Oh yes, the issue of assigning a dollar value to your freelance writing. It’s always been a struggle, especially for the youngest members of the community.
If you’ve been reading any freelancing blogs then you know that there are some standard amounts popular among other writers. For instance, $100 tends to be considered as a good price point per article. And then every multiplication of that.
But in the end, getting your rate per article out of thin air might not be the best approach for all situations.
Why you need a well thought-through rate
Now bear with me on this one because this advice is not as basic as it seems. You obviously realize that you need to a set rate because how else will you know how much money you’re making, right?
There are also other reasons. A common situation among freelance writers doing certain jobs is to have second thoughts regarding the projects they’re currently taking part of. The thing is that at some point when working on a project you might feel that you’re being underpaid. There’s just too much research involved, the topic is too technical, or getting in touch with the people you need to interview takes just too much time. In the end, you feel like you’re losing money instead of making it.
That’s exactly why you need to set a rate that’s going to make it certain that when you are writing an article, it’s surely based on a (mutually) profitable agreement.
Per article, per hour, per word, monthly?
I can see four main ways of putting a price tag on your writing: charging per article, per hour, per word, or getting a monthly salary.
Per hour is obviously the best situation possible, as you always get paid for the amount of work you do. However, very few people will be willing to agree on this. The main problem is, of course, that your client has no real way of knowing how many hours you’ve worked exactly. And trust is a very rare commodity these days.
Per word seems to be the second best scenario. If you know how much time (and effort) it takes you to write one word, you can estimate how much money you need to charge in order to make it profitable. (In a minute, I’m going to explain how to do this exactly.)
Per article is usually the rate clients understand and like to use. It’s much easier for a client to estimate their monthly expenses if they know how much money they have to pay their contractor. Per word or per hour is much less precise, and leaves quite a lot of space for speculation.
Now, the most ridiculous approach for a freelancer to go with is being paid based on a monthly fixed contract. I’m calling it ridiculous not because of the form itself, but because agreeing to it often means getting a job, not freelancing.
Let’s explain the biggest disadvantage of such an approach with an example. What if you’re being paid a monthly fixed amount, and all of a sudden your client wants an extra article (one more than you’ve originally agreed to). In some situations (it always depends on the client) you can find it extremely hard to get paid for this additional work.
In the end, I advise you to work under one of the following models: per hour or per word. Personally, per word is the one I always aim for when working out an agreement with my clients.
The following section explains how to set your rates for both of these approaches.
How to actually set your rate
This is a simple process, but it still consists of a couple of steps. Here they are:
1. Start by defining how many hours you want to work during a month.
Bear with me here, I just want to make this advice complete and usable for everyone, that’s why I’m starting with this specific point.
This may not be as easy as it seems. The thing is that this number will determine the final amount you’ll charge per hour/word.
Be realistic when picking this number. Chances are that you won’t be able to work more than 40 hours per week if you want to have a life at the same time. If you’re not Tim Ferriss, then aiming at the range of 20-40 hours per week is usually the best idea.
The whole point of being a freelancer, at least for me, is to have certain freedom regarding your work and free time. If you wanted to have no time for anything, you’d take two full time jobs instead of becoming a freelancer, so once again, I advise you to be realistic.
2. Calculate the amount you need/want per month.
Consider things like: your monthly expenses, “safety amount” (the money you might need in case of an emergency), your personal desires, travel money, and virtually anything else you can think of that can become a factor for your profitability.
When you’re done, multiply this number by anything between 1.2 and 2 (just in case).
3. Divide your desired pay per month by the number of monthly work hours.
Naturally, what you’re left with is your rate per hour.
If your clients are willing to settle for such an agreement then your rate is set. If not, proceed to the next step.
4. Estimate how many minutes it takes you to write a 1000 word article.
If you’ve done some writing before, you should be able to estimate this pretty accurately. Maybe not right to the minute, but at least well enough to get a broad perspective.
5. Calculate how many words you can write in an hour.
Do this by dividing 60,000 by the number from the previous point. (This is just math, trust me on this one.)
For example, if writing a 1000 word article takes you 40 minutes then what you should to is:
60,000 / 40 = 1500
(If one 1000 word article takes you 40 minutes then, on average, you can write 1500 words in an hour.)
6. Calculate your final rate per word.
Take your rate per hour (point #3) and divide it by the number of words you can write in an hour (point #5). What you’re left with is your final rate per word.
For example, if you want to make $60 per hour, and you can write 1500 word in that time: $60 / 1500 = $0.04
This whole process may seem complicated at first, but it’s actually really easy to go through once you have a piece of paper and a calculator at hand. By the way, this is the exact process I went through when estimating my rate per word.
Feel free to try it out and let me know if it’s working for you. Also, if you have a different approach that you’d like to share then don’t hesitate to comment either.
Karol K. is a freelance writer and blogger. He’s passionate about running a successful online business and using various tools to make the final goal much easier to achieve. For instance, check out his opinion on one of the most popular tools for internet marketers - Market Samurai review.