Before you finalize your fees this time (yes, they will change over time) you need to think about what kind of profit you want. Oh, it’s easy to toss this question off with a smart remark like “I want a gillion dollars!” Or, you may be on the other side of the profit equation, particulalry as you look at what’s happened to drive the economy into the tanks, and feel guilty about even thinking of a profit. Neither extreme makes sense.
Dictionary.com defines profit in part as: The return received on a business undertaking after all operating expenses have been met.* That definition does give us a hint. The idea is we’re entitled to something extra after we’ve paid for everything.
Which is just fine, but doesn’t answer such questions as “What’s a fair profit?” Implicit in our thinking about profit is is the question, “How much is enough?”
Part of enough of course, is decent living quarters, good food, health care, for us and our families, and, I think, the sense we can grow old safely. But those numbers actually go into our expenses. They aren’t the return on our business. That return is extra, or more.
Ok, How Much Is Enough?
How much profit should we aim for? As far as I know there’s no reliable formula for profit – at least not for something as amorphous as freelance writing. Writing for clients isn’t like making widgets for them. Nor does freelance writing lend itself to business terms like maximum profits. So we’re stuck figuring out what sort of profit actually works for us individually.
What do we mean by enough? I love what Leo Babauta says in his ZenHabits post Key Question: How Much Is Enough?
It’s a profound piece to read and contemplate. He makes a distinctions between happiness, thriving, being comfortable and survival. Then he brings it together in a way that helps me in many ways, including setting my fees without greed.
Giving Counters Greed
I think that’s what most freelance writers want – enough without greed. One way I think about it is to include giving in my expenses. Each year I set a percentage of my income that I will give that year. As my income has increased, so has that percentage. It’s an interesting exercise.
Each person’s number will be different, which is how it should be. It’s important, however, that, as a freelance writer, you work out what that number is for you. It may well be at first it’s just a goal, but without it you won’t have anything to aim at.
On the other hand, you may be delightfully surprised to discover you really are worth that amount and begin not only asking for it, but getting it.
By the way, you might want to read Leo’s book, Power of Less, The: The Fine Art of Limiting Yourself to the Essential…in Business and in Life.
Image from http://www.sxc.hu
* Modern Language Association (MLA):”profit.” The American Heritage® Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. 03 Mar. 2009. <Dictionary.comhttp://dictionary.reference.com/browse/profit>.