I’ve written frequently about the need for freelance writers to set a goal of having a high hourly rate. I’ve written about howÂ to raise your rates. I’ve talked about how you can earn more bidding per-project than per-hour.
Today, I’m going to take the rate discussion to another plane and talk about daily rates. That’s the rate you want to earn per work day in order to bring in the amount you want to make in a year.
Why is it important for you to know your daily rate? Several reasons:
1) Quick tracking mechanism. If you know your daily rate, at the end of each day you can evaluate how you did. First, look at what you billed. If you didn’t actually bill any clients that day, review how much work you put in on ongoing projects. For instance, if you estimate you’ll work parts of 10 days on a $1,000 project, attribute $100 of earning on that project for today.
Now add up the total estimated earnings for the day. Does it add up to the daily rate you want? If not, the time to take action to find better-paying clients is now — not at the end of the year, when you do your taxes and are confronted in black-and-white with the reality that you aren’t meeting your earning goals.
2) Good weekly yardstick. Once you have a daily rate, it’s easier to track how you’re doing each week and each month. I find these calculations help me schedule deadlines throughout the month so I have revenue in each week, instead of having a lump of work all stacked up at the end of the month, which leads to late nights and stress as I frantically try to keep projects from hanging over into the following month (thereby screwing up my revenue projections for that month!).
3) Another way to view earnings besides hourly rates. While I’ve often said freelance writers need to aim to make $100 an hour, not all your work may be at your goal rate. Or you won’t be fully booked every day. Â A daily rate can give you a better sense of whether you’re charging enough based on other factors including how busy you are, how many hours per day you’re willing to work, and how long it takes you to complete projects.
4) Quick quote ability for exclusive projects. Every now and then, a client may want to lock down all your time for a project. They want you to go cover a trade show for several days. Or they want you to drop everything and work on a rush project for them for a week or two solid. Maybe they need someone to write in-house for a month at their office. Or they’d like you to spend two months ghostwriting their e-book.
How do you know what to charge?
If you know your daily rate, you know how much revenue you would lose by being locked down on an exclusive project, unable to work your usual clients. Without a daily rate, you’re just guessing whether it’s worth it to you financially to take the assignment, so it’s easy to end up shortchanged.
How to figure your daily rate
Now that you know why you should care about your daily rate, let’s figure it up. Say your goal is to earn $100,000 from freelance writing this year. (Think big!)
There are 365 days in the year, but 104 of those days are weekends. There are also roughly 10 holidays a year where it’s virtually impossible to get much work done — Christmas, New Year’s Day, Memorial Day, etc. Family members will likely expect you to shut off the devices and pay attention to them on these occasions.
Let’s hope you’re not working weekends or major holidays, and that you also plan to take at least two weeks off a year (which you certainly should). That leaves around 240 real, viable work days in the year.
Divide $100,000 by 240 and you get roughly $417 a day. That’s your daily rate. Want to earn $50,000 a year? That’s around $209 per working day.
Have you calculated your daily rate? Ever needed to use it for client quotes? Â Leave a comment and let us know whether you think it’s useful to know your daily rate, or whether hourly rates are more important.
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Photo via Flickr user bigburpsx3