Earn Your First $1,000 as a Freelance Writer: How to Determine Your Rates as a Freelance Writer

Ever since starting the Earn Your First $1,000 as a Freelance Writer challenge, a question I get asked a lot is that of how to charge clients. How do you ensure you are charging the right amount? How do you ensure you’re not cheating yourself? How do you ensure that the amount you demand won’t scare your clients away?

It’s easy to point you to some “standard” rate list, but I won’t do that. Instead, I’ll give you practical advice on how to charge your clients.
Also, I’ll be honest with you: despite my years of experience as a freelance writer, I still have fears when I give new clients my rate. What if they find my rate too high? What if they don’t reply? Indeed, many do not reply. However, as I later conclude in this article, the solution isn’t to go as low as potential clients are willing to go; the solution is to find clients who are willing to pay your rates no matter how “high” it is.
Instead of writing a fresh article, I decided to update one I had already written on the subject of charging clients. Enjoy!

The Pricing Mistake that Keeps Most Freelance Writers Broke

As a freelance writer, exactly how do you decide how much to charge your first client? How do you decide how much to charge other clients after that?

Some freelance writers simply come up with a rate, often the most basic rate they can come up with, charge their first client this rate, see success doing this, and then make it their permanent rate.
Some freelance writers look at what other “successful” freelance writers are charging, compare themselves with these “successful” freelance writers and then charge their clients more, less or the same amount; if it works, they keep up that rate. If it doesn’t, they keep revising until they find something that works.
Some freelance writers take a somewhat different approach; they decide on a price based on their skills, how many hours they are willing to work, their needs and how confident they are that clients will pay their rates.
Perhaps the most common approach is that of freelance writers who decide on the “right” hourly rate, and then use this hourly rate to determine how much to charge their clients; whether they will be quoting their clients per article, per project or per word, it is often influenced by this hourly rate.

While the last approach is the closest to the best, it is often flawed and is essentially what is keeping majority of freelance writers broke.

The Flaw With Your “Hourly Rates”

It’s easy to overlook the point raised in this article if you don’t give your clients exact hourly rates. However, if how you charge your clients is remotely connected to what you feel is a fair “hourly rate” for you, you should pay attention.
The flaw with this approach, with how you decide on your “hourly rates”, is that many variables are often ignored.
Most freelance writers simply decide on their hourly rate by calculating how many hours they need to work in a month to meet certain income goals, and that’s it.
This is where the problem comes in. Yes, you’ll pay the bills but that’s just it. For the most part, you’ll remain broke.
To decide on how much you are really worth, and how much you should really charge, per hour, you need to first view yourself as an employee.
If you were to be working for an organization, you have to assume that, depending on your part of the world, the following will be taken care of:

Your office space/rent
The computer you will be using
Your internet access
Some of your taxes
Health or some other insurance
Leave bonuses/payments; maternity leave or some other kind of leave you can choose to take
Courses and programs that can help you improve
Other benefits

You get to enjoy NONE of the above benefits as a freelance writer.

Nobody will pay your office rent; most freelance writers just “wing” this since their office is inside their home… but still.
You’ll be paying for your computer/computers; this includes maintenance, upgrades, software etc.
You’ll be paying for your internet access.
You’ll be paying ALL your taxes, and this is often the scariest part for a lot of freelance writers.
You’ll be handling your health insurance; God forbid you should suddenly break down, you’re on your own. Not only will your freelance work be affected, but you’ve got no money to use to take care of yourself since you’ve spent the little you made paying the bills.
Leaves? Do freelance writers even take leaves?
Courses, programs, events, etc. Most organizations will organize and pay for courses and programs that will help you improve so that you can better contribute to their business; I believe it’s safe to assume that you have probably never even considered expenses spent on courses and programs aimed at improving your freelance writing career as work-related expenses. More like a “personal” expense? Towards making you a “better freelance writer”?

This is where the problem starts for most freelance writers; they come up with an hourly rate without considering all the above benefits and more, that they would have automatically enjoyed in a job without their salary being cut in half, and then they wonder where all the money they earned went at the end of the day.
If you feel that you’re earning $50 per hour as a freelance writer, then you are most likely earning much less; when you calculate taxes, office needs, computer and internet access, healthcare and insurance, etc, you’ll find that what you’re really earning is in the neighborhood of $20 – $25 per hour.
In essence, the best way to determine your hourly rate is to consider all the above factors; factor in what rate is best based on the effort you will invest in writing for your clients, a fair hourly wage for you if you were working under someone, and all the benefits you get if you were working for somebody. The rate you decide on after considering all these factors is what you should quote your clients. Once you know your hourly rate, you can easily calculate how many hours it will take you to complete an article, and then determine your per word rate based on this.
Personally, I’ll add extra on top of my real hourly rate — I don’t just want to break even; I want to make a profit! So if my hourly rate is $40, I might charge clients $60. You get the idea?

