All writers need a rate. You need to have a set amount that you charge for your services.
Well, you know that and we’ve been through tips on creating a writer rate. I’ve often shared that having an hourly writer rate for a basis is a good idea.
How do you go about creating your hourly writer rate? Just what do you need to set it out and decide how much you need to make? Here are the steps that I take to create my hourly rate—and I’ve had to go through them again recently due to a change of country.
Work Out Your Outgoings
Make a note of all of your outgoings. This isn’t just about business but about all of the outgoings you have.
Are there two of you in the household making money? Halve the outgoings for your share—or whatever percentage you and your partner agree to pay. We work 50/50, as we’re a partnership. Although with the change of country, we only have one income, so I currently have to cover all the outgoings.
Add up all the outgoings for the month. This tells you the amount that you need to make by the end of the month. Don’t forget a little extra added on so you can live and not just scrape by and so you have some money to go into your savings.
Multiply this by 12 for the 12 months in a year.
Determine Your Working Hours
How many hours are you going to be working? This will need to include your unbillable hours—those where you’re doing your accounting or marketing. It’s still all work!
Now take away the unbillable hours. This will give you a guide on the amount of hours you work a week that you will actually be paid for. It’s important as it will affect your hourly writer rate.
Now multiply this by the number of weeks you’ll work in a year. I make sure I take four weeks off a year because I value my time with my family. When and how I split up those four weeks is up to me. But I make sure I only count billable hours for the weeks that I’ll actually be working.
Divide the Outgoings By the Billable Hours
Let’s assume some figures for this part.
Assume that you need to make $4,000 per month. That’s $48,000 over the course of the year. If you’re like me, you need to make that within the space of 48 weeks.
Let’s say you work 30 billable hours a week (6 hours, 5 days a week). That is 1,440 hours per year.
Divide the 48,000 by the 1,440. That gives you around $34 per hour that you will need to make.
Now You Can Use Your Hourly Writer Rate
Now it’s time to use your hourly writer rate when negotiating prices with your clients. I always suggest to start off higher. That hourly rate is your bare minimum that you need to make, unless you want to work more billable hours.
Your hourly rate can help you set project rates—work out how many hours the project will take and then multiple those hours by your hourly rate for the project price.
It can also help you create your price per word if clients prefer that—work out how many hours it takes to write a 500 word article and then divide the amount you would need to make in that time by your hourly rate.
For example, if it took you two hours to write a 500 word article, you would need to make $68 with that above hourly writer rate. Divide the $68 by 500 and it gives you 0.136. So, you need to charge $0.14 per word.
That’s how I work out my hourly writer rate. It’s quick, simple, and effective.