{"id":5878,"date":"2015-07-31T06:00:00","date_gmt":"2015-07-31T11:00:00","guid":{"rendered":"http:\/\/thewritelife.com\/?p=5878"},"modified":"2015-08-03T09:25:15","modified_gmt":"2015-08-03T14:25:15","slug":"the-smarter-way-to-set-freelance-writing-rates","status":"publish","type":"post","link":"https:\/\/thewritelife.com\/?p=5878","title":{"rendered":"The Smarter Way to Set Freelance Writing Rates: Avoid Hourly Work"},"content":{"rendered":"

The following is an excerpt from Breaking the Time Barrier: How to Unlock Your True Earning Potential, a free ebook offered by our friends at <\/i>Freshbooks<\/i><\/a>. <\/i><\/p>\n

In the ebook, Freshbooks co-founder, CEO and co-author Mike McDerment makes the case for independent workers <\/i>earning what you deserve for your hard work<\/i><\/b>.<\/i><\/p>\n

It\u2019s a great resource for freelancers, and it\u2019s also an easy read — no one\u2019s throwing numbers or numbers or worksheets at you. Instead of textbook-style lessons, Breaking the Time Barrier shares a conversation between Steve and Karen, who talk through Steve\u2019s hangups about how to price his web-design services.<\/i><\/p>\n

Whether you\u2019re writing white papers, blog posts, or tweets, you know how long it takes to craft the written word. Are you getting paid enough? <\/i><\/p>\n

Read on to find out how changing your <\/i>freelance writing rates<\/i><\/a> from hourly to project-based rates can help you maximize your earning potential — and then <\/i>get your own copy of Breaking the Time Barrier<\/i><\/a>!<\/i><\/p>\n

 <\/p>\n

\"Breaking<\/a>
\nOn Friday, Steve stepped into Karen\u2019s caf\u00e9, a cozy spot with leather chairs and shelves lined with old books. He looked around, taking in the aroma of fresh coffee, then made his way to a back table, where Karen was waiting for him.<\/p>\n

After Karen greeted him warmly he settled into his chair, thanking her for meeting with him. \u201cI\u2019m happy to help,\u201d she said before a server came and took their order.<\/p>\n

Then Karen invited Steve to sketch out his solopreneur journey, which he did over the clatter of coffee cups that surrounded them. When Steve was done she gave him a one-word verdict: \u201cPricing.\u201d<\/p>\n

\u201cPricing?\u201d he asked.<\/p>\n

She nodded as their coffees arrived. \u201cWell\u2026pricing and positioning<\/a>. From what you\u2019ve told me, it sounds like the way you think about pricing is holding you back.\u201d<\/p>\n

\u201cIn what way?\u201d<\/p>\n

\u201cIf someone wanted to know what exactly you sell to your clients, what would you tell them?\u201d<\/p>\n

\u201cMy services. Web design.\u201d<\/p>\n

\u201cHow do you charge for your services?\u201d<\/p>\n

\u201cI charge them a fee based on my hourly rate.\u201d<\/p>\n

\u201cThen aren\u2019t you really selling hours?\u201d Karen asked.<\/p>\n

\u201cBut I use those hours to design websites.\u201d<\/p>\n

\u201cDo those websites have any positive impact on your clients?\u201d<\/p>\n

\u201cSure,\u201d Steve said.<\/p>\n

\u201cDo you think it would make more sense to charge a fixed fee that represents the value of the impact your websites have on your clients?\u201d<\/p>\n

\u201cWell, I do mostly charge fixed fees\u2014\u201d<\/p>\n

\u201cBut those fees are based on a multiple of your hours, right?\u201d<\/p>\n

\u201cRight,\u201d he said.<\/p>\n

\u201cI\u2019m talking about fixed fees based on value, not time.\u201d<\/p>\n

\u201cI guess I\u2019m not sure what you mean by value.\u201d<\/p>\n

\u201cThe value of what I do,\u201d Karen said, \u201cis based on the impact I can have on my client\u2019s business. Impact is how they value my services. So I look at pricing from their point of view. They don\u2019t hire me to design a website for the sake of designing a website. They hire me to design a website that\u2019s going to help them grow their business.<\/p>\n

“I find when I look at it like that \u2014 from their perspective \u2014 it\u2019s clear I\u2019m not selling time. Instead, I\u2019m selling a solution<\/b> that is going to make an impact for my client <\/b>and achieve some business objective.\u201d<\/p>\n

