Excerpt from Everything You Wanted to Know About Freelance Writing – Find, Price, Manage Corporate Writing Assignments & Develop Article Ideas and Sell Them to Newspapers and Magazines and from Six-Figure Freelancer: How to Find, Price and Manage Corporate Writing Assignments.
You are working non-billable hours if you are in marketing mode, or when you are filing, cleaning your office, doing your books, and so on. A billable hour, on the other hand, is any hour (or part thereof) that you are paid to work. You may be writing, conducting research or interviews, revising work, or attending meetings. As long as you are being paid, it is a billable hour.
Which came first?
Question: How many billable hours do you need to work per week to become a six-figure freelancer?
Answer: It depends on how much you charge per hour.
Question: How much should you charge per hour?
Answer: It depends on how many billable hours you can work per week.
It’s a bit like the chicken or the egg question, no? One cannot exist without the other, but which comes first? To answer the question, I like to start with my annual revenue target, which starts with six figures—the Holy Grail of freelancers. Unlike the Holy Grail, earning six figures as a freelancer is not a myth. Writers who earn six-figure incomes are all dedicated and disciplined writers. (But they still manage to take some time off to goof around.)
Six figures may be your revenue target, but don’t sweat it if it feels like an unreachable dream right now. To set your annual revenue target, start with your revenue history. How much did you earn last year as a freelancer? It can be difficult to go from a $20,000 or $50,000 income to a six-figure income in a year, so set a realistic target for this year, perhaps a 15 percent increase. If you exceed it, cool! That will help you set a more realistic target for the following year.
Do the math
Annual revenue goal: $ ___________ per year.
Now calculate how much you have to earn per week to hit the target. I am going to give you two weeks off for good behaviour (or vacation).
Weekly revenue goal: $ __________ per year / 50 weeks = $ ______ per week
Now that you know how much you need to earn per week to hit your target, how much do you need to charge per hour? Most writers will tell you they work, or aim to work, 15 to 25 billable hours per week. Based on that, let’s calculate what you have to charge per billable hour. Let’s use a six-figure target and an achievable 20 billable hours per week, and continue to do the math:
$100,000 per year / 50 weeks = $2,000 per week
$2,000 per week / 20 billable hours per week = $100 per hour
So, there is your answer. Or is it? Will you be able to work four billable hours per day, five days per week, 50 weeks per year at $100 per hour? If you are just getting started, probably not. If you have never charged more than $35 or $50 per hour in your life, the thought of charging $100 per hour might give you pause. At the same time, if you are writing annual-report copy for major corporations, or if you are writing speeches for senior executives, you might be laughing at the thought of charging so little.
So, here is what you do if you want to be a professional freelancer:
- Figure out what you want to make per year.
- Determine the number of hours (billable) you are willing to work per week.
- Calculate the amount you need to charge per hour.
- Find clients who are willing to pay your rate, and find enough of them so you can work the number of billable hours you want to work.
It’s that simple. But it takes a lot of work to get there. Again, at this point, if you still aren’t sure what to charge, don’t worry. You’ll read much more on rates and how to calculate quotes before we get to the end of the book. For now, though, do you see why developing a revenue target is so important? If you don’t know how much you want to earn, how can you plan to earn it? How do you know how much you need to earn per week or per hour to meet your annual revenue goal? Setting that annual revenue goal is an important part of establishing your rate and creating your business and marketing plans.
If you want to earn more than six figures, you have to work more hours or charge more per hour. If you want to work less than 20 billable hours per week, and still earn six figures, you need to find clients willing to pay more per hour. Or you have to make money in your sleep. (I might have been asleep when you purchased this book. It took a lot of work to write and market it, but now it earns money while I sleep, am on vacation, or do other billable work.)
You may want a better sense of what the corporate market expects to pay for work but all I can do is repeat: there is no set rate. Sometimes, even different departments of the same company have different rate expectations! We will, however, talk a lot more about money and about issuing quotes….