Freelance Rates – Part 3: Setting Freelance Writing and Editing Prices
May 3, 2010 by Lillie
Table of contents for Freelance Rates
We’ve talked about recognizing your worth as a writer or editor, and we’ve looked at whether to charge or hourly rates. Regardless of what you are going to quote to your client, you probably want to begin the process of setting your rates by coming up with an hourly rate. Then you can convert that rate to a project rate based on how much time a given project will take.
Determine how much money you want to make:
- Determine the income you need to pay your living expenses and have something left over for savings and investment.
- Remember that you will have to pay both the employer’s and employee’s share of your Social Security as well as cover your insurance, vacation and sick time, and any other benefits you were accustomed to as an employee.
- Although you will need to make more money than you would as an employee, be realistic. If you are just beginning as a freelancer, you shouldn’t expect a six-figure income.
Allow for business expenses:
- Account for business expenses such as your computer and office equipment, Internet service, telephone, office supplies, legal and accounting fees, and marketing.
- Think about the possible future need to hire employees or subcontract work to other freelancers, either because you have more work than you can handle or because you are unable to work if you are ill or face a family emergency.
Decide how many billable hours you can work:
- You earn money only when you are doing client work, but you also have to perform administrative and marketing tasks.
- The amount of time you devote to client work will likely be half or less of the time you actually work.
Calculate your fees:
- Add your the annual income you need to receive, your anticipated annual business expenses, and the amount you want to save/invest each year.
- Figure the number of weeks you will work in a year: subtract the number of weeks you want for vacation, sick days, and holidays.
- Determine the number of hours you can bill per year: multiply the number of hours you work per week by the percentage of time that you can bill to the client by the number of weeks you will work.
- Divide the total income you need by the number of hours you will work during the year to arrive at your hourly rate.
- Compare the number with typical rates (for editing rates, see the Editorial Freelancers Association). If the rate you calculated is outside the typical range based on your skills and experience (either high or low), review your calculations and see what parameters you can change. Keep experimenting until you come up with a number that you are comfortable with.
- If you have decided to charge a flat rate rather than an hourly rate, simply estimate the time required for each type of project you do and convert the hourly rate to a project fee.
- Review your rates regularly, at least once a year or more often if you are new to freelancing, and raise them as your experience merits.
Get paid your desired rate:
- Exhibit self-confidence when talking with clients. If you act like you don’t deserve your fee, the client will probably agree with you.
- Be prepared to demonstrate your worth to the client. Show samples of your work; explain your unique skills and expertise that set you apart from other freelancers; do as I do and give a short sample edit.
- Never negotiate out of desperation. If you choose to discount your work during slow times or for certain kinds of projects, do so because it’s in your best interest or because you want to do a good deed for a favorite charity, not because a client intimidated you or because you are in a panic about lack of work.
- Be willing to walk away from projects that will hurt your future. Only you can decide the minimum compensation you will accept for your work based on what is best for you, your business, and your family. Just remember that when a client chooses you because you’re the cheapest, they are likely to walk away from you if they think they save a few pennies somewhere else. Passing up a project like that may give you the chance to find long-term clients with higher-paying work.
Calculators To Help You Set Your Rates:
- Freelance Hourly Rate Calculator, Jennifer Mattern, All Freelance Writing
- Hourly Rate Calculator, Freelance Switch
More Advice on Setting Freelance Rates:
- Guide to Setting Freelance Writing Fees, Jennifer Mattern, Business.com
- How Much Should I Charge, guest article by John Carpenter, About Freelance Writing
- How to Set Your Freelance Rates (An Overview), Laura Spencer, Freelance Folder
- Setting Fees, Anne Wayman, About Freelance Writing
- Setting Freelance Writing Rates the Right Way, Jennifer Mattern, All Freelance Writing
Thanks for mentioning 2 of my posts and our freelance rate calculator Lillie.
.-= Jenn Mattern´s last blog ..Freelance Writers: Dance the Day Away =-.
Thanks for creating such great resources, Jenn!
Thanks for the links and the additional resources Lillie… you’ve done a great job.
.-= Anne Wayman´s last blog ..Write! =-.
Thanks, Anne. I appreciate all the great information you regularly provide on your blog.
Hey thanks for posting such relevant info. Even I work as a freelancer and couldn’t really make up how to fix the charges for my client and how shall I master in my field. But your 3 blogs are really helping me in my work..
Anderson,
Glad the freelance rates series was beneficial for you.
Thanks for a great post.
Several freelancers esp newbies tend to get confuse on this part.
Bernice,
It is difficult for beginners to know how to price their work so they are making money without pricing themselves out of the market.
I have to agree with everything you say, Lillie. I am a freelance copywriter and I’ve been doing this for about two years now, so I know what I’m saying.
.-= Memo´s last blog ..How to play golf =-.
Memo,
I’m glad you concur with my observations.
Lillie,
A very well thought out summary – a CPA couldn’t have said it any better and the fact that you are speaking from years of experience really shows through here.
Having never been in the industry myself, I cannot comment from experience, but I would imagine that many freelance writers have a tendency to underestimate their operating expenses when starting out and thereby end up with quotes which are too low, a problem which I would imagine is common amongst small business people in many industries.
.-= Andrew´s last blog ..My take on Goldman =-.
Andrew,
Thank you for the lovely compliment. I think you’re right about new freelancers often misjudging their expenses. If they have always worked for a company, they often have no idea of what it costs to run a business and provide a service.
Thanks for sharing this. I am also a freelance writer and reading this kind of article is very helpful for me.
ash,
I’m glad the article was helpful.
