≡ Menu

Setting Your Freelance Writing Fees – Part 3 – So, What’s The Number?

Part 1 – Tracking Expenses |  Part 2 – Savings & Benefits | Part 4 – You’re Entitled to a Profit

Once you know what you actually spend, both for yourself and for your freelance writing business, and you know how much you need to provide your own benefits and you know how much you need to save for living and taxes, you’re in a good position to figure out how much you need to charge for your freelance writing.

It’s actually pretty easy. Simply take the total of your expenses and divide it by the number of hours you want to work. You can do this on a weekly, monthly, annual or other basis. As a check on yourself, you should be charging at least a third more an hour than you’d get at a regular job, maybe more. That third + takes care, more of less of the benefits and taxes.

When I’m reviewing my rates, something I do a couple of times a year, I use a 50 week year rather than 52 weeks. This allows for some vacation time and it adds a bit of a fudge factor, or cushion.

It’s Paid Hours That Count

It may be obvious, but it needs to be said. The only hours that count when you’re figuring out how much to charge are the hours you’ll actually get paid for. You won’t spend a full 40 hours a week writing or editing or researching for your clients. Ideally you’ll spend about a third of your time. Maybe another third, give ortake, will be devoted to running your business – everything from maintaining a website to sending out invoices. That leaves roughly a third of the time for billable hours. Is it any wonder many freelancers, partiocularly in the beginning work an 80 hour week to avoid the 40 hour week?

Of course, if you’ve had a regular job, you know you didn’t spend all your time there heads down working either. My hunch is it works out about the same; if you work a 40 hour week at home you’ll get about as many billable hours as you would at a job, unless, of course, your regular job was as an attorney or other billable hour driven industry.

I use a 20 hour work week when I’m figuring out my rates. That’s a bit light on either marketing or maintenance, but I’ve been doing this a long time. 

That High Rate May Be Right On Or Too Low

The first time I actually worked through all the steps, including expenses, savings for myself and taxes, and setting aside money for health insurance, retirement, etc. and figured it on a 20 hour week, 50 weeks a year, the hourly seemed awfully high. I’ve heard the same response from many other writers as well.

Before you panic, double check your figures. Work out what that number means per week, per month and annually. That may help you put it into perspective. 

It’s likely, however, that your hourly may be a bit low. It won’t hurt to round up or add another percent or two.

Can You Get That Much?

I love what Angela Booth says: It really doesn’t matter what others are charging. Truly. She’s right. If you’re confident about the fees your asking for you can pretty much write your own ticket.

Oh I don’t mean you can talk the $2 per 500 word SEO article employer to pay you a buck or two a word. But there are magazines that pay that much. Of course, the articles in the magazines that pay that well are of a much higher quality than the typical SEO article, but if you’ve consistently been getting pocket change you might be pleasantly surprised you can get considerably more just by raising your sites.

It’s also unlikely that you’ll be able to make a jump from say $12 an hour to $125, although it’s possible. But if your numbers show you should be earning $75 an hour and you’re only getting $15, something has to shift or you’ll be working at a loss forever.

Work out the amount you should be charging an hour. Sit with it awhile. Get comfortable or almost comfortable with it. Then figure out how to get there, if not all at once, over six months or a year.

[sig]

Image from http://www.sxc.hu

{ 16 comments… add one }
  • admin

    Autumn, I don’t know what area you’re trying to make a living writing in… seo articles are almost hopeless imo, although a few are making more money… significantly more… I don’t know how much work they are getting. I’ve done SEO for $20 or $25, but had to fight to get paid and it bored me to tears.

    But you might consider working in another field… for example, Peter Bowerman’s Well-Fed Writer is aimed at corporate writing… marcom, all sorts of things… guess it’s time to dig out the review of that book. Mike Stelzner of http://www.writingwhitepapers.com/blog/ shows writers how to make a ton writing white papers… copyblogger.com teaches copywriting… another lucrative writing field. Consider some of these. You’ll work hard, but my hunch is you’re willing.

    Ron, send the folks wanting a ghostwriter my way… 😉 I can even be talked into finder’s fees once and awhile.

