How low is too low?
There’s a debate raging; how low is too low for a qualified freelancer? I’m watching various debates grow, on LinkedIn and some freelancer websites, about hourly rates. The comments range from articulate and reasoned to full-on rants. Clearly this is an emotive subject.
When I started out as a freelance copywriter and marketing consultant I took a great deal of time in working out what my hourly rate should be. So many ways to cut the pie, as clients often have their own requirements in pricing up a job – some per word, some per page, some per hour, some fixed price. I opted for the fairly uncomplicated approach – work out what you’re worth per hour and try to stick to it.
I looked at my overheads that needed to be covered, how many hours I could reasonably work per week/month and year, then converted that into an hourly rate. Great! I have a starting point; my breakeven rate. I used this to then work out the other variations of per page/ per x words etc. I was on a roll! But then there’s the sticking point. When you are starting out, what’s the difference between earning and business development? Is earning some money, better than standing firm like a stoic guardian of hourly rates?
How low is too low?
To be honest, I’m still trying to work this one out; it’s a balancing act that needs careful monitoring. There are many considerations in working out your own personal ‘too low’. The main areas to look at when setting or agreeing a rate:
Is some pay better than no pay?
Why work at a rate that is lower than or close to the minimum wage?
Do you want to work for a client that undervalues your expertise?
Are you helping a start-up with limited finances with a view to being there for them when they can support better rates?
Is it a great job for your portfolio?
What’s the level of background support you are offering – is it a full service or via a freelance jobsite where the relationship and admin limited?
Is the monetary value of less importance than the writing?
How can you compete with overseas rates -should you reduce your hourly rate to compete merely on price?
Does dropping your price influence your value proposition?
Identifying where you (or where freelancers you want to employ) stand on the core issues will enable you to make the choice that’s right for you. Only you know what you consider value for money. That’s what it boils down to.
Find your tipping point
It’s all about finding that all-important tipping point. For me, I look at jobs individually and decide whether they fall into the ‘work’ or ‘business development’ or ‘out the box’ categories. Business development (where the project acts as an introducer to more work) or out the box (where it’s a really interesting project that I just have to get involved with and it’s a good portfolio piece) I will introduce some movement on my hourly rate. It is important for me to ensure that my value is not undermined, so as a personal choice I tend to offer a billing structure that concentrates on providing additional hours at zero cost rather than reducing my hourly rate. This way I am transparent about my rates, whilst enabling me to be flexible to bring in the right sort of work.
It may be a cliché but, when assessing or deciding on a rate, have faith that the majority of people understand that you only get what you pay for.
Julia Beeton, The Word Artisan. Remember, all copy deserves to be great copy so use a brilliant copywriter…