I’ve just finished reading the 3-part article and I find it very helpful. I’ve been working as a freelance writer, editor and SEO specialist for a long time, yet I never tried charging my clients with hourly rates. Well, I do find it tricky at times, as from what you have said on the second part, it really depends since some projects can be done in just hours or worse minutes and will eventually make your hourly payments lower than expected. But I’ll definitely try some things that you’ve pointed out here. Thanks for sharing these tips.
Jason,
The ideal situation would be to quote a project fee based on your hourly rate and the estimated time to complete, then finish the job in half the time!
will certainly do that
thanks lillie!
You’re welcome, Jason.
I did the same mistakes of misquoting my expenses when I was just starting doing freelancing. I learned from that mistake the hard way.
.-= Carol@Woodlands Divorce Lawyer´s last blog ..WoodlandsDivorceLawyer.com Launches =-.
Carol,
A lot of freelancers—and other small business owners—make the same mistake and learn the hard way. If you have always worked for someone else, you have no way of knowing all the expenses involved in running a business.
There is so much more to take into account than just what an hourly rate pays you over a certain time period. You must take in to account the costs involved in running your own business, the periods where you may not be earning, unexpected bills created by no longer working in someone elses office etc.
Matt,
I hope you are agreeing and reinforcing what I said—not implying that I didn’t mention those things.
Last week I had a meeting with our accountant, he suggested a couple of solutions to tackle our requirement to hire new staff within our small web design business. He suggested we hire freelancers rather then employ. Your article has helped me understand freelancer rates. Occasionally we hire writers but usually for invoiced projects to write optimised text to accompany a new web design. I have always had an idea about what freelancers should receive in pay rather then what they need to pay the bills. Funny how reading one article post helps change a long term view.
Alec,
I’m glad the post gave you a new perspective. Freelancers should make adequate compensation for their knowledge and skills, and clients should receive value commensurate with what they pay.
Learning how to set fees for freelance writing projects can be confusing especially for the beginning freelance writer. When I first started my freelance writing business, I had no idea what to charge, so I looked online at websites of other writers. Not many of them posted their fees on their website and now I know the reason. Fees must be set by the project after taking many factors into consideration.
Aiping,
I’ve also noticed that most freelancers don’t post their rates. I post my hourly rate because I personally don’t respond when I don’t have any idea about the price. People still have to get an estimate for the price of the overall project, but they have some context.
Sorry to post again on the same subject but wow Lilli, parts 2 & 3 make that first post even better
) This is a prodcut in itself.I just hope people actually take action on it.
You’re a star.
Dave.
Thank you for the effusive compliments, Dave!
Lillie,
This series is an excellent resource. I wish I’d had something like this to guide me when I started out. Will be sending other freelancers your way. : )
PJ,
Glad you find the information useful and appreciate your sending folks this way.
Lillie, when I first started freelancing I went about things completely the wrong way,by being a ‘part-time’ freelancer I was flattered by the offer of paid work outside my usual hours, I was always offering ‘friends rates’ so it was difficult to get my rate to where I thought it deserved to be. I eventually stopped working for close friends, I had to ‘clear the decks’ and start afresh when I began fulltime freelancing, I just wish I’d seen this article earlier.
Mike,
It’s a common mistake to undercharge when you first start freelancing or start a small business. People who go into business doing something they like and are good at aren’t necessarily knowledgeable about business and generally underestimate the value of their time and the costs they will incur. Good for you for clearing the decks and getting it right.
Great work Lillie, I really appreciate you.
Thank you, Tim!
These tips mentioned in your blog post are very helpful and a lot of them can be used for several different fields. Definitely something to keep in mind when freelancing.
John,
Yes, many of the tips have applications to other situations as well.
I am just going to start freelancing so this blog has given me some extra tips. Setting the prices are the most important thing I guess.
Adam,
Setting prices is one very important element, but there are other steps to starting a business that are equally important. You need to decide what you are going to specialize in (or if you are going to be a generalist) and who your target is and how you will reach them. You need to establish a portfolio to have samples to show to potential clients (even if the samples are items that you wrote for charity or even wrote as samples if you don’t have published clips). There are some excellent blogs and sites with information on starting a freelance writing business.
I have been freelancing for around 6 months and have found your tips helpful. Keep it up
James,
Glad the advice is helpful. Best wishes for great success in your freelancing endeavors.
[...] 3-part series from Lillie Ammann is dedicated to the topic of freelance [...]
Rates are too low, i am writing for international customers but they also give me very low rates so i need to know how can we maintain good quality work in writing.
sana,
You have to set your own rates and hold out for clients who will pay them. It took me years to build up my clientele, but now most of my work comes from existing customers and referrals. My clients are willing to pay my rates because they have come to know the quality they receive.
@Lillie I am responding on the behalf of Sana, yes she is right we are working together as freelance writers, they people not gave us very good rate that’s mean not suitable for high class content writing after good research. I hope you understand my point of view now. we have also decided to start our own blogs, used laptop pk and used mobile pk.
Maya (and Sana),
One of the biggest problems for writers who aren’t native English speakers is not knowing idioms and often constructing sentences in the manner of their native language rather than in the manner of English. You may want to really focus on those two aspects of writing in English to enhance the value of your writing. Believe me, I couldn’t write anything in another language, so I admire anyone who can write in a second language. However, those who do need to really work on sounding like a native English speaker so the writing flows naturally in English. Your blogs are a good idea–you can get writing experience as well as gain exposure. Good luck!
I think determining what you want to earn is a great start, but you have to take into account the going rate for your services as well. Unless you provide extraordinary value that no one else can duplicate, if you charge much above this going rate, potential clients will just hire the other person.
Leo,
I agree with you totally and covered this in other parts of the series as well as in the step above that says after you arrive at what you want to charge, compare the fee with other typical fees to be sure you’re in line.