Money is often a difficult thing to talk about, even when it shouldn’t be. One of the hardest questions for me to answer as a freelancer is, “How much do you charge?” It’s a perfectly reasonable question, but one that always leaves me speechless, at least for a few awkward seconds.
“Well, it depends,” is usually how I start. Then I spend a few more seconds reminding myself that it’s actually okay to charge people money for what I do, and I continue with a long-winded explanation that no doubt leaves the impression that I’m afraid to answer the question.
Reality might not be quite that bad, but it is fair to say that money conversations can be challenging, and there is no single right answer to a question about money. However, in most cases, the best response really is, “It depends,” because every job is different.
Breaking it into pieces
The first question I wrestle with is whether to charge on an hourly basis, or to establish a fixed fee per project. Last week, I had a chance to explore the issue with fellow freelancer, Dawn Oosterhoff, by looking at how the concept of project-based pricing can be applied to editors, as an alternative to charging an hourly rate. Here is a snapshot of what we considered:
The project-based approach
Project-based pricing has a number of advantages. It sets a cost ceiling for the client, which many clients appreciate because it’s predictable. It also doesn’t penalize experienced freelancers for being quick at what they do, in the way that an hourly rate does. (Of course, experienced freelancers can command a higher hourly rate, which is explored below.) Project-based pricing is also an excellent way to represent the full spectrum of experience that you, the freelancer, bring to a given project.
However, project-based pricing also has disadvantages. For editing work, it can be hard to accurately assess the level of effort needed for a job based on a preliminary review. And while the same holds true for hourly-rate services, it’s easier to mitigate the risk by providing clients with a range, and communicating with them promptly if you encounter problems. With project-based pricing, the freelancer is at risk of taking a financial hit if the estimate is too far off. On the flip side, if you are too generous to yourself in a project-based estimate, clients might balk at the cost.
Taking it hour-by-hour
Hourly rates, which feel more like the norm in freelance editing circles, also have distinct advantages. For the freelancer, charging on an hourly basis means you get paid for every hour worked, even if you uncover issues that weren’t apparent at the beginning. Hourly rates are also easy for clients to understand, because it’s evident to them exactly what they’re paying for.
On the other hand, hourly rate jobs can also come with pressure to “just work faster” to reduce costs for budget-conscious clients. It also exposes the difficult question about how to set an hourly rate. Less experienced freelancers will take longer to do a high-quality edit than veteran editors. Newer editors can compensate for this by charging a lower hourly rate, but this can present its own challenges by lowering expectations among the client pool, in an industry where we all want to see professional editors fairly compensated. It can also create challenges down the road for the budding freelancer who eventually wants (and deserves) to raise their rates.
Weighing the risks
So what is a freelancer to do? Even after weighing the pros and cons, we agreed on a couple of key points. No matter what the job is, page two deserves as much effort as page 222. An hourly fee felt like the best way to make sure that happens, because it eliminates any temptation, however subliminal it might be, to hurry through the later stages of a job that’s taking longer you bargained for. Of course, most of us would never do that, but it still prevents us from beating ourselves up for underestimating a job.
Project-based pricing seems most advantageous for less mechanical and more creative endeavours, such as in the freelance writing universe or maybe even in the world of substantive or developmental editing. But for folks whose editing work gravitates more towards copyediting, we closed our discussion feeling safer in the hourly rate universe.
Did we miss any big considerations? What do you think? Share your experience in the comments below.