\u201cSo, how do you set your prices then?\u201d Steve asked.<\/p>\n

\u201cLet me give you an example. A couple of months ago I sat down with a client to talk about their website. I\u00a0asked them to tell me why they thought they needed a website. When we drilled down into their reasons, they said they believed a website could generate an additional $100,000 of profit annually for their business.<\/p>\n

“So I asked them to make an investment of $20,000 in the website. Based on your hourly pricing model, you\u2019d probably charge in the area of $2,000 to $2,500.\u201d<\/p>\n

\u201cDid they agree to your price?\u201d<\/p>\n

\u201cYes. Wouldn\u2019t you invest $20,000 to generate $100,000?\u201d<\/p>\n

Steve agreed and he was excited about what Karen was telling him, but lots of questions were flooding his brain.<\/p>\n

\u201cI get your math,\u201d he said, \u201cbut doesn\u2019t it come down to time in the end anyway? I mean, you spend\u00a0a certain amount of time on the project. You could theoretically work out your hourly rate and so could your client. You\u2019re probably effectively charging $400 an hour, or something like that. What if your client thinks that\u2019s too high?\u201d<\/p>\n

\u201cYour math may be right, but I\u2019m not a collection of hours<\/b>,\u201d Karen said. \u201cI\u2019m the accumulation of all my <\/b>skills and talents.<\/b> I\u2019m wisdom and creativity. I\u2019ve stopped seeing myself as a punch card. My clients don\u2019t see me that way either.<\/p>\n

“Yes, sometimes, I\u2019ve had to change my client\u2019s mindset,” she continued. “But it starts with me, first, just as it starts with you. You have to forget selling time. The best thing you could do for yourself is to get the concept of time out of your head.\u201d<\/p>\n

\u201cDon\u2019t I need an hourly rate for some stuff? Everyone I know has one.\u201d<\/p>\n

\u201cYou know me now, and I don\u2019t have an hourly rate.\u201d<\/p>\n

\u201cSo I should never charge by the hour?\u201d<\/p>\n

\u201cTo be honest, when I started out I charged an hourly rate and I think hourly rates make sense for someone just starting out, someone with little experience and limited skill. But over time I established myself and my credibility, which led to great references. When that happens, you begin to outgrow the cost-plus pricing model <\/a>of charging by the hour. So if you stay with that pricing model, you\u2019ll find it very limiting.<\/p>\n

\u201cFor example,\u201d Karen continued, \u201csince there are only so many hours in a year, it puts a cap on how much revenue you can collect in a year, and it means that the only way to make more money is to work more hours. These are limits\u2026 and the truth is, they are false limitations that lead to bad behaviors, like burning yourself out by working around the clock in an effort to earn more.\u201d<\/p>\n

\u201cThat\u2019s me,\u201d Steve said.<\/p>\n

\u201cMe too, when I first went out on my own, until I learned that a value-based approach<\/a> to pricing your services is a powerful way to break through the time barrier and avoid the bad behaviors.<\/p>\n

“But like a lot of people, I didn\u2019t start from scratch, and neither did you. You started your business after many years of design experience. You already had the ability to create value for your clients. And now, after being in business for a while, you\u2019ve got references you can build on. You\u2019ve also had the chance to see the impact your projects have had. I\u2019m sure it\u2019s far greater than you expected.<\/p>\n

“Think of the value you created for your clients. That\u2019s an impressive story that you can use to move away from charging based on time to charging based on value.\u201d<\/p>\n

Are you on board with Karen\u2019s advice? Have you tried value-based pricing rather than charging hourly rates? <\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Ready to get paid for the true value of your work? This free guide will inspire you to adjust your freelance writing rates.<\/p>\n","protected":false},"author":194,"featured_media":3632,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[270,271,269],"class_list":["post-5878","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marketing","tag-freelance-pricing","tag-getting-paid","tag-pricing"],"_links":{"self":[{"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/posts\/5878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/users\/194"}],"replies":[{"embeddable":true,"href":"https:\/\/thewritelife.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5878"}],"version-history":[{"count":0,"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/posts\/5878\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thewritelife.com\/index.php?rest_route=\/wp\/v2\/media\/3632"}],"wp:attachment":[{"href":"https:\/\/thewritelife.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thewritelife.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thewritelife.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}