While this story may not be relevant to writers already on the higher end of the spectrum, today I’d like to share a story from one freelance writer who went from accepting gigs at as low as half a cent per word to now having advertised rates as high as $.15 per word. I hope those struggling at rock-bottom rates can find a bit of inspiration here to make changes in their writing careers.

Here’s my interview with Writer’s Brew blogger and business and finance writer, LaToya Irby:

When did you begin freelance writing, and what type of writing do you take on?

When I first started freelance writing in early 2006, I took on a lot of keyword-spamming type of articles. You know, the writing equivalent of an offshore shoe manufacturer. It wasn’t what I was ultimately looking for, but those jobs were easy to find and paid quickly. At that point, I was just happy that I was getting paid to write.

What did your typical rate structure look like when you started? Why did you choose to start at those rates?

I was making anywhere between $.005 and $.02 per word. That’s what the jobs paid, so that’s what I took. It didn’t occur to me to ask for anything higher.

In hindsight, if you could go back and change anything about the way you started your freelance writing career, what would you do differently?

I would have spent more time learning the freelance writing business, making contact with other writers, and coming up with a clear plan about launching a freelance writing career. I would have chosen a niche and a target market and focused on building a reputation there.

What are your rates like now? How long did it take for you to make the transition from your previous rate structure to your current rates?

My rates are [at least] 4-5 times higher than what they were in the beginning. Of course, I don’t know if the increase [is] that dramatic considering I moved from $.02 per word to $.08 per word over three years. That’s about a 2 cent increase every year. I charge $35/hour for other types of business writing like copywriting, business letters and business proposals. I didn’t offer those services in the beginning.

Was it “easy” to raise rates? Did it pose any difficulties? What was the hardest part about it?

Sure, deciding to increase my rates was the easy part. The hard part was letting go of clients that didn’t want to pay the higher rate and putting in the work to find clients that would pay them. At the time, it was difficult moving out of my comfort zone, but all I really had to do was start looking for clients in other places. That work was vital to my freelance writing success.

What made you decide to increase your rates in the first place? Was it out of necessity (needed to earn more to get by), pride in your work (you knew your time was worth more than what you were charging), or something else?

It was a little of both. When I started freelance writing, I had a corporate job making close to $60,000 a year. There was no way I could match that salary at the writing rates I was accepting. I would have had to write thousands of articles per year. I realized I could write for more during an episode of Sex and the City. Carrie, the main character who writes a column for the New York Post, mentioned getting paid something like $1.25 a word to freelance for Vogue. I thought “She’s making more per a word than I make per article!” That’s a slight exaggeration, but you get it.

How did your then-clients take the news? Did you ease them into it? Did most stay with you? Did you end up targeting a completely different client base?

I let my clients know I would be increasing my rates and gave them a two-month grace period at the current rate. None of them stayed with me. I understood that their business models wouldn’t allow them to make a decent profit and pay me higher rates. So ultimately, I had to target a different type of client.

Many writers express a certain level of fear when it comes to raising rates–did you experience that kind of emotion? What was the scariest part of the process, and how did that fear either motivate you or hold you back in some way?

I was definitely shy about raising my rates. I was new to freelance writing, I didn’t have any writing credits, and I have a Business degree rather than an English or Journalism degree. I thought those things made me look less attractive to “real” clients. It kept me from hiking my rates up to where I really wanted and needed them to be. I thought it would be better to ease my rates up over time, so I started out with a low increase, like how McDonald’s does with their cheeseburger prices. Only, I’m not McDonald’s and I don’t sell cheeseburgers, so it might not have been the wisest plan. I could have set entirely new rates and reestablished myself in a different market. Which is what ultimately happened, it just took longer.

Has raising your rates made you look at the freelancing life any differently? Is it easier to view it as a career path rather than a way to make extra money for example? Or do you find yourself feeling differently about the actual projects you take on now versus those you started with?

Definitely. Last September, I left my corporate job and started freelancing full time. There was absolutely no way that would have happened if I hadn’t raise my rates. It would have happened sooner if I’d been more aggressive at rate increases. Now that I do this full time, I am a lot more selective about the jobs I take on. I have to be. I love writing and I don’t want to start resenting it, so I only take on projects that I like. I have no problem saying no to a job that pays well, but would make me hate myself in the morning.

If you could say one thing to freelance writers who feel they have to offer very low rates to compete and survive, what would you say to them?

