Re: newbie alert! rates for contract work

[powen -at- MAIL -dot- LMI -dot- ORG]

Alexander had some good advice to David on setting rates, which is the hardest
part of being a consultant, as far as I'm concerned.

I just want to add, as a long-time consultant, that I balance my rate structure
between what I think I should be making a year and the average rates in the
market in which I'm working. Figuring in the benefits that a company would pay
for you to work for them full-time also helps. These include vacation,
retirement, health care and sick leave, Social Security taxes (which has
changed), and, in some cases, stock options, parking, commuting cost, and scores
of other perks. I've often heard it said that 30% of an employee's income comes
in the form of these benefits. I've figured out that, these days, it's probably
closer to 25% for me.

So, if I want to make the equivalent of a $30,000 annual salary, I figure I need
to gross about $40,000. If I want to make that working a 40-hour week (with two
weeks vacation, which is, in my mind, an ridiculously short vacation, but
typical in this country), that comes out to $20/hour. Of course, in the real
freelance world, dry spells are common, and I have to factor in the possibility
that, over the course of a year, I may not work for a month (or in some cases,
if I'm feeling too lazy to go looking for new assignments, even longer). Then, I
consider expenses that I don't charge to the client, especially when I work at
home or when I'm not charging for the commute (I don't usually charge for the
commute unless it's more than 20 miles) - for example, phone, computing software
and hardware, fax machine, electricity. All this can quickly add up to needing
to make $25/hour, which really is the bare minimum any writer should charge,
IMOHO. (Somebody please check my math. I don't remember what my SATs for math
were - to link this to the heated debate about bogus resume requirements - but
math is definitely not my forte.)

Given this basic idea about rate structure, I consider my market. If you have
experience and a good market, you can probably look for a few clients who pay
more (either because they want high-quality work, or because they are clueless
about the going rates), knowing that they may all run out of work
simultaneously, or play the field and adjust your rates to whatever assignments
come your way. I often drive myself crazy by thinking about the writers I know
who specialize in a subject (say, in medicine) that make more than $70/hour. :-{

In the area where I live (Washington, DC), a $30,000 annual salary will pay for
about half the rent of a two-bedroom apartment (forget about buying) and dinner
out once a week, if you're careful with your money, so I don't figure *my* rates
on the basis of that amount. Also, I like to take *long* vacations (often longer
than a month) and make up the lost pay by working as much overtime as possible,
for which I charge time and a half.

Pam Owen
Nighthawk Communications
Reston, VA
Nighthawk1 -at- aol -dot- com, or powen -at- lmi -dot- org