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.
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