by billable hours
The resulting break-even rate covers the entered assumptions. Add a profit or contingency margin if the business needs room for growth, late payments or scope risk.
Price the engagement, not just the clock
Hourly pricing is one option. Fixed-fee, retainer and value-based arrangements may better fit certain work, but each should still be checked against the underlying labor economics.