After being asked about writer's rates three times in one day, I knew it was time to share my process with readers. Here's how I went about setting my rates.
First Things First: By the Hour or By the Project?
Freelance biz-tech writers can either charge by the hour or by the project. I recently read that one fallacy of charging by the hour is that you essentially cheat yourself out of money if you really get the hang of a project, or find sudden inspiration, and cut your time significantly. I think this is an excellent point, but with two caveats: many customers like to go by hourly rates, and you should know your minimal hourly rate, anyway. Knowing this will help you set your per project rate.
Dig Out Hourly Information From Past Employers
What worked for me, having been employed as an editor and marketing writer in a past life, was to use my hourly rate as a jumping off point. Now, the fact is, your employed hourly rate is generally a very small fraction of your true earnings. Therefore, it would be ideal if one had access to their employer's “total compensation” numbers. You may be able to get such a thing from a former HR department. This "true compensation" number will take into account benefits such as retirement matching and insurance premiums paid.
Another thing to keep in mind is that your employer provides the roof over your head, your computer system, and all your office supplies. These are things that a freelancer must provide for themselves. Therefore, let me reiterate that your former hourly wage should most likely be your minimum as a freelancer. An exception is if you were an engineer, or some other such highly paid profession, who is “starting over” with no writing experience under your belt. You may not want to demand $80 an hour for your first writing job!
Start From Scratch
If you have no past employment, or simply cannot get ahold of such numbers, you’ll have to start from scratch. Let me give you three resources with which to begin.
Freelance Switch offers a handy salary calculator that I think everyone should use at least once. This calculator takes into account your overhead, number of billable hours and other highly personalized factors. It will calculate a minimum hourly rate and an ideal hourly rate. Don’t get excited by the high number, this isn’t what you’ll actually make, but what you can bill a client for your time spent on their project. Remember that your billable hours will generally make up only 20% to %60 of your total working hours.
A second resource for setting your rates is also at Freelance Switch. Their survey of over 3,000 freelancers (in all fields, not just writing) includes some average billing figures, matched up with experience and education level.
A third resource is through the Editorial Freelancers Association. I recently blogged about EFA's benefits of membership, but you can access their average rates page without being a member.
Use Your Hourly Research
Once you’ve come up with an estimate on your hourly rate, you can parlay that into a per project fee scale.
You’ll want to think about the kinds of projects you’ll be asked to take on, and estimate how many hours it will take from start to finish. For example, I can generally write a press release in about an hour and a half, depending on the industry. What kinds of writing will you be churning out? Web articles? Newsletters? Website content? Estimate your hourly undertaking, and adjust it as you go along!
Speaking of Adjustments…
You’ll need to continue to adjust your fees, especially as you build more clips and credits. I’d suggest revamping your rates every 3-6 months.