You can’t compete and you won’t survive on low rates. There will always be someone out there who will charge less than you. And that market of clients is always trying to figure out how to pay lower rates for writing. So, figure out why you’re afraid to charge what you’re worth and work on solving that problem. If you feel that you need bylined clips, get some. A lot of writers will tell you not to write for free, but if you have to give away one bylined clip to a credible website or publication to increase your rates, I say it’s a worthwhile investment. That was more than one thing, wasn’t it?

I’d like to thank LaToya for taking the time to share her personal experiences with the very low Web content writing rates we often see advertised, and what she did to start breaking away from that market.

If anyone has anything they’d like to add from their own experiences–tips to help newer or underpaid writers take a step in the right direction–I hope you’ll share with us here in the comments.

“A novice copywriter can start with a low price at first. Companies will eventually increase the pay of a copywriter who always submits quality work.”

I see this being said to new writers of all varieties all the time, and the fact of the matter is that it’s not always true. As a matter of fact, most clients aren’t likely to suddenly start paying you more just for doing the job you were contracted to do, because you chose to sucker them in with a low rate that you didn’t advertise as temporary.

Frankly, I look at this as being two things:

1. Stupid - You don’t have to bid low to build a reputation anywhere. That’s not to say that you should be charging as much as someone with years of experience beyond you or better credentials. However, before you ever bid on any freelance writing gig, you should already know what kinds of projects you want, in what rate ranges, and with what kind of target client market (the ones who need or want your services and who can afford to pay your writing rates). You do nothing but a disservice for yourself if you waste time marketing yourself to folks outside of that target market. Why? Because you don’t earn what you need to be earning, and you then have to spend extra (unpaid) time down the road either trying to make a case for being paid more or marketing yourself to the proper market the next time around. Build a portfolio before you start pitching your services, and you can let clients see that you’re worth what you’re quoting or charging. (And yes, you can build a portfolio with no experience.)
2. Dishonest - Maybe it’s just me, but as far as I’m concerned, if you bid one amount fully planning to up the rates in the near future (and you don’t make that clear up front), you’re being dishonest with your client. When they hire you, they’re thinking they’re getting a great deal. If that deal is going to end, you need to make it clear. It’s one thing for you to re-adjust your rates yearly as normal business. It’s also not a big deal if you’re offering a discount for a limited time, on first orders, etc. and you make that clear up front (so the client knows your rates are going up after the introductory order). But it’s something else entirely to go into what amounts to a professional relationship with the idea of sucking someone in to milk them for more later. Is that common in marketing? Sure. But you’re not simply marketing products here – you’re marketing yourself, and that involves building relationships on trust.

So folks (new writers especially) – stop thinking you have to start ridiculously low in the beginning. If you’ve done your job on the marketing and business planning front before jumping in, there’s really no good excuse for it. Don’t screw yourself over in the long run by wasting time on the wrong target markets, and don’t make yourself look bad in such a heavily referral-driven industry by attempting to “bait” clients with rates you won’t be able to live up to after just a few projects.

Common Freelance Writing Rate Strategies

• Per word
• Per project
• Per hour

What The Writing Rate Types Have in Common

Whether you prefer to charge for freelance writing jobs per word, per project, or per hour, you’ll still need to account for an hourly rate. Finding the most appropriate hourly rate is really the key to setting freelance writing rates. Once you have that number, you’ll simply charge accordingly. If you charge by the hour, that’s easy enough to do. If you charge by the word or by the project, you’ll need to estimate the amount of time a project would take or how many words on average you’re able to write (not just how quickly you can type).

Working Hours vs. Billable Hours

In order to find the best hourly rate for yourself, you’ll need to understand the difference between working hours and billable hours. Working hours include every hour you work (assuming a “typical” full-time work week, we’ll say that’s 40 hours). Billable hours, on the other hand, are the number of working hours that you can actually bill out to clients, minus the hours spent marketing and on administrative duties.

Billable hours are often approximately, or a little more than, half of your total working hours if you’re not neglecting anything on the admin and marketing side. To simplify the numbers, let’s round it to exactly half, and say that out of a 40 hour work week, you would have 20 billable hours. Now we have something to start from.

Salaries vs Yearly Freelance Earnings

It’s easy for a freelance writer to say “I earned $50,000 at my old day job and I got by fine, so I want to set a goal to earn the same amount from my freelance writing full-time.” What’s harder is understanding that the two numbers truly aren’t comparable, and they can’t be interchanged as easily as that.

