It's past that time of year where we answer the age-old question Can I make money writing? with a sample annual income report.
This report first came about due to the multitude of questions about the potential income in this career. It is also thanks to a few brave souls who were willing to share their freelance writing business records with the audience. We've got an income report from 2009, 2010 and 2011.
In this year's report, we take a look at four main categories of information: client load, hours logged, income, and expenses.
Let's start with what kind of organizations and companies this writer served. The records showed that the writer had a total of 13 clients (hope he's not suspicious!). Of those, five were established, ongoing clients from 2011. The other eight clients were technically "one-off" projects-that is, they were single projects contracted for and finished with no other retainer or agreement in place for ongoing work.
This writer's 13 clients naturally sort themselves into only six categories, with the provision of web copy and blogs being his main source of work. It is interesting to note that this year's writer doesn't seem to provide any complementary services, such as translation or social media management.Below is a list of the 13 different clients as denoted by work type/project. I've also noted if the client is an ongoing contract, or just a project:
- Book editing- two clients, both short-term projects for independent or pre-published authors
- Book reviewing- two clients, both ongoing contracts, but sporadic
- Curriculum development and writing- one client, one large project
- Magazine (print) editing- one client, ongoing
- Marketing copy- two clients, one ongoing contract, and one with a limited project
- Web copy or blogging- five clients, two were limited projects, while three are ongoing contracts
Freelance Writing Business - Hours Logged
Our example writer spent 1,301 hours on their writing business in 2012. Hours logged include not only writing and editing, but also administrative time, completing tasks such as marketing, traveling, attending meetings and answering email. To compare this work load, think about the fact that a full time, 40-hour-per week job is generally 2,080 hours per year; our example freelancer worked about 60% time. But where exactly do those hours go?
- Administrative tasks (such as invoicing, marketing, meeting and so forth): 245 hours
- Book editing, self-published author: 13.5 hours
- Book editing, pre-published author: 77.5 hours
- Book reviewing, print magazine: 3.5 hours
- Book reviewing, website: 11 hours
- Curriculum development and lesson plans creation: 339 hours
- Magazine (print) editing: 166 hours
- Marketing copy, new store: 7.5 hours
- Marketing copy, external communications for private firm: 200 hours
- Web copy/blog, marketing company subcontract: 7.5 hours
- Web copy/blog, web portal: 200 hours
- Web copy/blog, culture blog guest posts: 5.25 hours
- Web copy/blog, online trade magazine: 9 hours
- Web copy/blog, online special interest magazine: 16.25 hours
Of the total 1,301 hours worked, this writer spent about 20% on administrative (non-paid) work hours. That means a full 80% of his hours were billable hours. An article from last month regarding billable versus non-billable hours said that a goal of about 65% billable hours is good. So this writer's balance is definitely great. I wonder if the high number of long projects and repeat customers meant that he had to spend a lot less time on marketing or job seeking than other freelance writers.
How Much Money Can a Freelance Writer Make? Finally, the Income
This sample business generated a gross total income of $74,810. Keep in mind, though, that this writer had expenses to pay, so this number is not the actual profit that the writer pocketed into his personal income. Let's see who paid this writer in 2012! (Note that I've left the total hours for each project within the bullet point so that you can gauge an approximate hourly rate.)
- Book editing, self-published author: 13.5 hours, $700
- Book editing, pre-published author: 77.5 hours, $5000
- Book reviewing, print magazine: 3.5 hours, $500
- Book reviewing, website: 11 hours, $350
- Curriculum development and lesson plans creation: 339 hours, $19,950
- Magazine (print) editing: 166 hours, $8,640
- Marketing copy, new store: 7.5 hours, $500
- Marketing copy, external communications for private firm: 200 hours, $14,000
- Web copy/blog, marketing company subcontract: 7.5 hours, $700
- Web copy/blog, web portal: 200 hours, $23,600
- Web copy/blog, culture blog guest posts: 5.25 hours, $100
- Web copy/blog, online trade magazine: 9 hours, $270
- Web copy/blog, online special interest magazine: 16.25 hours, $500
Those are some interesting numbers, aren't they? But, again, we have to give everyone else their cut, too. Let's see where the expenses lined up for this particular writer.
Freelance Business Expenses
While it's true that freelance writing is one of the cheapest businesses to get a start in, as all you truly need for your very first gig is a computer, the fact is that our expenses also grow in proportion to our maturing business. This writer had about $17,000 in expenses ($74,810 gross-$17,000 expenses = $57,810 in profit).
Let's see where it hurts for this writer.
(Side note: these are actual payments that this writer made or anticipates making in the course of running his business. However, when he does his taxes, he will likely be able to reduce the amount of income he has to pay off of by adding some expenses that we don't talk about here. For example, he can deduct some of the cost of his home link heating and electricity, as he has a home office. He can write off some of his cell phone bill, as he uses it for business, and so forth. For more information, see About.com's portal on taxes. In addition, this writer could potentially write off gobs of health care costs, were he to purchase his own insurance. As it is, he is insured through his partner.)
- Contractors (virtual assistant and a proofreader), $3,000
- Fees (bank fee, paypal fees, business filing fees), $350
- Taxes (paid and one more payment anticipated), $10,000
- Travel (conference, meetings), $1,000
- Office supplies and equipment (includes the purchase of a laptop), $1,200
- Legal and professional services (technology and accountant), $1190
- Marketing (web services, print materials), $165
- Food (during meetings), $95
Wrap Up- How Much Money Can You Make as a Writer?
As you can see, this writer pocked about $50,000 in profit as a freelance writer. We know he put in about 60% of full time schedule. If this writer worked full time, could he pull in $80,000 or more? Quite possible.
Want to keep your own tabs and perhaps volunteer your report next year? Although there are many software programs out there that make keeping your small business records easy, you can also get started with my example Excel template, which is housed in our forums here at About.com Freelance Writing.