I have found that it’s easier to charge much more if you find your clients “in real life” vs a website like guru. BUT it tends to be much more time-intensive to find those clients.

Thanks for making this crystal clear…

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There is no one rate and there never will be on the internet. Too much else comes into play, like location, cost of living, local economy, health care costs, etc, etc. It really has nothing to do with the writer’s value – I already know my value. My rates are no reflection of my value. They’re just… rates.

@ Lorna – well, if I didn’t work online I wouldn’t need the uber-high speed bells and whistles version of my internet connection, so I could save a small fortune dropping that down. I wouldn’t need two computers, a laptop and two external drives. I wouldn’t need PayPal. I wouldn’t leave my computer running 24/7. I wouldn’t have to heat as much during the day. I would have a regular phone plan and not an international one, and I wouldn’t have a cell phone.

That stuff adds up, y’know?

The heating costs, internet connection and such is sort of a wash for me, as I would be paying for those things anyway since I’m at home with my computer on 18 hours a day whether I’m working or not.

I also didn’t think of the time spent bidding, bookkeeping, etc. as overhead. I was really just looking at it as hours worked. When I figure out how much I’m making per hour (which I need to do again in the near future), I don’t just count the time actually spent writing. Of course that lowers the dollars-per-hour ratio, but I just see it as part of my “job.”

In short, you’ve made some excellent points. Some of them I will try to consider in future income reports, other don’t seem like quite as big of a deal to me. And my knickers aren’t even remotely twisted.

I break down my rates hourly only as a means to come up with what I need or to compare my salary with others. In terms of actual projects, I try to come up with rates that are somewhere between the value for the customer (for example, a home page — that’s worth A LOT) and how much time/energy I need to give it.

@James, You make a good point. The only thing is, wouldn’t you be paying for that same internet connection regardless? And it would be hard to figure how much electricity one project uses. But you are right. Few freelancers truly figure out the actual cost of doing business. Great analysis!

I’d like to see a real play-by-play breakdown of the net/gross using a particular project as an example. You’ve kind of started that James.

Anyway, when I think about what other specialized service providers charge (usually $50 an hour minimum), it becomes pretty clear that writers are undervalued and I think we’re doing it to ourselves. For example, the guy who fixes my computer gets $100 an hour. The clerk at the video store probably gets $7. I figure I should be somewhere in the middle.

Let’s say you win a job on Elance for $30. Elance scrapes off 8.75%. You’re down to $27.35 right off the bat. You’ve spent half an hour futzing with negotiations for the client… what’s your time worth again?

But for argument’s sake, let’s only knock off 5$. We’re down to $22.35.

Now you can knock off expenses. Electricity (that computer has to run). Heating (unless you live in Florida during the winter). Accountants (unless you do your own bookkeeping – what’s your time worth again?)

Alright, another $5, let’s say. $17.35.

You’ll pay income tax on that amount (if you have no other deductions). In Canada, figure 30% (I have no idea what it is in the states.)

You’re down to $12.14. You started at $30 – more than half of what you actually put in your pockets at the end of the day.

Oh, right. And you have that Internet connection and computer you had to buy… hm.

Writers have no overhead? I think not, and this is a common, common perception that actually hurts people because most don’t have the bookkeeping know-how to sit down and do the proper math.

We bring in six figures each year. What we put in our pockets when it’s all said and done is a small fraction of that beautiful-sounding amount. Plus, we work bastard hard to make that money, and we’re doing the math every day.

It’s a tough world. Anyone who has it easy isn’t doing the math properly.

Disclaimer: This was a general rant and not directed at anyone. Please don’t go get your knickers in a twist.

Having said that, I will admit that I’m not 100% sure what we are earning per word/hour. Our stated rates begin at .10 a word or $30 an hour.

Realistically, though, it seems like almost every project gets individually priced. It might take a while, but I think I’ll go back and see what we’re *really* making on a per word/hour basis.

Any expenses we incur come out of the business account. For example, this month we had to re-up or Guru membership, and that was a $200 payment out of the business account.

Each of us is responsible for our own taxes, however, so I like to take out another 20% or so and put it in a special account so I can mail them in quarterly.

Our overhead is ridiculously low, and if we want something we can’t realistically afford from what we’ve stashed into the business account, we wait a few months and save up for it.

Does that answer your questions, or was there something more specific you’d like to ask about?

I’ve been meaning to add a Guru profile and your post just moved that task up a few notches on my to do list. I primarily use Craig’s List and get pretty good results, believe it or not.

Like James, I think it would be interesting if you added some notes about expenses. My overhead is pretty low except when I have to spring for something big (like a new laptop).

Also, it would be really interesting to find out your rates for specific projects. I’m not sure if you’d be willing to share that information but lately I’ve been wondering — why are freelancers so secretive with their rates? Most product and service providers pretty much put that information out front for all the world to see. So why don’t we?

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While it’s probably something you don’t want to hang out there, I’d be curious about gross revenue versus net revenue. There are certainly expenses involved.

Genesis – It was really interesting to see these numbers for ourselves. It made me feel good about what we’ve accomplished and gives us food for thought for next month.

Allena – I’m not sure if you think 18 is too high or too low? (If it’s too high, bear in mind that there are two of us and some of those projects constitute a single press release.) I think you should do it, too! I bet your readers are curious.