To get a more realistic number, you would need to figure out your real “cost” in your former full-time job. Think of it from the company’s perspective instead of yours (because as a freelancer, you’ll be playing that role). For example (assuming a US-based writer)…

Your full-time gross salary would have included your portion of taxes, benefit payments, retirement savings, etc. on top of the net take-home pay. Use that as a starting point. Now add on any Medicare and social security taxes the employer had to pay for you as their employee, any contributions they made towards benefits or retirement, the cost of any supplies or other expenses they covered that made your work possible, etc. Now you have a more realistic number regarding what you would need to earn as a freelancer to be in a comparable situation. That number can be significantly more than your gross salary – in this example, let’s say it works out to around $70,000.

You Won’t Always be Working

We’ve already covered the full-time working hours versus billable hours and the real salary you would need to earn to live a comparable life, so you may be thinking that setting an hourly rate is now as easy as dividing $70k by 52 weeks in a year and then by 20 billable hours (which would work out to a little over $67 / hour). But you would still be missing a vital part of the equation.

It’s highly unlikely that anyone is going to work 40 hours per week, for a full 52 weeks in a year. I always suggest deducting a minimum of two weeks to cover a short vacation and a handful of personal or sick days. So at a maximum, I would suggest you factor your hourly rate based on 50 working weeks rather than 52. In my own case, I prefer to take more time off when possible (for short trips, seeing family, getting things done around the house, etc.), and try to account for extra for holidays, so I base my own goals on 45 working weeks.

You Will Have Slow Times

It’s highly unlikely that you’ll never have a slow period in your work. Because of that, the rest of your billable hours throughout the year need to account for any possible lapses. I’d personally suggest that you tack on 10-20% to your income goal we established earlier, or subtract another few weeks from your expected working weeks to get a more realistic calculation that won’t leave you scrambling for extra income later.

Let’s Crunch the Numbers

Given the example we’ve been talking about, we have a freelance writer who’s looking to set their freelance writing rates based on 20 billable hours per week to earn $70,000 with an expectation of 45 working weeks (using that rather than 50 to account for the slow periods instead of adding a percentage onto the goal gross salary). So the hourly rate would be calculated like this:

$70,000 / 45 working weeks = $1555.56 per week

$1555.56 per week / 20 billable hours per week = $77.78 per hour

or

Salary Goal / Working Weeks / Weekly Billable Hours = Hourly Rate

Adapting Your Hourly Freelance Writing Rates

You now have an hourly rate established which you’ll need to earn to reach your yearly income goals as a freelance writer. Now all you have to do is adapt that hourly rate to fit the pricing model you prefer (per word, per project, etc.).

For example, if you want to charge per project, and you know that it takes you an average of ten hours to research and write a comprehensive business plan for a client, given this scenario, you would charge $777.80 per business plan. I would actually suggest that you round it up to $800, not only because it makes for easier billing and marketing, but also because rounding up a bit helps to account for any “problem clients” who may take an unusually large amount of time to get you what you need for a project, or who may demand excessive edits compared to others. In this case, if you really wanted to round up more to account for those things, you could charge a flat $1000. Keep the risk level of each type of project in mind when you figure out your per-project rates.

As another example, let’s look at setting a per-word rate with the above scenario. Let’s assume that you know you can write about 1000 words per hour within your niche specialty with proper research and editing. Simply divide the hourly rate by the 1000 words you can write per hour on average, and you’ll get a per-word rate of approximately $.08 / word. Again, I would suggest that you increase it slightly to account for any slow periods where you may not be able to fill your full 20 billable hours – so in this case, let’s say $.10 / word. So if someone hired you to write a 500 word article, you would charge them $50.

Keep in mind that these estimates are going to work much more effectively for a freelance writer who’s a specialist in their niche (because they’re intimately familiar with the best research sources for the topic and how much time the research on top of their existing knowledge would take) as opposed to a generalist who can’t always know the amount of research needed or where to go for it, who won’t be able to write as quickly because they’re familiar with a topic, and who will likely have to spend more time editing and fact-checking. It would seem then that a generalist should charge even more. However, clients are rarely willing to pay more for a general writer than an expert in a niche (meaning niche specialists can choose to charge a premium rather than just what they need if they want to). It’s just something to keep in mind, and another case for specialization in your freelance writing career.