There are many ways you can charge for your time and skills. It all depends on what works best for you and your client. The most common way to charge is either by the word or by the project. However, you can also charge by the page or by the hour. Each option has its own set of benefits and drawbacks.
For instance, charging by the word may seem like the best option until you run into the problem that many writers have of publishers only paying for each published word. So that 1000 word article you slaved over for days gets edited to 750 words and at $0.10 per word that’s a $25 difference. Enough for a week’s worth of lattes. Shameful!
The way I came up with my rates is I decided how much I wanted to make per hour and then provide a quote based on how long I thought it would take me to complete a project. While possibly the simplest and easiest method to figure out a rate scale, it really doesn’t take into account the whole picture. Other costs of doing business, such as tax obligations, the cost of healthcare and office supplies, should be factored in.
The best way to come up with rates is to first crunch all the relevant numbers so that you end up with a yearly total. For example, say you want your freelance business to replace your current job in which you are being paid a yearly salary of $36,000. Since your plan is to leave your job, any health insurance benefits you are receiving from your employer will have to come out of your pocket, so add to that total an estimation of the cost of insurance premiums for a year.
Once you’ve got an estimated total, you must now figure out how many working hours you have available to you. How many hours per day are you are willing to work? How much sick time do you think you will need? And how many vacation days do you plan on taking per year? For the sake of simplicity, say you are shooting for a forty hour work week, you are never sick and because you are doing what you love (writing) every day feels like a vacation thus negating the necessity for one. That will give you a total of 2080 hours for the year.
Now it’s time to break out the handy dandy calculator. Divide the yearly salary amount by the number of hours you have available to work and you will end up with an hourly rate. So a salary of $52,000 per year divided by 2080 hours will come out to $25.00 per hour.
With this information in hand, you can now calculate a per word charge. Estimate how long it would take you to write a 1000 word article. Multiply that estimation of hours by your hourly rate and divide the total by 1000. For example, if it takes you 4 hours to write a 1000 word article, the total would be $100. $100 divided by 1000 equals $0.10 per word.
Other things to consider when deciding your hourly rate:
1. The minimum suggested rate you want to charge for a piece is $0.10 per word as per recommended by the National Writer’s Union.
2. What will the market bear? This is the only time you really want to consider what other writers are charging. You don’t want to charge too low or you may be perceived as being inexperienced or of low quality. Conversely you don’t want to charge too much unless you have the skills to back up the rate. Be prepared to prove you are worth the extra dough.
3. What rights are you selling? If a publication wants exclusive rights for all time, you are perfectly within your rights to demand more for the privilege as you will not be able to sell the work anywhere else. On the other hand, if the publication is only looking for one time rights, then you can charge a little less because you will be able to sell the story to other publication at a reprint rate.
4. Having an established rate will help you determine whether or not an opportunity is worth pursuing or not. It would be a good idea to have a deal breaker rate (a rate that you will not work for less than) and a discount rate for good, repeat, consistently pays on time customers.
5. As your experience, expertise and reputation grow don’t be afraid to give yourself a raise every once in awhile.
Despite the math, figuring out what to charge isn’t an exact science. Feel free to make any appropriate adjustments. Next we are going to look at how to avoid turning your hard earned cash over to scammers and fraudsters.
Just in case you missed any, here’s a list: