WORDS YOUR WAY BLOG
Hourly or Project: That’s Not the Question
A Google search for “hourly vs project writer” yields 475,000 results.
Each method has its fans. The debate has been covered exhaustively. Many experienced writers end up at, “It depends on the project,” and cite their typical arrangement and its common exceptions.
Everyone agrees: If you charge by the project, you must have a sense of the underlying hourly rate. You don’t want to work for minimum wage. If you charge by the hour, you must have a way to determine if the total fee for any given project will be worth your time. One hundred dollars an hour may be a great rate, but, realistically, you cannot sell, deliver, and administer dozens of separate hundred-dollar writing projects per month.
One popular tool is the “hourly rate calculator.” You can find many examples on line. My complaint about those calculators is that they perpetuate the faulty frame that leads writers to charge too little and ultimately harms the quality of their body of work.
The typical calculator offers a formula something like this: Start with the amount of money you make on your job, say $25 per hour. Assume that you will bill some portion of that time and spend the rest of your time on marketing, bookkeeping, etc. Add in your business and personal expenses, from health insurance to internet connection to tax preparation. Subtract hours you plan to use for vacation, sick leave, and continuing education.
There is a big problem with this method and the mindset that spawned it: The hourly rate you charge must be a price, not a wage.
Freelancers who come from salaried jobs often confuse the business revenue with the owner’s personal income. In essence, you-the-business and you-the-owner are separate; the money you pay yourself for working is a business expense.
Think of it like so:
- Overhead expenses: Internet, phone, paper, postage, software, home office, business license
- Direct expenses: travel to a client site, rent to host a client focus group
- Labor expenses (may be direct or indirect): proofreader, virtual assistant, IT consultant, YOU
- the price the market will bear exceeds the cost to deliver
- you have (or can develop) the capacity to deliver — both time and skill
- you have (or can attract) a large enough customer base willing and able to pay your prices
- the total work you bill adds up to the revenue you need
Barbara Ruth Saunders is a writer, editor, and writing coach.