We freelance writers enjoy a lot of FREEDOM in our careers.
We work the hours we want, we choose the projects and clients we like, and most importantly, we even set our own rates and fees.
Without bosses or managers to answer to, we have complete control over our career paths and where they take us.
But while having complete control can certainly have its benefits, it can also lead to problems, too.
With all this freedom comes the potential for mistakes: the potential to work too little and fall behind on deadlines, the potential to choose the wrong clients and get burned on payment or, in many cases, the potential to charge too little and fail to meet our income goals and milestones.
Charging too little is what I want to talk about in this post. I hate seeing freelance writers undervalue their potential. It’s a crime! And one of the ways they charge too little is charging by the hour.
Knowing how to charge is crucial to every freelance writer’s career. It’s even one of my five pillars to becoming a high-earning writer.
Here are some guidelines on how you should be charging your clients:
The Right Rates
I get asked time and time again by fellow writers: “Should I charge by the hour?”
Now, as freelance writers, we have a lot of options when setting rates. We can charge by the word or by the page, we can charge per project, or we can charge hourly. Some people even set monthly or annual retainers for their long-term clients.
Each one of these rate systems has its own pros and cons, but one thing I know for sure: charging by the hour is definitely the least lucrative option.
With an hourly rate, writers are typically hesitant to charge too large a number. They don’t want to scare off a client and fail to land that job, so they charge a reasonable rate that won’t make the hiring manager’s jaw drop – maybe one they would expect to earn if they were in a traditional 9-to-5 setting.
Here’s the problem with that scenario: You’re good at writing. That’s why you do this.
If you are assigned a 500-word piece, I wouldn’t be surprised if you could crank it out in 30 minutes. Sadly, with an hourly rate of $30 an hour, you’d only get a mere $15 dollars for that piece. $15 dollars! That’s just pennies a word!
On the flip side, if you were to charge per word for that piece – say 10 cents each – you’d enjoy a whopping $100 dollars instead. Now which fee would you rather get, the $15 dollars or the $100?
Are Hourly Rates to Blame?
The real problem isn’t with hourly rates themselves.
It’s that most writers don’t take into account their speed, value and income goals when setting those hourly rates. Instead, they set a random number they think will look good to their clients so they can lock down a project.
In the end? They end up leaving money on the table.
If you want to use an hourly rate – or your client requests it –work backwards and determine these four items:
- What income you’d like to make this year
- What weekly salary you’ll need to make to meet that goal
- How many hours you’re willing to work each week
- How many weeks you want to work
Then, you can use this formula to work out the hourly rate you should be charging:
(Salary goal / working weeks) / weekly hours
This will give you your hourly rate.
Now as an example, let’s say you wanted to make $100,000 a year. If you were willing to work 20 hours a week (billable hours spent on writing only) for 40 weeks a year, you’d need to charge $125 an hour to meet that.
Getting Your Target Hourly Rate
If you’re like most freelance writers, you’ll probably shy away from advertising a $125 / hour rate. And as I mentioned before, it could scare off certain clients.
But remember, you want clients who value your skills and talents, so focus on the quality of your projects – not the quantity. A few high-paying clients is always better than tons of low-paying ones.
If you’re scared of charging those sky-high hourly freelance writing rates, take your math a step further and figure out a per-word rate instead.
First, determine how many words you can write in an hour. A good way to do this is to monitor your next project. Then follow these steps:
- Start a stopwatch when you begin writing
- Stop the watch when you’re done and note the word count (include research and editing)
- Divide the minutes you worked by the number of words completed
- Multiple that number by 60
That’s how many words you can complete in an hour. Once you have that figure, calculate your per-word rate. Use this simple formula:
Hourly rate / Number of words per hour = Per-word rate
This result of this calculation is what you should be charging clients for every single word you write.
If you can complete 1,000 words in one hour, and your per-word rate is 15 cents…what sounds more affordable to you? $150 dollars an hour or 15 cents a word? You can bet the per-word rate will seem more in-budget to most clients.
You’re Worth that Rate!
If you’re afraid of charging clients too much, take time to develop a niche.
Study up on a subject you’re particularly interested in, and make yourself an expert. The more expertise you have in an area, the more willing your clients will be to pay top dollar.
And next time you’re bidding on a project or you’re approached by a new client, choose the right rates and the right types of rates. By undercutting the true rate you deserve, you’re only hurting yourself and your career in the long run. Only you can control your career’s fate, so take charge and become the successful writer I know you can be.