So You Think You Can Freelance? Part 3: Money

25 Feb

Before you read this, did you read Part 1: Mindset and Part 2: Ground Work? Both are critical before you even think about the money. If you have…

Photo courtesy of Anna Magal, Flickr Creative Commons

Photo courtesy of Anna Magal, Flickr Creative Commons

What do you charge?

Be honest. It’s what you want to know, right? If you’re going to take this dive, you need some assurance there will be a little money waiting when you land.

Technically, I can’t post my specific rates, as that could be considered influencing potential competitors’ rates and thus corning the market. However, if you’re specifically a writer looking to freelance, I can recommend these two books (which do talk specifics):

If you read them both and weigh the pros and cons of each, you’ll have a well-balanced idea of what you can expect.

What about overtime?

Yes, there is such a thing as overtime in freelancing. You need to firmly separate work and “home” time—even though they’re both at home—or the distinction will quickly become very fuzzy. Personal down time is important to give 100% to your work time. Too often people forget that.

WorkHomePlaySleep

But back to numbers … I charge an extra 12% per hour for quick-turnaround projects (less than two business days), which in essence require me to work nights or weekends. If you’re quoting a project rate, and you know it won’t be possible to finish it during your business hours, charge a little extra to take this into account. Your personal time is worth it, isn’t it?

What’s this about project rates?

If you have an opportunity to tackle a larger project, clients will often prefer a project rate. It’s much more convenient for their budget planning, and it can be rather convenient for your planning as well.

Since it guarantees consistent work for a longer period of time, a project rate should include a bit of a discount off your hourly rate. You won’t need to look for other work during that project, which saves you time. And you know what time equals, right?

TimeEqualsMoney

May I have a project rate example?

One client will periodically have me come into the office from 9-5 (with a 1-hour lunch break) and work on anything in-house that happens to need written or reviewed. For that, I charge slightly less than my hourly rate times seven because it’s guaranteed work for a whole day.

It’s great for them, too, because they get to avoid my overtime fees. Whatever comes across their desk that day, they can have me address it immediately, without having to wait or pay extra. Win-win.

But what if you don’t know how much time it will take?

Yeah, that’s tricky, but you’ll get the hang of it with a little trial and error. Here’s an example of the kind of deductive reasoning you’ll need to do.

When I write trivia content for games, I charge a project rate that’s dependent on the number of questions, research, detail of answers, review rounds, localization, etc. I “practice” write five Q&As to figure out a time average. Then I use that figure as a starting point and add on for my equipment, overtime, Internet connection, electricity, and all that good stuff that freelancers have to pay for out of pocket.

Photo courtesy of Scott McLeod, Flickr Creative Commons

Photo courtesy of Scott McLeod, Flickr Creative Commons

So how do I calculate a project rate?

My advice is admittedly writing-specific, but here some of the questions to ask yourself when figuring out what to charge:

  • About how many words will I need to write per page?
  • How long will it take me to write a page?
  • How does the number of pages I’m writing stack up to my hourly rate, given the time I’ve estimated?
  • What is the expected quality of the work I’ll be doing? Is it client-facing, brainstorming, backstory building, a piece that will be published, etc.?  (This will make a difference on the amount of time expected and the probable number of editing rounds.)
  • Given all that, how many pages can I fit in per day?
  • How much time does that leave me per week to look for and complete other projects, in addition to my regular business management responsibilities (taxes, invoicing, marketing, etc.)?

If you have a project that’s going to take the majority of your time, you’ll obviously need to make sure your potential revenue will at least cover a roof over your head, heat, Internet, sustenance, insurance, etc.

Next up, I’ll answer specific questions from readers… so send them my way!

Part 1: Mindset
Part 2: Ground Work
Part 4: Q&A

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3 Responses to “So You Think You Can Freelance? Part 3: Money”

Trackbacks/Pingbacks

  1. So You Think You Can Freelance? Part I: Mindset | My Castle Heart - March 1, 2013

    […] Part 2: Ground Work Part 3: Money […]

  2. So You Think You Can Freelance? Part 2: Ground Work | My Castle Heart - March 1, 2013

    […] Part 1: Mindset Part 3: Money […]

  3. So You Think You Can Freelance? Part 4: Q&A | My Castle Heart - March 4, 2013

    […] Part 1, we discussed the mindset. In Part 2, we explored the ground work, and in Part 3 we talked […]

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