Freelance Rates – Part 2: Hourly vs Project

Some freelancers prefer to charge by the hour; others offer flat rates for specific projects.

There are advantages and disadvantages to both, and some jobs are better suited to one than the other—the scope of some projects can’t be easily defined, making a project fee difficult to determine. Your market may dictate how you charge. Many business clients prefer a project fee because they want to know exactly how much to budget.

Reasons to charge a flat fee:

• Both you and the client know exactly how much the project will cost.
• Many clients prefer a flat fee because they need to budget for a total amount or they fear being overcharged by a freelancer who drags out the project to generate more billable hours.
• You can earn a higher hourly rate if you are efficient and get the job done quickly.
• You don’t want clients to look at you as an employee who trades time for pay; you are running a business that charges fees for services.

Reasons to avoid charging a flat fee:

• If you under-estimate the scope of the job, you can spend a lot more time than you are being paid for.
• Some clients prefer an hourly rate because they have no idea if your project rate is reasonable.
• The work is so unstructured or indefinite that you can’t determine a fair price.
• The client takes an inordinate amount of your time in phone calls or e-mails, or the client expects more than you anticipated.

Reasons for charging an hourly rate:

• You will be paid for all the time you put into the project.
• The project is difficult to price at a flat rate because the amount of work can’t easily be determined in advance.
• Professionals, such as lawyers and accountants, charge by the hour.
• Some clients may prefer an hourly rate to help them decide if the price is reasonable when they have no understanding of what is involved in what you do.

Reasons for not charging an hourly rate:

• You must track your time and keep accurate records.
• Clients may not accept an hourly rate because they have no idea how much the total will be or they fear that freelancers will waste time in order to increase the cost.
• Your income is limited to the amount of billable hours you can work rather than the number of projects you can do.
• You will make less money if you become more efficient and can do the project in less time.

How I Charge:

For most of my regular clients, I charge an hourly rate because I work with them on an ongoing basis rather than completing finite projects. I keep a running tally in 15-minute increments and bill monthly for the accumulated time. There’s never a discussion of cost (except when I raise my prices)—the clients know they will be billed at my hourly rate for anything I do, whether they ask me to do it or I initiate it myself.

For example, if I learn of a new book promotion Web site, I e-mail by author clients and ask if they would like to be listed. Most of them will tell me to do what I think is best. I register with the site for them, submit their bios, book covers, blurbs, and anything else required, and let them know when they’re listed.

When I’m working with a self-publishing author, I may do any or all of the following: edit the book, lay out the interior, contract with a cover designer, create the back cover blurb, negotiate and contract with the printer, send advance reading copies to reviewers, get the ISBN and bar code, create a Web site with a shopping cart, write and submit a news release, register the copyright … And clients may publish more than one book, so I’m updating their Web site/blog during the same time I’m editing a new book and looking for promotional opportunities for the last book. Rather than setting a price for each step of the process, I simply keep track of the time and bill them at the end of the month.

On the other hand, if a new client just wants a resumé or a news release, I will quote a flat rate. I can turn a project like this around quickly and charge more than I would earn at an hourly rate.

For new editing clients, I do a free sample edit so the client can see if they like what I do and so I can get a feel for how much work is involved. Many of my clients are great storytellers but not-so-great writers, so it’s difficult to determine a flat rate for editing a book. However, I will give them an estimate based on the sample, with the proviso that if the rest of the book requires more work—because they sent me a sample that had been self-edited more thoroughly than the complete manuscript or because there is a major plot or other problem that shows up later, I will re-negotiate the total cost. The author knows what to expect for the total cost, but I am covered in case of unpleasant surprises. 

Other Opinions:

• Do You Quote by Hourly Rate or Flat Fee?, Peter Bowerman, The Well-Fed Writer Blog
• Flat Fees vs. Hourly Rates: Do Both at Once!, Anne Bingham, Writer’s Weekly
• The Great Debate: Flat Rates vs Hourly Rates, Susan Johnston, The Urban Muse

In the next, and final, installment, I’ll go into more detail regarding how to actually set your rates.

Freelance Rates – Part 1: Determining Your Worth as a Freelancer

“Freelance editing rates” is consistently the most popular search term that leads people to my blog. Because of that interest, several months ago, I conducted and publised the results of a freelance rates survey.  Freelance rates are the source of continuing debate, and the results of the survey showed rates ranging from less than $5 per hour to $150 per hour.

