Today’s post is another from one of our regular guest bloggers, Ruth E. Thaler-Carter. Ruth will be blogging monthly on various topics in the area of freelancing. Look for her posts under the main title of “Freelancing Basics.”
One of the biggest challenges for a freelance tech communicator is setting fees or rates for your work. Here are some tips for handling this aspect of having a freelance tech communication business.
Fee-setting models
There are several ways to set fees for your freelance services.
Most writing work is paid by the word. You can’t get more straightforward than that! With a writing assignment that has a word count, though, don’t assume you can make more by submitting more words than assigned. Editors assign word limits for a reason—they have both space and budget limits, and don’t appreciate freelancers who submit excess verbiage to increase their pay.
The most common model appears to be an hourly rate. That has the advantage of being relatively easy to calculate or set and even easier to track. With an hourly rate, though, you don’t get rewarded for working faster or more efficiently; in fact, you essentially lose money by increasing your editing speed, although working faster might free up time for other projects.
As my colleague Rich Adin, owner of Freelance Editorial Services and a generous blogger on freelance editing matters, says, if you charge $50/hour, all you will ever earn is $50/hour.
Per-page rates are also popular. Working faster works to your advantage with this model—the more pages you edit per hour, the more you get paid for that chunk of time. Finding ways to work more efficiently—such as using macros, search/find-and-replace, etc.—makes this model even more profitable.
Finally, there’s the project- or flat-rate model. That’s harder to establish, but colleagues say it tends to be the most profitable way to charge. To establish a project rate, you need a good sense of how fast (or slowly) you tend to work, so start tracking your time on current projects in case you want to develop a rate structure using that model. You also need to know what a project looks like before committing to a flat rate—insist on seeing an entire manuscript, site, or other project before setting the fee (or accepting the deadline). And never believe a client who swears that a manuscript “only needs a light edit/proofread”!
The potential headache with flat rates is that a project that initially looks pretty straightforward can turn into a huge nightmare, with requests (or demands!) for revision after revision after revision, or extensive additions to the original scope of the work. To protect yourself from working for pennies rather than dollars, include language in your contract or agreement along the lines of, “Requests for additional revisions or changes beyond the scope of the original assignment will be billed by the hour.”
Be prepared to use different payment models for different projects and clients. Don’t lock yourself into only way of setting your rates, or you’ll lock yourself out of some projects with clients who only use other models.
Calculating fees
Establishing a payment model is one thing. Coming up with actual dollar amounts is another—and much harder.
It isn’t always up to the freelancer to set fees or rates. Some clients already have rates in place, and the freelancer has to accept what’s offered or look elsewhere. That isn’t necessarily a bad thing—it makes the fee-setting process easier, by removing the need to second-guess the client or negotiate, and the client’s rates may be good ones, or good enough to start with. Some clients will increase their rates after a freelancer successfully handles a first project, after several projects, annually, or at the freelancer’s request. It never hurts to ask!
And there are times when you can negotiate up from a lower-than-desirable rate. Some prospective clients can be convinced that an experienced, skilled editor is worth more than whatever initial rate is. Again, it never hurts to ask.
A skilled, experienced tech communicator should be able to command $1/word for writing assignments, but competition is so intense these days that it can be a challenge to get that or more. Keep in mind, too, that something you can write fast at a low per-word rate can still be profitable if you recast it in other terms. A 1,500-word article at only 15¢/word gets you $225; if you can write it in an hour, that’s a pretty good hourly rate! Even if it takes you two hours, it’s still a bit more than $100/hour; also not bad.
Editing and proofreading rates are all over the map, but $25/hour seems to be a reasonable starting point for someone with at least a little experience.
You can always poll colleagues to see what they charge, although not everyone will share that information. I don’t see what I charge as necessarily relevant to what someone else might charge—I base my rates on a combination of my skills, experience, topic knowledge, and chutzpah, none of which is going to be the same as most other freelancers. I balance those factors by the client’s budget (if known) and willingness to negotiate, and every client is different.
That said, there are resources for how freelance communicators might set fees for their work: http://the-efa.org/res/rates.php, www.kokedit.com/ckb.php, www.copyediting.com, www.writersdigest.com/pricing-guide.
