Rogue Ink

July 11, 2008

The Money Talks, Day Two: Hourly Rates, Calculation and Confirmation. And Confusion.

Filed under: Writing — Tei @ 2:17 am
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As many people have chronicled, freelancing means you are not only your own boss, you are your own accountant, secretary, marketing director, manager, public relations assistant, customer service representative, and intern. You are also that guy who is totally useless but who is so distinctly socially unnerving that no one questions the reason he is ever issued a paycheck. You are generally that guy when no one else is watching (which is what makes you different from that guy) but still. But you know you have moments when you wake up in the morning all cockeyed and unshowered and wander over to your desk vaguely scratching at your armpit and smiling in a vaguely disturbing way at the dream you sort of half-remember. That guy’s in there.

Assorted Professions Hours

Now, I am not going to calculate the value of those professions’ time. Especially creepy guy, because whatever he makes, it’s too much. Furthermore, if we actually figured out an hourly rate for each of those professions, we would discover something we had suspected all along but refused to say aloud in hopes that we were wrong. But we weren’t wrong, were we? No. For we are Legion. Or something. What was I saying?

Oh, yes. Whatever the combined total of the hourly rate for those professions is, you can’t afford it. That’s right. You can’t afford you. You will never, ever be paid enough. This is the fact of freelancing. Welcome to the party. Your much-needed booze is at the bar, where it’s supposed to be, but you probably can’t afford anything, so it’s good that the pub only serves theoretical internet booze, and not the real stuff, or you’d be sadly staring at a bottle of Glenfiddich about now wondering why at least the boss part of you doesn’t get paid a decent wage.

So let us abandon the battle of paying those professions a reasonable wage. In fact, we shall not pay them a wage at all. We shall instead double the wage we pay ourselves for our actual profession. Because let’s face it, you will never, in all your time as a freelancer, be able to issue an invoice that states someone owes you for accounting that you did for your own business. Although that would be a more honest way to go about it, sadly, that is not the way of the world. Which is why we are the Rogue.

Freelancer Hours

You don’t get paid at all for Assorted Professions hours. That sucks. So how much do you get paid for the Freelancer Hours?

Remember the first day of the Money Talks, where we figured out how much money I had to make daily? It was about $230. We’re going to round that number up to a solid $300 a day. Theoretically, I would work an eight-hour day, which would give me an hourly rate of about $35. Except that’s not at all what I need to make by the hour. Because of the Assorted Professions, who all need to get paid too.

Half your day is going to be taken up with work that is not Freelancer work (we’re going to discuss this more tomorrow, but assume for the moment that I am correct. Go on. It won’t hurt you). Therefore you need to make double your hourly rate every time you do billable Freelance work. Half for the Freelancer, half for the Assorted Professions. I told you they were never going to make anywhere near enough money.

So $300, divided by four hours now, is $75 an hour. Which, as it happens, is in fact my rate.

However – and here’s the kicker – this is actually a bad way to calculate an hourly rate. This is a fantastic way to confirm that your hourly rate is in fact going to work for you, but it’s a lousy way to calculate one. Note: do not calculate your hourly rate off of the money you’d like to make. You will screw yourself, because you can come up with a budget (dinglefrapp, for those of you still with me) that is astronomical and justify just about any hourly rate in the world. Which is lovely, but totally useless when it comes to setting a rate that people will pay.

Although I double-dog dare you to try quoting someone a rate of $1,200 an hour and try to justify it by explaining that your Dinglefrapp Plus demands that hourly rate. Go on. I’ll wait. Meanwhile, the rest of us will calculate an hourly rate the normal way, and confirm it with the strategy I just defined.

The Simple Way to Pick an Hourly Rate

Ask around.

I know. It sounds so dumb. I wish I could say “climb a the tall mountain beyond the sunset. You will see a man by a tree. Do not speak to him, or he will kill you. Instead, walk around the tree and talk to the toad on the ground. Say, “Potato salad.” The toad will open his mouth, revealing a pebble shaped like a pomegranate seed (or possibly an actual, fossilized pomegranate seed). Take the pomegranate seed to the original statue of Persephone and stick it into the stone pomegranate in her hand. Then do the hokey-pokey. A dove will fly out of her hair and tattoo a number into your forehead with its beak. That number is the rate you should charge all and sundry for the services you perform.”

I cannot say this. (Actually, I can, I just did. But I lied.) Ask around. Ask every freelancer in your profession you can get your hands on. If they won’t tell you how much they charge – and this is the really smart bit – ASK THE PEOPLE WHO HIRE FREELANCERS. Ask marketing directors, PR people, corporations with a lot of output, hit up every contact you have and ask them how much they paid by the hour.

You will mostly get project quotes, not hourly quotes. That’s fine. Figure out how long it would take you to do the project, divide those hours by the total project quote, and you will have an hourly rate. Yes, I know. You’d think they’d encrypt this information or something, but no, it’s just basic division.

For freelance copywriters, I found that a standard basic industry rate ranged from $50 to $150 per hour. Most of the people up past $100 are seriously famous copywriters like Bob Bly, and I am nowhere near Bob Bly. I’m also not bottom of the barrel. So I was dealing with somewhere between $50 and $100, and guess where I wound up? That’s right. $75 an hour.

And then I made myself a dinglefrapp, and confirmed that $75 an hour was going to meet all my needs.

For the Clever People

Some of y’all are doing the math right now and saying, wait a second. $75 an hour times 8 hours in a workday times 40 hours a week times 50 working weeks in the year IS A SHIT-TON OF MONEY, DUDE. (And by ‘shit-ton’ we mean ‘$120,000’. You totally DO NOT MAKE THAT MUCH MONEY.

True. I don’t. Well done, mathematicians. But you have forgotten something, have you not?

Assorted Professions also need TIME.

Tune in tomorrow, where I will thwart you number-people yet again.

Subscribe. I have a bad taste in my mouth from all the math.

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