SETTING YOUR RATES AND RAISING YOUR RATES

How much do you charge?"

If ever a question was designed to bring up all your issues
around confidence and self-esteem, "How much do you charge?" is
the one.

In my copywriting classes, pricing bothers students, and it
bothers me too, because there's no clear instruction that I can
give them. How much you charge depends on many factors,
including:

* your experience;

* the client and his/ her budget;

* your current financial situation;

* your desire to do the work (or your lack of desire);

* how easy the client is to work with --- does he/ she pay on
time, or do you have to send several reminders, does the client
micro-manage projects, does client have a "know it all" attitude?


=> Vital: value yourself, and your time, and others will value it
too

Remember the saying: "No good deed ever goes unpunished?" In my
experience, it's accurate whenever you try to give clients a
price break.

This is a hard lesson to learn. Although I've always made it a
policy not to do freebies, or to work for anything less than my
base rate, occasionally I let insanity gain the upper hand.
Friends of a friend were starting a small hotel in the country,
and wanted me to do the copy for their brochure. I charged them
two hours, for six hours of work. Not only did I have to send
them a reminder that they hadnÆt paid, but they also got another
three hours of consultation free. For several weeks, every time I
opened my Inbox, I'd receive another communication from them.

Finally I told them I'd be charging them for one hour to make yet
more changes to the brochure. Back came a message with a very
snippy tone: "I donÆt think it will take an hour to make these
very minor changes, at all ---"

I resisted the impulse to tell them to write it themselves, but I
did send them an itemization of all the time I'd already spent on
their project, with how much I would have billed them at my usual
rates. I copied my friend on the message, too.

Your time is all you've got. Whenever you're tempted to write
something at less than your usual rates, make a note of how much
money you're losing.


=> SETTING YOUR RATES WHEN YOU FIRST START YOUR FREELANCE
COPYWRITING BUSINESS

When you start out, it doesn't much matter what your rates are,
because you'll soon discover whether you're charging too much or
too little. Aim to set your rates at what the other copywriters/
editors in your area are charging. You can assume that some of
them have been in business long enough to know what they're
doing.

The first big surprise you'll get is that although you work 40 to
50 hours a week, those are not all billable hours. As a rule of
thumb, around half the hours you work are billable, so if you're
putting in 50 hours, around 25 hours will be billable.

If you're wondering why more hours arenÆt billable, the answer is
what I call "pre-work" and "after-work". Let's see how pre-work/
after-work works, so to speak, and how these processes eat up
working hours. We'll assume that you're an established copywriter
with a stable of six to ten clients.

It's Monday morning and by 11am you've got three "Please quote"
requests in your email Inbox. You read the requests, and then do
research for each quote. You need more information for two of
them, so you ask for that. By the end of the day, you've spent
1.5 hours on these quotes. You gain one job from this exercise, a
month later. (The other jobs died on the vine, the clients
decided not to pursue them for reasons unknown to you.)

During the day, you get feedback on a couple of jobs you've done
recently. You spend another couple of hours fiddling around with
these, answering questions, and talking to various people. You
send out a news release for your own business, and look back over
the work you've done in the past week so you can invoice clients:
that's another couple of hours.

You're on a monthly retainer for a graphics design business, so
you spend another two hours interviewing and chasing up material
for a monthly newsletter for them. (Only one hour of this is
covered by your retainer.)

Therefore in total, you've spent around 7.5 hours on Monday on
necessary work which isn't billable.

You end up working 12.5 hours on Monday, of which five hours are
billable.

What can you learn from this? You learn that if you charge $60 an
hour, you're actually charging $30 an hour, because you need to
cover (some of ) the non-billable hours that you MUST work.
Please note: you'll never cover all your non-billable hours, and
it's useless to try. Your clients want to feel that you're
interested in them and everything they do, and that they can come
to you with questions --- by necessity, as a goodwill gesture,
much of this work is done out of the goodness of your heart for
free.

Therefore, remember that although you may be charging $60 an
hour, this doesnÆt translate to $2,400 for a 40-hour week.


=> RAISING YOUR RATES

It's up to you how often you raise your rates. I aim to raise
them once a year, but this never happens. I tend to raise them on
average every three years, across the board. This is usually when
I figure out that the time seems to be leaking away, and ask
myself how come I'm working so hard and making so little money?

When you do decide to raise your rates, you may worry that you'll
lose clients. I canÆt guarantee that this won't happen, but if
you're doing a good job, then you wonÆt lose any clients. In
fact, raising your rates can work to eliminate some smaller
clients, or clients who tend to be a lot of aggravation and work.

The next question, once you've decided to raise your rates is:
how much do I raise them by?

I aim to raise them by 10 to 15 per cent. You can raise them by
50 per cent or even double them, if you wish. A copywriter
colleague had been working for an agency for a year, when he
discovered that the agency was using his work for other clients.
He only discovered this by chance. He's a real estate specialist,
and one day he was reading an ad in an industry magazine and
thought he recognized the words, but he'd never worked for this
client. The agency had done a copy and paste job to re-use his
copy. He immediately doubled his rates to the agency.

When you first raise your rates, raise them for new clients.
Then, when the time seems right, you can let your current clients
know that your rates have gone up. I've asked colleagues how they
do this. Do they send out an announcement, or just quietly raise
them? Out of eight people I asked, seven simply raise their
rates.

I put a small "Please note: our base rate is now $X per hour" on
the bottom of invoices.

Good luck with setting your rates. Over time, you'll work out a
process which works for you.

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