As a freelancer, how are your rates and your sanity related? Here’s how:
I’m a fan of work/life balance, or however you want to phrase it (I know, there really is no balance, there are only choices that we have to be clear about!). I love my job and I find it fulfilling, but I also don’t want to look up from the screen in 10 years and expect everyone and everything I care about to have paused. I know that I need (and want) to enjoy the people in my life now, and that I don’t want to put off all of my non-work goals for the future. When people ask, “How do you find the time, and how can you afford to take an actual vacation/pursue your non-work interests/not work 60 hours a week?” here’s my answer:
I set my rates so that I can reach my target income by billing (not working, billing) about 25 hours a week, and then I actively seek out clients who will pay those rates. That’s what allows me to reach my financial goals without working a million hours.
How many hours a week you can bill depends on who you work for. If you work for direct clients or individuals, I think you’ll probably spend at least 40% of your time, and perhaps closer to 50%, on non-billable tasks: things like marketing, professional development, networking, issuing quotes, e-mailing with clients, doing research, accounting, etc. If you work for agencies, you may be able to bump your billable hours up to 75% of your time or more, because your administrative overhead will be much lower.
Setting your rates so that you can reach your financial goals while leaving yourself a “buffer” of non-billable time is what will save your sanity as a freelancer. If you have to bill 40 or more hours a week in order to reach your financial goals, it’s not surprising if you’re currently losing your mind. That leaves you no time for non-billable work, and more importantly no time to market to better-paying clients.
The key here is twofold:
-Know what hourly rate (or the per-word equivalent) you need to charge in order to reach your target income. To calculate this really quickly, start with your target gross income (let’s say $100,000), divide by the number of weeks you want to work (let’s say 48), and then divide by the number of hours you want to bill (let’s say 25), which would give you an hourly rate of $83.
-Actively market to clients who will pay that rate. And remember, you don’t need 500 clients. You only need enough clients to create a sustainable income base. For most freelancers, I’m guessing that’s 3-7 regular clients plus some at other tiers. Surely there are three to seven clients in the world who have interesting work and will pay what you want to earn!
Thank you.
Sara Del Sol
Sure!
Totally agree with your approach, and it’s what I’ve been doing ever since I went freelance (after being a staff translator for many years): decide your target income, decide how many hours you want to work/bill for, calculate how many words you can translate per hour (while maintaining quality and not stressing!), and set your rates accordingly.
This effectively means not working for agencies. Given that they can’t ask the client for more than about 15 cents a word, they are forced to pay you less than that. I do about one agency job every five years, when some agency is so desperate not to lose a major client that they’ll incur a loss on one job by paying me more than they charge their client. That doesn’t happen often!
The “secret” is to specialize, in terms both of subject and of languages offered. For instance, I translate from Dutch (among other languages), and while demand for nl>en may not be as high as fr>en (for instance) there are fewer native-speaking English translators working from Dutch than from French, so there’s less competition for that combination. I suspect that if you can offer a much rarer language such as Japanese, you can be even more demanding regarding your rates. I also specialize in railway technology and humanitarian work — not really unusual topics, but again, there’s less competition there than in some other fields.
Also agree about not needing masses of clients — much less stressful to have a small number of clients who:
– pay a decent rate
– pay on time
– are pleasant and easy to work with
– send you interesting texts to translate.
They may not grow on trees, but they do exist!
Thanks, Steve, and glad you liked the post! I love your comment and all of your observations about specialization and languages. The only thing I’m going to slightly disagree with is an absolute ban on working for agencies. I actually have agency clients that pay me 15 cents a word, so they’re definitely charging the end client more than that. I’m not saying those are easy to find, but I actually have two or three agencies that will pay that for French to English and where I do earn my target hourly rate.
Glad you’ve been able to find agencies that pay 15 cents (although I generally charge 21 euro cents a word, so 15 would still be under my usual rate — the dollar and euro are close enough to parity to make no difference for the amounts we’re interested in).
I definitely don’t have an absolute ban on agencies — it’s just that it wouldn’t be economic for them to use me.