Dear WordCount: When a new client asks me to set a rate for a white paper or other freelance writing project, I am torn between feeling “How can I charge this much?” and “That’s all I’m going to charge?” Which is right? — Confused
It’s perfectly normal to question your rates. After all, you don’t want to price yourself out of an assignment. But you don’t want to underbid a project and then kick yourself when it ends up being more work than you bargained for.
If you asked a graphic designer, plumber, lawyer or other self-employed professionals who provide some type of service, my hunch is they’d say the same thing.
The keys to determining what to charge for a specific project are what the market will bear, and what you need to earn to make it worth your while.
There are four ways to come up with a rate:
1. Research what other writers are getting.
If you have writer friends or acquaintances who do the same type of work, ask what they charge. If they’re uncomfortable sharing specifics, ask for a range. You might also be able to get market rates from a professional writers’ association such as American Society of Journalists and Authors. ASJA has forums where you can leave a question, and also maintains a market rate guide where writers anonymously share info on going rates for everything from magazine articles to whitepapers. If you belong to writers’ groups on LinkedIn, post a question in the discussion.
Another option is a salary comparison site like PayScale.com. You can use it to see what the median pay is full-time employees who do the same type of work. Reports are based on location, education and years of experience. I just ran a report for “corporate communications writer” and the median pay for an experienced corporate writer in Portland, Oregon, is $61,000 a year. Break that down to an hourly rate – 35 hours a week, 50 weeks a year – and it works out to about $35 an hour. Run your own report to find out what the annual salary would be, and break that down into an hourly rate.
2. Calculate a fee based on total hours for the project.
In this method, start by determining how many hours you think the project in question will take. I’m notorious for underestimating how long it takes me to write a feature story or edit a whitepaper, so I cover myself by adding an extra 25 percent to 30 percent to the time. When you’re calculating hours, don’t forget to add in time for client meetings or phone calls and any other administrative work that goes along with the project. Once you come up with the hours, multiple them by your standard hourly rate to come up with a project fee. If you’ve figured out that a project will take 20 hours and your standard rate is $75, the fee would be $1,500.
3. Calculate a fee based on your target monthly earnings.
Start by looking over your projected income for the year and how that breaks down into a projected monthly income. Look at what other projects you have going on during the time period that you’ll be working on the project, and what percent of your target monthly income you want it to represent. For example, your target monthly income might be $10,000 and you’ve estimated that the project you’re pricing — say it’s a whitepaper — will take two months. During those two months, you’ve already got a handful of other projects lined up, plus some regular blogging and writing assignments, all of which take up about 75 percent of your time. That leaves the other 25 percent of your time to devote to this project. A quarter of $10,000 a month is $2,500, so the fee for 25 percent of your time for two months would be $5,000.
4. Look at what you charged in the past.
If you’ve done work for the client before, or if you’ve done similar projects before, check to see what you charged. Use that as the basis for coming up with a fee for the new project, adjusting higher if there’s more to this project than past work, or less if you’ll be doing less.
If you use these separate methods of calculating a fee and come up with figures that are all very close, you can feel comfortable knowing you’re charging what you should be charging. If they’re off by a large factor, however, you may need to go back and review the scope of the project, your hourly rate, or the time you estimated it will take, to get the fee closer to your ideal.
One final note: If your client or potential client asked you to present them with a proposed fee, start out offering a number that’s on the high side of what you’d be happy accepting, going over by as much as 20 to 30 percent. That way, if they say yes, you’ve earned yourself a nice little rate bump. Even if they negotiate you down 5, 10 or 20 percent, you’ll still be happy with the fee.
Got a freelancing question? Send it to Dear WordCount at email@example.com.
[Flickr photo by jekert gwapo]