How much should you charge?
That’s the question every freelancer has to keep asking. Today’s freelance writers usually juggle a number of projects, from traditional magazine articles to blog posts to corporate copy. Because of this variety, compensation can differ significantly depending on which hat you’re wearing that day.
Even though pricing your services is an inexact science, charging by the word, the hour, or the project each comes with its own pros and cons. Here’s a breakdown of the three most popular methods of payment and when you should use them.
Traditionally, freelance writers are paid by the word. With this arrangement, it’s important to remember the per-word rate needs to be high enough to account for all activities that aren’t measurable by the finished product, such as interviews, research, and revisions.
Per-word agreements tend to bring the highest return when little ancillary work is expected. For example, if you’re an expert on a particular topic, you’ll be able to spend more time working and less time researching.
However, earning your income by the word can lead to a few unique consequences if you’re not familiar with the client.
“If they’re going to ask for five separate revisions, that $1.50 per-word rate is not so great anymore,” said Massachusetts-based freelance writer Erik Sherman. “Also, will you be paid for published words or assigned words? If you deliver the amount of words you were asked, but the article ends up being cut, will you still be paid for the work you delivered?”
A good approach is to stick to a minimum per-word rate that will help you hit your financial goals. And if a publisher is known for scope creep, adjust accordingly when calculating how much extra work you’ll have to do.
Setting an hourly rate is particularly popular among writers who do corporate work. This method of billing ensures compensation for non-writing time, such as brainstorming session, meetings, and necessary phone calls.
“The best situation to charge by the hour is if the client doesn’t have a handle on the scope of a project,” explained Ann Logue, a freelance writer and author of Emerging Markets for Dummies. “If there are likely to be lots of meetings, changes to the project, and edits, an hourly rate is good protection.”
In many situations, hourly billing can yield a good return. But proceed with caution: There are some cases where this can work against you. If you bring a high level of skill to a situation—either advanced knowledge or project experience—this will probably translate to smaller paychecks.
For Logue, that area of expertise is finance. “Articles are easy for me because I have the background and know how to find sources,” she said.
Having a specialty certainly helps you stand out to employers, but if you know you’ll be able to complete work in a short amount of time because of your skills, using a project-based rate or adjusting your hourly rate to reflect your experience will likely result in a fairer wage.
Project-based pricing is a desirable method with most writers, as it enables you and the client to settle on a fair compensation up front. Getting to this point requires an initial investment of time, but putting in the effort to calculate the value of the project can deliver the highest return.
“Nail everything down,” Sherman said. “Consider the scope, estimated words, number of revisions, amount of time they have to make edits and approve the copy. Also think of other services you might be doing, like searching for images or research.”
Breaking down each step and estimating the required time can help you derive the total project rate. And sharing an estimate with your client can help them understand all of your responsibilities and agree to your price.
“This forces both yourself and the client to think through all the issues and leaves room for no surprises,” Sherman added.
Once you’re both in agreement, it’s crucial that you document everything in a contract before beginning the project.
Which is best?
While it may be convenient for you to implement one pricing policy, that’s not always the best way to achieve your financial goals. Instead, set baseline rates, but continue to investigate reasonable projects that fall outside of your desired range.
For example, say you’re offered a blogging job at a project rate lower than you’d normally charge. However, you’ll be writing about an area you cover frequently, so you can churn out each post without much research. If the job is ongoing, it’ll be a smart way to keep money flowing.
Take the time to analyze the scope of each project, then consider how different pricing methods play out with an open mind. That way, the next time you have to ask yourself how much your skills are worth, you’ll have a clear answer.