  • For Autumn:

    The sad reality is that there employers dying to hire 4 cent a word writers. You can have as much work as you want. And, no, they don’t expect high-quality writing because only search engine bots read the articles. All they want is keyword placement and somewhat correct grammar.

    However, sometimes, maybe because the account has potential or, more likely, you need work, it is prudent to chase low-paying jobs. Problem is, once you work that cheap, it’s hard to ever get the client to pay more. A trick I use is to describe a highly-qualified, but junior, writer on my “team,” who works much cheaper. I offer her services and my supervision as a low cost package.

    And the truth is, I have three children, one a senior, one in college, and one in grad school — that I do use. But I’ll work cheap myself as need be, I just don’t like the client to know that.

    For Anne:

    Your example demonstrates the first filter I make of prospective clients — does it make business sense, and is it a business to which I want to contribute. For example, I won’t even look at requests for creative or autobiographical ghostwriting — although if it is one’s specialty, I understand. It’s just that the “flake” factor is real high among those employers. And the crazy new business ventures, or worse, any that prey on the gullible/insecure/infirm etc.

    I know, that doesn’t leave many. LOL That’s why I’m going broke. LOL

  • admin

    ron, excellent… I sort of do this automatically now and had forgotten about breaking it into pieces like that. Buying signals are pretty reilable. Once and awhile they aren’t. Recently had a prospect tell me I was “to rich for his blood.” I knew he wanted me so I asked “by how much?” His answer was “at least 50%.” I said I can’t do it… might consider coming down maybe as much a 10% if I got a piece but…” I let him go, asking him to consider me a resource. Figure two things: wife/business manager/someone convinced him he couldn’t afford me and since it was a book about getting rich I figured he didn’t yet know how so I was well out of it… of course, we often teach what we need to learn.

  • Yeah I struggled with the process of setting my rates. Once I felt I had a good rate at which I could live and that others could pay, the job opportunities dropped. I hadn’t changed anything, so I know it’s the market finally hitting this industry (plus the influx of now unemployed people who think being a freelance writer is easy). As a result, I have had to lower my rates, figuring that writing at a rate that’s lower than my normal figure is better than getting no work at all.

    However, I find that many employers think they’re entitled to something for nothing. Before answering an inquiry on my rates recently, I decided, on a whim, to cut them in half. That part didn’t bother me so much, as I figured it would guarantee me the job because I was just so inexpensive. It was sort of a “bad economy special,” I guess. Imagine my surprise when the potential client e-mailed me back and asked if I offered a bulk discount. Okay…So I decreased it further by 25%….pretty good bulk discount IMO. They never got back to me. I assume that’s still too high for them, after cutting my rates more than 50%. I wonder what kind of quality they’ll end up getting for a few pennies for word.

  • Hi Anne, since you liked my last post, I thought I share my comments on Mr. Uku’s anxiety when faced with prospects asking for a discount.

    Everything about the prospect’s question is positive. It’s called a “buying signal,” and it means you’re close to getting an offer to buy. It’s only after the prospect offers to buy that you have any bargaining power.

    The key is to distinguish whether the prospect wants you and only seeks a discount to fit you in his/her budget (or, in many cases, just an instinctive need to negotiate), or if the prospect only wants to meet his budget, and you’ll do. How do can you tell? Again, standard Sales 101: eliminate every other possible objection to using your services to confirm that price really is the issue.

    Say: “I understand, Mr. Prospect, the economy is tight and you need to watch your budget. So, I’ll consider lowing my price, but only if you can agree to purchase right now.”

    A “yes” answer means the prospect wants you. Great, now it’s just a negotiation. Surely you can think of something of value to ask for in return for granting a discount – less work, additional work (for more money), faster payment, referrals, testimonials, etc. Sure, you still walk away if the client won’t budge, but at least you had that chance.

    “No” means, at minimum, that you still got some selling to do. Until the prospect wants what you specifically offer, you got nothing. Price is the last issue discussed because it is rarely the most critical issue. Price is only the yardstick by which the prospect is measuring candidates. Sell your value proposition so that you measure up, then move to price.

