Writers beware, often the easiest way to lose a potential project with a new client is to state that you charge by the hour, as opposed to levying a fixed fee per word. Naturally, the two models offer differing advantages to service provider and client alike.
The practice of charging by the hour can be advantageous to the writer, as it means that all the time spent researching the background for any article, no matter how brief or comprehensive, is covered and profitable. Often, a client might ask for a 1000-word article in a business magazine – but if it takes the writer three hours to research the content, then two hours to compose and type, that’s five hours -almost a full day. Most self-employed freelancers in developed nations like Europe, the UK and North America need to earn at least in the region of $ 180 USD per day, or the Euro / GBP equivalent. Thus, an hourly rate in the region of $35 USD isn’t unreasonable for a skilled copywriter to charge. However, what if a contract is for many months and involves dozens of Zoom meetings, leaving less time for writing? Does the contractor then use the concept of consumption pricing – which calculates rates based on usage volume rather than required outcomes?
Then there’s the issue of ‘honest’ billing. How does the client know that the writer has actually worked for five hours, when two of those hours could have been spent making coffee, having a shower and walking the dog! Until the contractor and client have developed a longer-term business relationship, that’s another potential stumbling block to hourly billing.
In that case, the ‘fixed rate’ model of the contractor quite simply stating ‘this article will cost you $120′ is fine – as clients can be sure there are no unexpected charges. But then, to complicate matters further, whether a writer charges by the hour, the word or ‘the job’ – what happens if the client says ‘Sorry, we really don’t like this business plan, it needs to be re-written from the perspective of the potential investor…’.
Does the writer still bill for his original thousand words? If the entire piece is re-written, the author has produced 2000 words, but can they bill for all of them? Similarly, if charging hourly, do they bill for the additional two-hour re-write? The worst scenario is when the contractor is charging a fixed job rate, they could end up writing the article three times for the same fee. It’s all a bit of a financial minefield, beset with potential disasters!
It Costs a Freelancer More to Work Than You Might Think
Assuming a day rate of $180, that equates to full-time wages of around $47k gross per annum. The freelancer must pay 10% of that in health insurance and say, 20 % in taxes, leaving a take-home pay of just over $32k. Furthermore, if the contractor takes four weeks’ holiday per year, then 12% is lost – now they’re earning just over $36k. Also remember that if you are ill, there’s no sick pay.
You Get What You Pay For
If a freelancer charges a day rate, from the client’s point of view, they might be paying $180 for an article that could perhaps have been much cheaper if they had employed a contractor from a country where the cost of living is very low. Many freelance copywriters based in South Asia charge as little as USD $0.015 per word – around 90% cheaper than the UK based contractor. Whether that difference in price is justified depends on many factors. For $180 you’re probably getting a well-researched piece of writing with bulletproof grammar, authored by a professional journalist, who will leave the client and their audience genuinely impressed and informed.
Will the client receive that calibre of work for $12? Possibly, or it might well be authored by someone who is not a native English speaker, providing a hotch-potch of misplaced modifiers, terrible typos and ghastly grammar, all scattered liberally with emojis!
Even an established European or American freelancer charging a word-rate of, say $0.05 is only going to be earning $50 for the 1000-word piece. If they can produce it to the high quality required in, say, two hours, that’s not so bad, and the client is getting a fair deal. But what if the research takes a further two hours? Then we’re back to the hourly-rate scenario above.
If the Cap Fits, Wear It
Many freelancers have found that a hybrid model of billing suits both parties:
- In the first instance, the writer looks at the job involved and offers the client a fixed cap, that no matter what happens, the article will cost no more than, say, $240 in total.
- However, the article might cost much less if the research time isn’t onerous, so the freelancer might finish the job in two hours if they know their subject matter, in which case, a simple $36 per hour would equate to a total invoice of $72 – with the following caveat:
- If any re-writes are required, they are done at an agreed fixed hourly or per-word rate – but in any case, even if the article must be re-written five times, the total bill can never exceed the cap initially stated.
Most client / contractor relationships work well this way, because as they get to know each other’s processes, fewer re-writes are required. In the final analysis, it’s all about people being reasonable with each other and striking a compromise. We might also do well to heed the words of 1960s German politician Ludwig Erhard, who famously said:
Compromise is the art of dividing a cake in such a way that everyone believes they have the biggest piece…