Setting rates is one of the hardest things about starting a freelance business. When I first started out, grabbing any job I could, I just took whatever rate the client was offering if I thought I could do the job. When I launched PurpleInkPen, I was wiser about rates, but I had decided to raise mine from beginner fees to professional fees. I had my website ready except for one little thing that kept me from hitting the publish button. I knew I wanted to charge professional rates, but the pricing range is still widely varied. I didn’t want to launch the site until it would boast rates that actually gave me a nice return for my work.
The first thing I had to realize was that just because I published a rate on my site didn’t mean it was the only rate I’d ever get. The beauty of a website is that you didn’t just print out a million flyers with the rates set down in ink; through the power of the internet, you can reach tons of people through an easily editable platform. I’ve toyed slightly with my rates a few times since May; nothing drastic, but I adjusted a few prices after I began calculating my actual hourly rate.
That’s the second and even more important thing I had to learn how to do. For my editing work, I had already calculated and set hourly rates to go along with my per page rates. This method helps some people get a better deal, and I use that as a selling point (if someone’s manuscript has been edited many, many times already and is very clean, the hourly rate helps them save a little bit of money because I can breeze through the manuscript without being bogged down by tons of edits). However, for my writing work, I didn’t bother setting hourly rates because they’re just too finicky and they scare clients. But just because I don’t have an hourly rate listed, that doesn’t mean I shouldn’t be thinking about my hourly rate for each job I’m doing.
For every job I do, I time myself, add up the cost of the work before I send it off to the client, and then divide to calculate the hourly rate for that project. The concept is so simple, yet I never thought about it until reading Kelly James-Enger’s Writer for Hire. Doing this one simple step can help you decide whether or not to take a job, continue working for a particular client, or boost your rates.
Let me give a real life example. I’m currently trying to determine if my newest job is worth the time I’ve been putting into it. For this job, I’m writing a history book of sorts for high schoolers on the life of the famous architect Frank Lloyd Wright. Now, I don’t get royalties on this book, but my name will be on it as the sole author, which is pretty cool. I’ve calculated how much I work on it each day on average and divided that by the payment I’m getting. It comes to an hourly rate of $17.50. Now, that’s better than the hourly rate my husband gets at his full-time job, but this project is not a full-time steady job for me. It’s also a very small rate compared to what I make for a typical ghostwriting job where I don’t get credit. The current ghostwriting job I have now calculates to an hourly rate of about $40 an hour, sometimes more. Now that rate sounds great to me, and I’m happy with it, but it’s still small compared to what other ghostwriters make. I plan to raise my rates in the future, but right now, I’m building my professional reputation as a ghostwriter who actually writes sellable books. Back to the Frank Lloyd Wright book. I’m still torn. It’s not a terrible hourly rate for regular writing. However, I’d really like to know how much this small publishing company makes off these books they commission so that I can take into account how much money I’m missing out on. Once I have that information, I will know for sure if continuing projects with this company is worth my time. For now, I’m thinking that it was well worth this first try. I will have a real published book! The boost to my professional reputation is well-worth the time and effort without the extra royalty money (at least this once). However, at this moment I’m not planning to continue work for the company (at the current rate) after I’ve done everything I’ve already agreed to. If they want me to keep working with them after I’ve completed all my current obligations, I will need to negotiate a new rate that takes into account how much they are making off me compared to how much I make for writing it, even with my name on it.
See how important that one simple calculation can be? As your own boss, you need to think about your return on investment of your time. An hourly rate that sounds good at a regular full-time job isn’t going to pay a freelancers bills (at least not by itself) because you won’t put in full-time hours. My husband works ten hours a day at his hourly rate. I work on each of my projects for one to two hours each. See why I need a higher hourly rate on individual projects to make a full-time income? If you’re ever in doubt about whether a job is actually worth your time, calculate your hourly return. If you do this for every job, you will begin to learn how long it takes you to do certain tasks and gives you a better idea of what rates you need for each project so you only pick good clients with good rates from the very start.