Even if youíre running a bare-bones illustration business off of your kitchen table, youíll need to spend money on equipment and supplies. If you work traditionally, youíll need art supplies: paint, board, brushes, &c. If you work digitally, youíll need software. Either way youíll need a computer, printer, scanner, bookkeeping software (more on that in a moment), office supplies: stationery, packing materials. Youíll need a filing system and storage. Add onto that a phone and internet access. Also figure rent and electricity.
Those are your operating costs.
Hereís the formula. Add up all your business expenses for a year. For your big ticket items like a computer, add up your credit card payments for a year.
Add your salary onto that.
Divide that total by 230 working business days per year (52 weeks minus 6 weeks vacation, sick time, and holidays). Even if youíre illustrating part-time, use 230 days.
Add a 10-15% profit margin.
Thatís your day rate. Thatís how much you charge if an illustration takes you one day to do.