Here’s a formula that I, a somewhat math-challenged individual, find easiest to understand and apply to setting an hourly rate.
Take the dollar value of your last or best-paying full-time job. Add in the dollar value of benefits, from health insurance to worker’s comp to vacation time to Social Security input. Divide by 1,950, which is one of the standard numbers of hours per year worked in the average full-time job. That gives you a rough version of your current or best income on an hourly basis. Then, depending on your chutzpah level, double the result and use that as your hourly rate. The idea behind doubling the figure is that you have to cover not only the time you spend on work, but also all the other aspects of having a freelance business—marketing, filing, billing, client interaction/hand-holding, supplies and equipment, and anything else that comes as part of the package with a full-time job beyond the items used to calculate the value of that job.
STC member Ruth E. Thaler-Carter is a long-time, award-winning freelancer; author/publisher of “Get Paid to Write! Getting Started as a Freelance Writer”; author of “Freelancing 101: Launching Your Editorial Business” for the Editorial Freelancers Association; and owner of Communication Central, which presents an annual conference for editorial entrepreneurs every fall.
Good article, Ruth, and thanks for the mention. A couple of points, however :). First, there is little difference between calculating a project rate and a per-page fee. In essence, although freelancers like to separate the two, they are the same. After all, if you charge $3 a page or $3,000 for a 1,000-page editing job, the rate is the same. In fact, in my experience, most editors calculate the project rate by using a per-page rate.
Second, although rarely discussed, an hourly rate is also founded on a per-page rate. When calculating an hourly rate, you need to also calculate how many pages an hour you will be able to edit. The difference is the illusion that an hourly rate gives you a safety net in case your estimate of the number of pages you can edit in an hour is too high. Editors forget that clients have budgets and that those budgets, often unstated, set an outside limit to the number of hours that can be spent editing, assuming you (a) want to be paid in full and (b) want the client to return in the future. Too many editors choose the hourly rate route on the assumption that the hours are “relatively” unlimited in number.
Third, the one very important rule that is missing from your article is what I call the rule of three — that is, never determine whether a client (or a rate method, for that matter) will be profitable on the basis of a single manuscript. I believe it takes 3 manuscripts to make that determination, because two will be representative of what you are likely to get over the course of time.
Fourth, the fallacy of the hourly rate that you allude to in your article is that whatever hourly rate the editor sets is the hourly rate the editor really earns. That is never the case. The more important calculation — and more accurate one, too — is the effective hourly rate. Those who charge by the page or project have the opportunity to raise their effective hourly rate; those who charge by the hour almost always have an effective hourly rate that is lower than the stated hourly rate, and those who do not, never exceed the stated hourly rate.
For those interested in learning more about effective hourly rates, the rule of three, and other matters regarding the business of editing, I invite you to search my blog at the link Ruth provided.
Rich has – as always! – good points. Among other things, a lot of us think in terms of hours simply as time and don’t realize that there is relationship between hours and numbers of pages. I tell people to track the number of pages they can work on for a given project to get a better sense of how many pages/hr. they can edit or proofread, and aim to become more efficient so the page count goes up and the hours go down.
I’ve found it useful to allude to the editorial/correction process that is included in the quoted fee; that is, “Fee includes one round of reasonable edits.” Granted, “reasonable” is a relative term, but it helps manage clients who say, “I didn’t like it. I need you to rewrite this.”
All my agreements or contracts include language to the effect of “Fee includes one revision within the scope of the original assignment. Additional revisions, if needed, will incur additional fees.” That’s especially important for writing assignments. And using “scope of original assignment” takes some of the subjectivity out of whether revisions are “reasonable”!
Excellent advice. I must have gotten this advice from you before, because I have internalized it. I now prefer this method: find a salaried job that fits my experience and is in my market, then double that salary and divide by 2000 to find the hourly rate. As you said, this accounts for a lot of overhead (we don’t need to account for the additional benefit of medical insurance in Canada) and also takes into account the market (such as publishing or journals) and my qualifications. Plus, it’s super quick, and accurate enough.
Now that I am a senior editor, I really like your arguments about project rates. I also impress upon my science clients, the particular advantages (expediency and accuracy) of hiring a specialist as opposed to a generalist.