Business people are often unsure of what they should pay for freelance business writing services provided by freelance business writers.
Business writers new to freelancing might not know what they should charge for their freelance business writing services.
This article looks at the issues businesses face when they need freelance business writing services. It will also help freelance business writers charge fair and competitive rates for their freelance business writing.
We begin by looking at a hypothetical business writer and his experience of moving from being a full-time employee to working as a freelance business writer.
The Story of Mr Business Writer
A writer, we’ll call him Mr Business Writer, works as an employee for an Australian company and hears that some freelance writers charge $70 per hour for their work. Mr Business Writer works for a good company. He has job security, but he’s tired of commuting to the office every day.
After hearing what freelance writers charge, Mr Business Writer quickly calculates the sums in his head. He figures he’ll make $2,800 per week from freelance business writing if he works 40 hours per week.
He gets out his calculator and analyses the details.
“Wow,” he says to himself. “I’ll be making $134,400 if I only work 48 forty-hour weeks each year.” (48 weeks x 40 hours per week x $70 per hour)
Mr Business Writer is on a salary package of $80,000 with his current employer. He thinks about the larger salary and the freedom that being a freelance business writer will bring. He finally gets enough courage to resign from his position. His family and friends tell him he’s crazy for quitting his secure business writing job. But he tells them how much more money he’ll make by becoming a freelance business writer.
Note: The salary amount above is typical for a business writing position in Australia. The figure will vary by country but the general concepts still apply.
Mr Business Writer Learns the Sad Truth
A few months later, Mr Business Writer has had some successes getting freelance business writing work. He feels busy but he’s not making the income that he expected. What’s the problem?
The answer is billable hours.
When Mr Business Writer first thought about becoming a freelance writer he mistakenly believed that he would be able to bill for all of the 40 hours he worked each week.
Offering Freelance Business Writing is a Business
The truth is that freelance writing is a business. Besides spending time writing for his clients, Mr Business Writer needs time for sales, marketing and administration activities. Experienced freelance writers realise this fact.
Michael Meanwell, author of The Wealthy Writer, has been a freelance business writer since the early 1990s. In his book he writes that only about half the time freelance writers spend in their businesses is billable. The rest of the time is spent on administration, sales and marketing, and other activities needed to run a business.
In the case of Mr Business Writer, he’s probably only able to bill for 20 hours of work each week if he’s working a total of 40 hours per week. In reality he’s making $1400 per week (20 hours x $70 per hour). This isn’t taking his business expenses into account.
Even if he works from a home office, he will still need to advertise, drive to meetings, make phone calls, create a website, have stationery printed, etc. If he keeps his costs low – let’s say $200 per week – he will be spending $10,400 each year.
Let’s look at the overall profit Mr Business Writer will make in a year.
Profit = (48 weeks x 20 billable hours per week x $70 per hour) – $10,400 = $56,800
So he’s now making $23,200 less per year – but he’s working the same number of hours as when he was employed as a business writer.
To make what he earned in his previous business writing job, Mr Business Writer will have to charge $94.17 per hour.
Profit = (48 weeks x 20 billable hours per week x $94.17 per hour) – $10,400 = $80,000
Although this may sound exorbitant for freelance business writing, it’s a fair price based on what companies pay their employees for this type of work.
If Mr Business Writer decides to work 50 hours per week, he might have 25 billable hours. In order to make as much as he earned as an in-house business writer, he would have to charge $75.33 per hour. This is slightly more than the $70 per hour he originally planned to charge for business writing, but he would be working more.
Mr Business Writer received other benefits in addition to his salary package when he was an employee. One benefit was attending training events to help him develop his skills. As a freelance writer, such benefits are a cost that need to be considered when setting rates for business writing.
Business writing is a profession. Many years of study and hands-on experience are required to become a proficient business writer. If Mr Business Writer charges around $95 per hour for his services, he’s charging much less than other professionals, such as solicitors and accountants, charge for their services.
Another point to consider is the premium (profit) that freelance business writers should earn for taking the risk of being in business. By leaving his secure job, Mr Business Writer has taken on significant risks. What if he can’t find enough work for extended periods of time? What if a few clients don’t pay him? To justify the risks taken to move into a freelance business writing, Mr Business Writer should earn more than he earned as an employee. This premium needs to be added to his business writing fees.
The Cheapest Freelance Business Writing is Not the Solution
Some businesses will search for the lowest price to get their business writing job done. They usually get what they pay for.
One strategy is to get the work done overseas in countries such as India and the Philippines. Although there are many intelligent and educated business writers in these countries, cultural differences make it difficult to get satisfactory business writing from them.
To be a freelance business writer, you really need to live in the country and understand the cultural and linguistic nuances. I have lived in Australia and the United States and feel comfortable writing for these markets, but I don’t feel that way about writing for UK readers in the UK.
You probably experienced this cultural gap when you have received calls from overseas call centres. The people are friendly and most of them can speak English well, but there is a communication gap. This same communication mismatch arises when outsourcing business writing to overseas business writers.
Although these overseas writers charge much less per hour for business writing, I have heard that it often takes many more hours for them to complete the same amount of work. Plus there’s the cost of communicating with overseas business writers. So in the long run, outsourcing to overseas business writers won’t save any time or money.
Price shouldn’t be the only factor you look at when choosing a business writer. Would you choose a dentist, doctor, accountant or solicitor based on the cheapest price? You probably would select these professionals based on other factors including the quality of work and track record. Yet some people choose a freelance business writer by only considering the price.
Contract Business Writers
Hiring contract business writers to work in-house is another option. But by the time the business pays the hourly rate plus benefits and employment agencies fees, it will probably be less expensive to hire a freelance business writer.
With a contract business writer, the company needs to find desk space, a computer and other resources. These are a hidden costs that might not be considered.
A contract business writer working in-house probably won’t be as productive as a freelance business writer working offsite. Most business are lucky to get four or five productive hours per day out of their employees. A large portion of most working days is taken up by employee interaction that isn’t productive (such as unnecessary meetings and tea breaks). A contract business writer can quickly fall into a routine of low productivity, so they will end up costing more when compared to a freelance business writer.
Another hindrance for the contract business writer working in house is the open plan office. Whether writing a novel or business plan, good writing requires solitude. Most modern offices don’t provide the distraction-free environment required for quality business writing.
Lessons for Business Writers and Companies Hiring Business Writers
The aim of this post is to enlighten both business writers and organisations purchasing business writing services.
Freelance business writers need to realise they are in business. It’s common that billable hours are only half the total time spent in the business.
Organisations hiring business writers need to realise that business writing is a profession. Choosing a business writer strictly on the basis of price is a mistake.
Although most business writers don’t charge as much as solicitors or accountants, they are professionals who have spent considerable time and money developing their skills. This must be taken into account when paying for business writing services.
About the author: Michael Gladkoff is a business writer, speech writer and editor. His company, Word Nerds, provides copywriting, business writing, speech writing, editing and proofreading services to a wide range of businesses.
This article may be reproduced on other websites as long the author is credited and the source website, www.wordnerds.com.au, is included.