My So-Called Freelance Life - Michelle Goodman [24]
So let’s say you’re planning to work 46 weeks a year. And since I’m a fan of having a life outside work, let’s say you’re going to work an average of 40 hours a week. As we’ve already established, you won’t spend all those hours doing billable work. Most new freelancers find themselves trolling for work and keeping up with administrata up to half the week. But since I know you plan to hit the freelance trail with a few repeat clients in tow (right?), let’s estimate that your first year freelancing full-time you’ll bill clients for 60 percent (24 hours) of the 40-hour workweek. That means you’ll bill for 1,104 hours a year (24 hours x 46 workweeks).
Now, to figure out what you need to make per hour, we divide that handy-dandy target income we arrived at earlier (not the break-even one, the one where you make a 30 percent profit) by the billable hours you’ll work for the year. So $84,500 / 1,104 = $76.54 an hour, which we might as well round up to $80 an hour.
Not all freelancers bill by the hour. Massage therapists charge by session. Film producers charge by the day. Information architects often bill by project milestone. And writers often get paid by the word. In fact, as you’ll see in Chapter 11, there are plenty of reasons not to bill by the hour. But figuring out the minimum amount per hour (or day, week, or month) that’ll get you out of bed is essential. Once you know your bottom line, it’s much easier to choose which clients to work for, estimate and negotiate project prices, and walk away when the deal stinks like six-day-old fish.
Again, depending on which freelancer you ask, $80 an hour is either a pauper’s wage, highway robbery, or right on the money. A relatively new proofreader in the publishing industry might work for a quarter of that amount. A certified financial planner with ten years’ experience might charge anywhere from $100 to $200 an hour. But to a novice graphic artist, $80 an hour might be just right.
There’s only one way to find out if your rate will hold water in the freelance marketplace: see what your competitors are charging.
Keep Up with the Joneses
Whether you’re a freelance translator, tax preparer, or taxidermist, there’s a good chance someone’s written a blog post or article on pricing tactics for the trade. And you know those other personal shoppers and pet psychics you scoped out on the web back in Chapter 1? Some of them will have their freelance rates posted right on their website. Others will mention the professional associations they belong to (Kansas City Knicker Knitters, Freelance Femmes of Fresno), many of which will offer lectures, workshops, and schmoozefests—all fine forums for uncovering what someone with your amount of experience in your industry (and located in your neck of the woods) stands to earn. Ditto for the free email discussion lists many of those professional associations offer. One caveat: Discussion list moderators won’t let you talk prices in an online public forum (for fear of being accused of illegal “price fixing”), but you can always ask your fellow listmates to email you their scoop privately.
Be sure you get a sampling of opinions about what to charge for the type of work you do and the individuals or organizations you do it for. It would be a shame to rely on the advice of the one undercharger in the bunch. Some professional groups and web communities, like Mediabistro and FreelanceSwitch, publish surveys they’ve taken of their members’ pricing practices—invaluable info to get your hands on.
In doing this research, you’ll no doubt notice that Freelancer A doing the same type of work as you for a roster of Fortune 500 clients gets a considerably higher rate than Freelancer B, who mainly works for small-town nonprofit arts organizations.