As a freelance writer, setting the rate to charge is not only complicated but also intimidating especially if you are a newbie.
The attention to my own rate came a little bit unexpected in my early days of freelance writing. After bidding for weeks, I received my first reply from a prospect.
He wanted to know how much it would cost to have an article written for him. I had no clue what to quote. So, I just blurted out, “Can’t we work with your budget this once?”
With that line, I put myself at the mercy of a client, who, as you would expect, had the motive to pay me the lowest wage he could get away with. And, I can confirm, he paid pittance.
Asking for writing work with no idea how much you want to be paid is a blunder in many more ways than just being a candidate for exploitation.
It also creates an impression that you lack experience or, worse, you are unprofessional. This is a recipe for a potential client balking due to lack of confidence in you.
Furthermore, many clients don’t know how much they are supposed to pay. When they reach out for your services, they expect you to guide them in that aspect too.
The following are nine things you should do to set a working rate as a freelance writer:
1. Set the minimum acceptable rate
Ascertain the lowest rate you are willing to take, and that will be the minimum acceptable rate. Doing this is a little involving especially for a new writer.
Fortunately, you only need to do this once and you would apply whatever number you get as the base for future changes to your rate.
A simple calculation of your overhead costs such as electricity, the internet and the depreciation value of your computer is the starting point. You shouldn’t forget other costs like the rent of the space in which you work and even the food you eat while at work.
The idea is to work out all the costs of doing business then figure out the minimum acceptable rate you could charge to cover them or break even. The minimum acceptable rate is not the same for everyone, though. Our environments, and thus overheads, as well as expectations, are not the same.
It is important to point out that your minimum acceptable rate is also a pointer to how much you value your time. And rates tend to increase with the value we attach to our time.
However, while coming up with your figure be practical and only consider what would put you in the right attitude to deliver exemplary service.
How aggressively you choose to negotiate above your minimum acceptable rate largely depends on the level of workload you already have or how much you want the job. Personally I take it as a cue to raise my rate when I am getting more work than I can handle.
Likewise, it is important to set up an annual financial plan to keep track of all your financial activities and at the same time ascertain whether or not you are accomplishing your long term financial goals.
2. Consider indirect benefits
Another important factor to consider while deciding on the rate to charge your clients is possible indirect benefits. Indeed, you shouldn’t think only of immediate financial compensation a client offers. Also consider other benefits you stand to get from working on a project, especially those that translate to future profits.
For instance, you could accept a low rate from a client offering a possible long term consistent workflow. This is especially if you anticipate having opportunities to renegotiate the rates in future.
A prospect could also be a major corporation that would earn you reputation or give you referrals. In short, on some occasions, it is worth it to under charge especially when there are indirect benefits to consider.
3. Pick the right pricing format
Pricing takes different formats. It could be hourly, per word count or per project. Find out exactly how many billable hours you can work each week. Consider that there are also many hours spent on non-billable work such as networking, pitching or marketing.
By looking at how much time you put into the work, you could figure out your desired rate.
Crucial to note is the tendency to underestimate how long a project turns out to be. So, there would definitely be trial and error period before you get right time commitments.
Once you have settled on an appropriate hourly rate, based on your desired salary, it is advisable to convert it to project or fixed rates. Many clients hesitate when presented with an hourly rate pricing.
For instance, a client may balk given an hourly rate of $100, but may not be bothered when presented with a project budget of $2,000. It is at your discretion to allocate twenty hours for the project.
4. Focus on the service value
Your clients are not doing charity work when they hire you-the majority isn’t. The copy you deliver to them should at least pay for itself in their books of account. Consider return on investment (ROI) especially when your text is used for marketing.
Gather information on how your service positively impacts the client’s business. This will influence the rate you charge. For instance, if an article ranks top on Google for a targeted keyword, the client would easily pay a higher rate.
Bottom-line, ask yourself what service value you are offering before settling on a rate. Most importantly, though, always invest in time, money and effort to learn new writing skills.
5. Research your clients
The price you charge, especially what is on top of the minimum acceptable rate, also depends on the client you are negotiating with. You need to research to ascertain the nature and expectations of a client.
While some clients go for the lowest possible rate, others pay whatever price that gives them quality.
Similarly, some clients may offer long-term projects and others may offer projects you would love to work on even at a lower rate. As a freelance writer, you should evaluate prospective clients and vary rates to account for their uniqueness.
And, I repeat, that succeeds only with thorough research.
6. Look at the market competition
When thinking about what to charge, consider what your competitors are asking for the same work.
Indeed, you should research your competitor pricing. Apart from browsing through freelancer websites, consider directly asking fellow writers what their rates are.
At the same time, gauge the different experience levels of writers. You should tell whether you fit at the top or bottom of the scale. This should help you to set rates that are realistic and appropriate.
7. Consider supply and demand
Freelance writing, just like any other business, respects the law of supply and demand. During economic slumps, you may have to charge a little lower than when the business environment is healthy.
As a freelance writer, determine how strong the supply or demand is for your type of work. Nevertheless, you need to stay up the ladder and produce high quality, because the lower the quality of your writing, the higher the supply of similar writers.
Whereas average writers need to seek out their clientele, excellent writers have the advantage of referrals and invites. Clients you get through referrals and invites value your work and pay more.
8. Decide on a profit margin
No writer wants to work so hard yet can’t have quality holidays. You need to decide how much profit is enough right at the initial stages of pricing.
There are no clear cut answers of how much profit a writer should make. That depends on personal judgment and type of work, experience level and the competition.
Nevertheless, you should evaluate your worth in terms of talent, the level of experience and what value you give your client. It is hard for one to put an exact numerical value on these things but as a freelance writer, you must have a realistic sense of view about how good you are at your work.
Veteran writers with experience will get the top of the range profit margins. Meanwhile, as a beginner, it is appropriate to start out at the bottom but still make a profit.
9. Understand the scope work
To have an estimate of pricing, you must have the scope of work. Note different aspects of the work such as how soon the client needs the work, whether the client provides the content outline and whether the client provides sources or you have to do everything on your own.
Answers to these questions would bring clarity upfront. They would also help you understand client expectations and thus how to estimate the price.
It is easy to have an embarrassing conflict with your client when you don’t understand exactly what they want. You could also end up allocating extra hours to work that you didn’t initially budget for. Coming to a clear agreement on the nature and scope of the project helps avoid this scenario.
Some projects are understandably large and may require a lot of time to execute. Break the job down into different segments. Allocate a time frame to each individual segment, including unforeseen events. With a clear breakdown, it is easier to negotiate with a price that represents the true value of your work.
The key goal is to negotiate a rate that strikes a balance between maximizing your income and not scaring off a potential client. Indeed, negotiating a price rate should be an opportunity to communicate your value to the client. Demonstrate your expertise and educate the client about the process behind your work.
You don’t get what you deserve but what you negotiate for.