This is Part 2 of charging and invoicing for your writing. Part 1, Let’s Talk About Invoicing and Invoices for Freelance Writers is here.
Hourly Rates, Flat Fees, Retainers are the three most popular ways freelance writers get paid, at least in the U.S. There are advantages and disadvantages to each.
As you’ll see, I’ve got my prejudices; I’ll tell you what they are and why I feel the way I do, promise.
What you want when setting rates
As a freelancer in charge of your own business you want first of all to be sure you’re charging enough to cover all your expenses and give you at least some of your wants, if not most of them. If you’re having trouble charging enough take a look at the whole Money Issues category – I suspect you’ll find some help there.
You also want enough clients so you’re making a decent living. And you want to set up a system so you’re invoicing your clients regularly.
Of course, this happens all jumbled together, not in distinctive steps.
What your clients want
Your clients mostly want to know what to expect when it comes to paying you. Sure, they want a fair price, whatever that means and they want to be able to predict with the service you’re offering will actually cost them.
Fair price really has only one definition in my mind – a willing buyer and a willing seller. So if you’re happy with a penny a word (please don’t be) or $5 a blog post (please don’t be) and that’s what you’ve negotiated, you’ve got no call to complain. In a similar vein if you offer blog posts at $5 or $10 a word or more and a client agrees, they are not getting ripped off. Do you see why I say there is no such thing as a standard price?
It’s a good idea to include how you’ll get paid, both how much and how often you should invoice in your written agreement.
Of the three choices, hourly rates, flat fees, retainers, hourly rates are probably the most popular. In its simplest terms you choose how much you want to earn for each hour you’re actually working. Yes, that includes trips to the restroom and for more coffee. It doesn’t include naps or the hour you spend talking to your beloved. It may include time researching or other time spent as long as it’s specified pretty clearly in your agreement with the client.
In order to be fair with hourly rates you’ve got to track the hours you’re working. You can do this on a piece of paper, by entering time start/time end in a spreadsheet or by using a program like toggle.com. It’s free and will let you set up projects and even send you a weekly report. I find it’s far better at adding up a column of figures than I am.
Check our Jenn Matterns’ Hourly Rate Calculator to get some help.
Freelance writing for flat rates
Years ago I supplemented my writing income by cleaning second homes for a gal who had such a business in a nearby resort area. The pay rate was decent, except it was hourly. It didn’t take me long to realize that the more often I cleaned a particular home, two things happened. I got better at the task which meant I was spending less time at it. That meant the better I got at the job the less I was paid. The same thing often happens on a salary that isn’t tied to company earnings.
The solution is to charge flat rates. If I charge $250 to do two blog posts a month, the first month or so it will take me much longer than the next month or two. After half a year my actual hourly rate has improved because I’ve gotten so much quicker at it. Instead of being penalized for getting better at my job, I’m rewarded.
The trick of course is to be able to do a decent estimate of how many hours it will take you to do the job well. Experience is what teaches you that. Timing your writing as above also helps. Base my rate on how many hours at what hourly rate I want, then add 10 percent and round the total up or down.
I know what I’m going to earn and the client knows what they will pay. Sweet.
Writing on retainer
Essentially, the client pays you in advance for a specific amount of writing, usually monthly. For example, a company might agree to pay me $1,000 a month for 4 blogs of about 500 words each. They agree that the CIO will give me the specific info, title, SEO terms, person to interview two weeks in advance of each post. If the CIO only gives me what I need for say two blogs one month, I’m still paid the $1,000.00. One way to look at is they are renting my availability.
Literally any time of writing can be contracted for with a retainer. It’s probably best used for assignments that repeat or that are huge and on a more or less single topic. A better way to put it might be to say you want to agree to something specific and not get trapped having to write an ever growing project. Limiting the amount of writing you do to a number of words or pages is an approach that works.
The advantage to you is obvious. You get paid even when you don’t write. Plus you know you’ve got X amount coming in each month.
The advantage to the client is that they retain access to you and your writing ability. Generally they know they’re going to need a writer often for the next quarter or whatever time period but they can’t quite get a handle on how much writing they will need when. This way, instead of each piece you write being a separate transaction, they know they’ve got you for a specified period of time.
There are all sorts of approaches and reasons for writing by retainer including selling a subscription. This is outlined in The Ultimate Guide To Retainer Agreements. There are a ton of good ideas there.
So, should you charge hourly Rates, Flat Fees, Retainers? The answer is , well, ‘yes’!
Write well and often,