Start with the hours available in the year.
Calculate capacity before quoting a rate
Start with the hours available in the year. Deduct leave, administration, sales, learning and expected gaps between projects. Those hours still need funding but cannot all be billed. A rate based on every working hour can leave the business short even when the calendar looks busy.
Build the revenue requirement
Add target owner pay, business costs and a reserve for the risks you intend to cover. Divide the revenue requirement by realistic billable hours. Keep tax assumptions explicit and obtain local advice for their treatment. The result is a planning floor, not evidence that every client will accept that price.
Use the floor to shape offers
A project price also needs scope, revision limits and delivery assumptions. Estimate the hours for the whole engagement, including meetings and handover. Compare the implied hourly return with the planning floor. Review actual hours after delivery so future quotes reflect the work rather than the original optimism.