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    Freelancing: Setting Your Rates and Raising Your Rates

    "How much do you charge?"

    If ever a question was designed to bring up all your issues around confidence and self-esteem, "How much do you charge?" is the one.

    In my copywriting classes, pricing bothers students, and it bothers me too, because there's no clear instruction that I can give them. How much you charge depends on many factors, including:

    • your experience;

    • the client and his/ her budget;

    • your current financial situation;

    • your desire to do the work (or your lack of desire);

    • how easy the client is to work with --- does he/ she pay on time, or do you have to send several reminders, does the client micro-manage projects, does client have a "know it all" mindset?

    Vital: Value yourself, and your time, and others will value it too

    Remember the saying: "No good deed ever goes unpunished?" In my experience, it's accurate whenever you try to give clients a price break.

    This is a hard lesson to learn. Although I've always made it a policy not to do freebies, or to work for anything less than my base rate, occasionally I let insanity gain the upper hand. Friends of a friends were starting a small hotel in the country, and wanted me to do the copy for their brochure. I should have known better, but I gave them a big price break. I charged them two hours, for six hours of work.

    Huh! Not only did I have to send them a reminder that they hadnít paid, but they also managed to wrangle three hours of marketing consultation for free. For several weeks, every time I opened my Inbox, I'd receive another communication from them.

    Finally I told them I'd be charging them for one hour to make yet more changes to the brochure. Back came a message with a very snippy tone: "I donít think it will take an hour to make these very minor changes, at all ---"

    I resisted the impulse to tell them to write it themselves, but I did send them an itemization of all the time I'd already spent on their project, with how much I would have billed them at my usual rates. I copied my friend on the message, too.

    Your time is all you've got. Whenever you're tempted to write something at less than your usual rates, make a note of how much money you're losing.

    Setting your rates when you first start your freelance copywriting business

    When you start out, it doesn't much matter what your rates are, because you'll soon discover whether you're charging too much or too little. Aim to set your rates at what the other copywriters/editors in your area are charging. You can assume that some of them have been in business long enough to know what they're doing.

    The first big surprise you'll get is that although you work 40 to 50 hours a week, those are not all billable hours. As a rule of thumb, around half the hours you work are billable, so if you're putting in 50 hours, around 25 hours will be billable.

    If you're wondering why more hours arenít billable, the answer is what I call "pre-work" and "after-work". Let's see how pre-work/after-work works, so to speak, and how these processes eat up working hours. We'll assume that you're an established copywriter with a stable of six to ten clients.

    It's Monday morning and by 11am you've got three "Please quote" requests in your email Inbox. You read the requests, and then do research for each quote. You need more information for two of them, so you ask for that. By the end of the day, you've spent 1.5 hours on these quotes. You gain one job from this exercise, a month later. (The other jobs died on the vine, the clients decided not to pursue them for reasons unknown to you.)

    During the day, you get feedback on a couple of jobs you've done recently. You spend another couple of hours fiddling around with these, answering questions, and talking to various people. You send out a news release for your own business, and look back over the work you've done in the past week so you can invoice clients: that's another couple of hours.

    You're on a monthly retainer for a graphics design business, so you spend another two hours interviewing and chasing up material for a monthly newsletter for them. (Only one hour of this is covered by your retainer.)

    Therefore in total, you've spent around 7.5 hours on Monday on necessary work which isn't billable.

    You end up working 12.5 hours on Monday, of which five hours are billable.

    What can you learn from this? You learn that if you charge $60 an hour, you're actually charging $30 an hour, because you need to cover (some of ) the non-billable hours that you MUST work. Please note: you'll never cover all your non-billable hours, and it's useless to try. Your clients want to feel that you're interested in them and in everything they do, and that they can come to you with questions --- by necessity, as a goodwill gesture, much of this work is done out of the goodness of your heart for free.

    Therefore, remember that although you may be charging $60 an hour, this doesnít translate to $2,400 for a 40-hour week.

    Raising your rates

    It's up to you how often you raise your rates. I aim to raise them once a year, but this never happens. I tend to raise them on average every three years, across the board. This is usually when I figure out that the time seems to be leaking away, and ask myself how come I'm working so hard and making so little money?

    When you do decide to raise your rates, you may worry that you'll lose clients. I canít guarantee that this won't happen, but if you're doing a good job, then you wonít lose any clients. In fact, raising your rates can work to eliminate some smaller clients, or clients who tend to be a lot of aggravation and work.

    The next question, once you've decided to raise your rates is: how much do I raise them by?

    I aim to raise them by 10 to 15 per cent. You can raise them by 50 per cent or even double them, if you wish. A copywriter colleague had been working for an agency for a year, when he discovered that the agency was using his work for other clients. He only discovered this by chance. He's a real estate specialist, and one day he was reading an ad in an industry magazine and thought he recognized the words, but he'd never worked for this client. The agency had done a copy and paste job to re-use his copy. He immediately doubled his rates to the agency.

    When you first raise your rates, raise them for new clients. Then, when the time seems right, you can let your current clients know that your rates have gone up. I've asked colleagues how they do this. Do they send out an announcement, or just quietly raise them? Out of eight people I asked, seven simply raise their rates.

    I put a small "Please note: our base rate is now $X per hour" on the bottom of invoices.

    Good luck with setting your rates. Over time, you'll work out a process which works for you.

    Copyright © Angela Booth

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