Getting Clients to Pay Your Rates

Once you’ve decided on a fair rate for yourself, the next step is to get clients.
Your aim should be to get clients that can pay your rates; you shouldn’t worry that your rate is too high. If you were charging $50 per hour before and had to reach out to 40 clients to close a deal, and then you find out that what you really should be charging is $80 per hour, you should expect to reach out to at least 60 more clients to close a deal.
Your mindset needs to change: instead of thinking “will they pay?”, you should start thinking, “This is my minimum hourly rate, and I have to find clients that will pay it!”
This is not necessarily “more work,” because the effort to get a client is fixed while the income is compounding; if you realize that your real hourly rate should be $80 per hour, instead of $50, and a client requires 20 hours of work, that’s $30 extra on each hour or $600 extra on the 20 hours of work you did. If the client eventually had you do 200 hours of work in the span of one year, that’s $6,000 extra at the end of the year.
Calculate this not just for one client but for two, three and more clients and you instantly see the real power of this; everything adds up, and not only can you comfortably take care of the essentials but you are no longer a broke freelance writer.
Instead of worrying about whether clients will pay your rates, you just have to decide on your new, correct rate and look for those clients who will pay those rates, wherever they are.
Even if you are charging $1,000 or more PER article, there are clients who will pay you. I know because I’ve worked with several of them. The key is to find these clients.
This isn’t as difficult as most people see it; it’s just a small mindset change.

What to Do When Clients Want to Negotiate

It inevitably happens that a new client wants to negotiate. Should you automatically send the client away? Not really, here are some tips that will help you:
1. Determine Your “Minimum Rate”: Before you even start to charge clients at all, it is very important to decide on your “minimum rate.” This is the rate you will never go below no matter what; it is your “break-even rate.” Knowing this rate ensures you’re well-positioned to negotiate with clients without jeopardizing your interest.
For most people, this minimum rate is what would have been their hourly rate at a job. For others, it is a more comfortable rate; for example, I’ve personally decided to charge new clients $.25 or more per word. If push comes to shove, however — say I am in serious need of work/cash, or if I see a lot of potential with a client, and the client is willing to offer guaranteed long-term work — I can take $.20 per word. So my minimum rate is $.20 per word. I never go below this rate no matter what.
2. Always Charge New Clients More than Your Minimum Rate: Once you decide on a minimum rate, it is important not to automatically charge clients this rate. You should always assume that new clients will negotiate, and giving them a rate you never want to go below immediately they demand your rates won’t always end in your favor.
In my case, my minimum rate is $.20 per word, but I often tell new clients that I charge $.25, $.30 or more per word. Very few negotiate, but those that negotiate will eventually settle down to my minimum rate and still feel that they are getting a bargain.
3. When Clients Negotiate, No Matter What, Make Sure Never to Go Below Your Minimum Rate: No matter how persuasive a client is, don’t ever go below your minimum rate. Once a client starts to negotiate and the client insists on going below your minimum rate, it is better to call the project off.
4. Use a Client’s Desire to Negotiate to Secure a Long-Term Deal: When I got my first client ever, I started by charging him $100 per article. At this rate, I might get 4 to 10 articles a month and maybe earn $400 to $1,000. The client really liked my work, and he saw me doing a lot of work for their network of sites on a long-term basis, so he decided to negotiate my rate to $85 per article with promise of more work. “I promise there’ll be more work” is a vague term usually used by most clients to get freelance writers to lower their rates, but I decided to get a real deal out of this; I told the client that I will happily agree to his proposed rate of $85 per article if he is willing to sign a contract guaranteeing to give me a project of at least $3,000 every month. The client signed the contract, and the rest is history.
A good lesson from this story is that I could have easily, out of fear, lowered my rate to the $85 per article that the client requested. I also could have scorned every attempt to negotiate with me and insist on the initial $100 per article — and lost out on more work. Instead, I turned things around and got a contract guaranteeing income stability for me. For a new freelance writer who was barely making four figures at the time, a guaranteed $3,000+ monthly was such a big deal for me.
For most clients, negotiating is an ego thing. So, instead of hurting their ego (indirectly telling them they aren’t a good negotiator!), try to get them to give you a very beneficial contract. They get a rate reduction
Story 2: I was recently checking my records when I found that I earned over $16,000 with one of my clients in February of this year. Irrespective of where you are from, with just one client for just one month, that is A LOT of Money. In fact (since I hate numbers and I’m bad at keeping records), I had no idea that I earned that much with this client until a few days ago (in August!). This client still gives me A LOT of work, and he’s willing to pay me much more than that if I’m willing to do the work.
How did this happen? Here’s how: When the client first engaged my services he really liked my work. So he asked me if it will be possible for me not to work with any of his direct competitors; I can work with other clients, but if they could directly compete with him, I wouldn’t work with them. According to him, I was too good for them to have access to. I was naturally flattered (the client had a really good impression of me). In a situation like this, most freelancers will start thinking, “No way. How can I sign an exclusive with one client?!” or “No, I’ll never put my eggs in one basket.” My thought process was, “This client doesn’t say I have to work with him alone. I simply have to not work with his competitors. Fair enough.” After that, I thought something like, “If I’ll sacrifice working with this client’s competitors, what will make it worth it for me?” After thinking about it, I decided to ask the client to guarantee that he will offer me up to $10,000+ or more in monthly work as long as I’m willing to do the work. He agreed instantly.
For perspective, I was initially earning only a few thousand dollars with this client. However, I suddenly gave myself an opportunity to earn up to $10,000 or more per month by negotiating right.
These two stories point to one main fact: Every situation can be turned around. If a client wants to negotiate with you (and I’m not talking about hagglers here who want to lowball you!) it means that the client values your skills and services a lot. Take advantage of this fact by using the client’s desire to negotiate to secure more work; get a written promise/guarantee before agreeing to lower your rates. If possible, get a contract. All should be fine as long as you don’t go beyond your minimum rate.
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