You want to earn what you’re worth, but you want to be competitive and not lose jobs because your price is too high. So, how do you decide what to charge? In this series, I will cover your worth as a writer, hourly vs project fees, and calculating your fees.

To begin, you will want to gain an understanding of your worth as a writer or editor.

• Consider your experience level. If you are just beginning as a writer or editor, you can’t expect to make as much as someone who has been working in the field for twenty years. You can charge more if you are exceptionally knowledgeable about a subject or have additional skills that the client needs.
• Consider the going rate for the work. The Editorial Freelancers Association publishes a chart of typical editing fees. This will give you a typical range; for example, the range for basic copyediting is $25 to $40 per hour. You probably want to be at the lower end of the range if you’re a beginner and the higher end of the range if you have more experience.
• Consider your market. If you choose to write in certain markets, you can expect very low pay. If you write for magazines and many other publishers, you often don’t have much say in what you are paid. If you are in a specialized market, you can earn much higher rates.
• Consider the value of the work to your client. Most of us tend to think in terms of what it takes to do the job, but our clients look at the value to them. One business client tells me often that she doesn’t mind paying my rate because she saves money by hiring me—even though she pays me several times what she pays her employees, they would spend all day doing what I do in an hour or two and the end product would not be as good.
• Consider your costs of doing business and your income needs. Freelancers often make the mistake of charging the same hourly rate they earned as an employee. However, as a freelancer, you have business expenses that an employee doesn’t have, and you can bill for only a fraction of the total number of hours that you work.  

In the Volume X, Issue 47 (October 5, 2009) issue of his newsletter, Jim Blasingame, the Small Business Advocate, gave this advice to entrepreneurs selling professional services:

You should think of your hourly rate like renting a car at a rate of $60 a day. That works out to $1,800 a month for a car that you could finance for $350 a month. But you understand that you’re paying a premium because you have a temporary transportation need, the rental company delivers the product and service just in time and you give it back whenever your need has been fulfilled, without further obligation. No muss, no fuss, almost exactly like when a client “rents” your professional services.

As a professional for rent, the services you provide and the resource that you are to clients means they don’t have to adopt you like an employee. They can rent you and send you on your way until they need your “product” again.

Here are other resources that you may find helpful in determining your worth as a freelancer:

• Assessing Writing Projects – A Guest Article, T.W. Anderson, About Freelance Writing
• Defending Your Prices, Jennifer Williamson, Catalyst Blogger
• The great freelance rate debate continues, Michelle Rafter, Word Count
• Why You’re Not Cheap, Lori Widmer, Words on the Page
• Writing Pay – How Low Will You Go?, Dana Prince, Get Paid to Write Online
• You Want Higher Freelance Writing Rates, But do You Deserve Them?, Jennifer Mattern, All Freelance Writing

In the next installment, we’ll discuss hourly rates versus project fees. Then in the final installment, we’ll go into more detail on setting prices.

I look forward to your comments on determining your worth as a writer as well as any questions you have about setting freelance rates.

Freelance Rates Survey Ends Next Week

I’ve been running a freelance writing and editing rates survey for several weeks but haven’t had a great deal of response. My goal is to have statistically significant information for my two-part series scheduled for the third week in November.

The survey is anonymous, quick, and easy. There are only six multiple-choice questions:

How long have you freelanced part-time or full-time?

What kind of freelancer are you—writer, editor, both?

How do you find freelance jobs?

How do you price your work—hourly, project, bid, etc.?

What is your standard hourly or word rate?

Do you post your rates?

An optional seventh question gives you the opportunity to add comments and further information.

If you are a freelance writer or editor—part-time or full-time—and have not already done so, please take the survey by Wednesday, November 12. Then come back the following week for the series on pricing, including the results of the survey.

Freelance Rates Survey Reminder

I’m planning a series on freelance writing and editing rates. Freelancers want to know what others charge, and potential clients want to know how much to expect a project to cost.

As mentioned in a previous post, I am trying to collect real-world data from freelance writers and editors through a short anonymous online survey.

There are only six multiple-choice questions:

How long have you freelanced part-time or full-time?

What kind of freelancer are you—writer, editor, both?

How do you find freelance jobs?

How do you price your work—hourly, project, bid, etc.?

What is your standard hourly or word rate?

Do you post your rates?

An optional seventh question gives you the opportunity to add comments and further information.