    Of course, a huge gap between your rate and their budget cannot be overcome, but a reasonable gap between your fees and the competition’s can. However, selling on price doesn’t work in our profession like it does for WalMart — it only ensures that you get the most miserly clients. And believe me, any anxiety your psyche hoped to avoid by needlessly caving in on price, is replaced x10 with the anxiety of dealing with miserly clients.

    So, the next time a prospect asks you for a discount, smile to yourself. It’s all going exactly as you planned.

    r

  • Oh my, here’s a touchy subject. I think Angela Booth is crazy to claim it doesn’t matter what others charge. If I’m an aspiring playwright bidding on a project, and Pradeep Shakespeare is available at 2 rupees per word, how is my confidence in my ability going to make that employer pay me more? As if the sheer power of our personalities can make an employer throw money away.

    Does everyone understand that writers/marketing people are over-represented in the current corporate lay-offs? If you use the freelance job boards, haven’t you noticed how many more bids each project is receiving? The creative staffing firms here in Dallas are shutting down or seriously downsizing. My thoughts:

    While it may feel good to pound some hypothetical rate out of your calculator, and work through the rationalization you hope to make to that frugal employer, I wouldn’t bother. The employer could care less about your living expenses, etc. The market and your ability to compete in it determine the rate you will be able to charge.

    This is standard Marketing 101 stuff — what will the market pay for what you have to offer. For example, you may be the greatest writer, but without a portfolio, no one will pay you like one. You may have a great portfolio, but if you are horrible at marketing, you won’t earn top dollar.

    On the other hand, you can be a lousy writer and still charge top dollar — if you know how to market (believe me, I see it all the time). The sad fact is, because many of our employers can’t write well, they also can’t recognize good writing and will hire a hack with a good sales pitch.

    No, in my opinion, to set your rates, you start by figuring out what you can sell. You can fantasize about what you’re worth all you want, but go out there and pitch yourself at enough employers and the market will tell you what you’re worth.

    Ideally, if you have the financial means, you start out chasing high paying work and drop your prices until steady work starts coming in. Without financing, you should probably start low, to get some income coming in, and work your way up as you can — but don’t expect first clients to start paying you more. You have to keep chasing higher-paying clients.

    Your living expenses, self esteem, etc. only factor in after the market sets your rate. If you can’t live on the rate you can earn (my situation) or your pride can’t stand being low-paid (fortunately, mine can), then you may have to change careers — or slowly go broke, as I am. LOL

    On second thought, no, all the rest of you competi-…er, I mean writers, just set your rates at what you think you deserve. Good Luck!

    r

  • admin

    Jenn, thanks… glad you like it, got a couple more to go I think… it’s a bigger topic than one thinks at first 😉

    Yes, Mr. Uku, I too think believing I’m worth the money is half the battle, maybe more.

  • admin

    Yes, Mr. Uku, I too think believing I’m worth the money is half the battle, maybe more.

  • For me, the main problem is getting used to asking for the fees. My hourly rate is a lot more than I ever earned in a normal job, because it has to be. I think that as a beginner to the world of freelance, believing that you are worth the money you’re charging is half the battle.
    The other half is holding your nerve and not caving in when asked if you could “come down a bit”. By which they mean they expect you to at least half your fee.
    If you don’t believe you’re worth the money you’re asking for, you’ll never convince anyone else.

  • Amen to that! I feel like I’m constantly struggling trying to help people understand the whole working hours vs billable hours issue. It’s easy to think “I’m making $20 per article, and I can write two per hour, so I’m therefore making $40 per hour.” Unfortunately, that’s just not the way it works, as that doesn’t account for all of the hours you work without being directly compensated. What’s worse is when the clients take this view, not understanding that freelancers don’t just sit down and write non-stop all day. Glad to see you tackling the ins and outs of fee-setting Anne. 🙂

    Jenn Mattern’s last blog post..Do Established Businesses Really Need Web Content?

Leave a Comment

CommentLuv badge

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Translate »