Hourly rates can be a “fright-fest” unless you explain that because the project is so small that it is based on a cumulative total of hours involved.

So thanks.

That said, coming up with a flat fee can be difficult. I do a lot of book writing, so I use a per word rate to generate a flat fee. If the project is going to require a ton of research, I add .10s of cents to my word rate, which I try not to let go below a certain amount to begin with.

Of course, I *never* share my per word numbers with clients, because then they’ll want the same per word rate imposed on projects that might need more research or interviewing time or whatever.

I actually had one client ask me once, “How come you are charging more per word on this book than the last one we hired you for? Why are you raising rates on us?” I assured them that I don’t charge by the word, because in reality I don’t. I just use per word rates as a way to find my own personal ballpark for what I should be charging for a flat fee – b/c since every project is so different, it can be hard to know what to charge!

The owner of that business probably didn’t consider that a self-employed writer doesn’t get paid for every working hour. I gather that for writers who work 35-40 hours/week, 15-20 “production hours” per week is typical — 25 at most.

That business owner was probably thinking, “Let’s see… $70/hour times 40 hours/week [minimum] — hey, that’s $280,000/year! I’m not getting THAT from my business!”

Sounds like he needs a business development program before he needs a writer.

And even if a writer did charge $30/hour, and managed to get 2,000 billable hours in a year — that’s only $60K gross, before expenses and taxes. And forget about having any leisure time. Those are corporate attorney billing numbers — and their salaries start in the six figures, with four weeks of vacation.

When it comes to “hourly rate,” it seems that clients either don’t run the numbers at all, or they run them incorrectly.

Two things: When asked about the flat rate, I always mention that I’ve found my clients prefer to know their costs up front, rather than guess what it might cost based on my hourly rate. They always think: “Yeah, I’d prefer to know my costs up front too…” I think people are conditioned to ask hourly rates, without actually thinking about what they really want to know: how much is this gonna cost me?

Second, the downside to flat rates is that if the project does balloon, you have to be on top of it. Give a flat rate for a set list of services, and make it clear that the quote would change if the project changes. If the client wants to add “just one more web page” to the project, ensure that they are clear this is not included in the original quote, and that you will adjust the bill accordingly.

I always readjust the quote up front, rather than tack it on at the end. This approach, I find, makes for less headaches at the end when you send them the final bill…!

~Graham

And Beth makes a good point about hourly rates: Quote an hourly rate, and you potentially give the client the power to tell you how you should be spending that time, and how much time should be spent on what, when, in fact, they don’t know how the process works. Stick to flat rates and you stay in control of things…

And Dave, GREAT point about asking clients what they pay for raw materials if they ask you for your hourly rate. That’s roughly equivalent, and they should get the point.

So much of this underscores a fundamental truth about this business: tell clients how things work, and they’re likely to follow. Give them the opportunity to “direct traffic” by telling them your hourly rate, and you give up some of your freedom.

PB