The more responses I get, the more valuable the information will be. If you are a freelance writer and/or editor (part-time or full-time), please complete the survey and encourage fellow freelancers to do the same.

Writer’s Worth Day

Lori Widmer at Words on the Page has declared today, May 15, as Writer’s Worth Day. Lori is on a mission to educate writers that they deserve to be paid a reasonable rate for their work.

I know my readers are interested in this subject. Every time I check my stats, How Much Will It Cost? Average Freelance Editing Rates is second only to the home page in number of visits on this blog. The most popular search term readers use to find me through search engines is freelance editing rates.

Beginning writers often think they have to charge very low rates to get business. They discover that low prices may bring projects, but not the projects they want. Instead of enjoying their work and making a fair profit, they find themselves doing work they don’t like, dealing with difficult clients, and never making enough money.

I owned businesses for many years before becoming a freelancer, and I learned that customers who want low prices are usually the most difficult people to work with and the most likely to pay late or not at all. In my interior landscape business, a business owner called me to order a few plants. She asked me to give her discount price to care for the plants since we maintained the plants in the office building. I thought it made sense—my technician was right outside her door every week watering plants in the corridor. It wouldn’t take but a few minutes to step inside her office and tend to the handful of plants she ordered.

That woman and her five plants turned out to  take more time and energy than many clients with dozens of plants spread out over a whole floor. She screamed at the technician because one of her plants had a few yellow leaves, even though we explained that it was normal for plants to lose a few leaves each week. She called to complain that the technician was late, even though we made no commitment of when we would be there except during business hours on a specific day. She was always late paying the few dollars we charged her each month. Finally, I wrote her a letter saying that we obviously were not able to meet her needs, and we wanted her to find someone more appropriate for her needs. I refunded every penny she had paid me, including the cost of the plants, and told her to keep the plants. It was well worth a few hundred dollars to avoid the aggravation.

That lesson from another business taught me to charge a fair price for my work when I started freelancing.  If you’re new to freelancing and haven’t been in business before, you may be tempted to write a custom sample or take on a project at very low rates to get experience. Imagine the woman described above as your writing client. Instead of screaming about a few yellow leaves, she’ll be screaming about a word or comma she doesn’t like. Instead of calling your boss to complain that you’re late, she’ll be harassing you about a deadline. Instead of being late paying me the few dollars she owed me, she’ll delay paying you the few pennies you agreed to.

You can build a portfolio and experience without subjecting yourself to that. Write articles for your own blog or Web site. Donate your services to a nonprofit organization you support—just ask for a byline. Submit to an article database that others recommend as a marketing tool.

But don’t give your work away to a client who should be paying for your talent and skill. Maybe you don’t have enough experience to charge $75 or $100 or more an hour, but you don’t have to accept less than minimum wage.

You can find examples of typical rates and information on how to determine your prices in the following articles:

Editorial Freelancers Association
How Much Should a Freelancer Charge?
How Much Will It Cost? Average Freelance Editing Rates
How to Set Your Freelance Writing Rates
National Writers Union Survey of Freelance and Contract Writer Rates
Professional Fee Guidelines for Canadian Writers
Putting a Price on Your Capabilities
What are your prices for writing and editing services … and how much value do you give?

Writer’s Worth Day

Lori Widmer at Words on the Page has declared today as Writer’s Worth Day to encourage writers to expect and get decent wages for their work.

I haven’t looked at any of the bidding sites in a very long time, but I’ve read other bloggers talk about the ridiculous prices that some projects pay. Often beginning writers have no idea what a fair price is for their work, and they’re excited to have an opportunity to write and get paid for it.  They accept low pay because they think they have to do so to get started.

I’ll talk more about setting rates in a future installment of my series-in-progress on starting a freelance writing business. This post is just a reminder that freelance writing is a business, even if you’re doing it part-time. Businesses have to earn enough money to pay expenses and make a profit. As a freelance writer, you don’t have an employer providing insurance, vacation, holidays, and other benefits. You are responsible for the full amount of your Social Security tax; as an employee, your employer contributes half of it. You have to pay for your own computer, phone, and Internet. And your time is worth something!

Think about those things when you’re tempted to write an article for $1. If you want to give away your work, volunteer to write for a worthy cause as a charitable contribution. Start your own blog and write posts to your heart’s content. But if you put yourself into the market as a professional writer … expect to be paid like one.