You can put in an incredible number of hours to establish yourself as a writer, so I hate to be the one to point out that there ought to be a payoff… in dollars… eventually. Sadly, because you’re human, you’ll probably get into the zone, because human beings crave repetition, and you’ll forget about the money part until the rent’s overdue and the cat needs his booster shots. If your comfort zone starts getting a little uncomfortable—say, too much like a rut—and an irritating little voice starts whispering to you that the benefits just aren’t there, then maybe it’s time to sort out how much you need to earn for your work. Yeah, I know. This part isn’t fun.
Tax season is the perfect time to assess whether your writing will remain a hobby or sustain you as a career. While the calculator is still switched on, punch in some numbers that will give you, if nothing else, some realistic goals for your writing in 2010. Goals are good.
Start by determining the annual income you’ll require to satisfy your financial obligations. I’m assuming you already have a budget and know roughly the net income you need in order to stay financially afloat.
Next, pick a hypothetical figure as your gross income target and work backward by subtracting income taxes, business expenses (including computer hardware and software, Internet service, professional development, subscriptions, membership dues, travel, office supplies, postage, etc.), health care coverage if you need it, and retirement savings. This should give you a figure that represents your target net income. Adjust the hypothetical gross income figure until you get the net income figure you need. I made these numbers up, they are not reliable, but results might look something like this:
$40,000 gross income
-7,000 income taxes
-3,000 business expenses
-3,000 health care coverage
-2,000 retirement savings
$25,000 net income
Your target might seem easily achievable if you’re able to take home a regular paycheck for a corporate writing gig, because every hour spent in your cubicle equals money in your pocket. But if you want to work for yourself, as a freelance writer or a novelist, the income you’ll be able to generate in exchange for your work isn’t so easy to predict.
Assume you’ll be able to spend a maximum of 240 eight-hour days hard at work as a freelancer. Half of that time, or at least a third of it, will be spent marketing yourself and your writing, seeking free publicity, designing and producing marketing materials, and doing the bookkeeping. That leaves between 120 and 160 eight-hour days (a total of 960 to 1,280 hours) of actual writing time—or billable hours, if you’re sending bills to clients who pay for your freelance writing or editing services. You can’t ignore the facts. If you don’t do the marketing, then you’ll need to pay someone to do it for you, and without publicity, you won’t be able to exploit the market for your work.
net gross income figure you were aiming for and divide it by the number of hours of actual writing time that exist in a calendar year (somewhere between 960 and 1,280 hours). This will give you the hourly rate you’ll want to be paid for your writing.
Of course, you can’t stop there, because most freelance writing gigs don’t pay by the hour. They pay by the project, based on an estimate you provide to a client, or based on the licensing of publication rights to creative work. Or they pay by the word.
After a little experience, you should be able to calculate how much you receive per hour for various types of writing assignments, even if you’re actually paid by the word or by the project. Just keep track of how many hours you spend on a project and divide that number into the dollar amount you receive for it. (Eight hours spent writing an article for which you’re paid $200 equates to $25/hr.) When research is involved, you’ll obviously need to include the time devoted to research as part of the total time spent on the writing assignment. However, you won’t need to factor in the amount of time spent getting the assignment, because you set aside time for marketing your work when you calculated how many hours of actual writing time you’d have in one year.
If your calculations indicate you’re aiming for a certain average hourly rate of pay for writing and you’re actually pulling down something far less per hour, then you need to change your game. You can do that by taking more writing assignments that pay higher rates, or you can subsidize your creative writing with a job in a different sector, as many writers do.
Don’t wait until someone offers you a writing project to figure out what you should be charging, because you won’t have time to take all of these factors into consideration. It’s difficult enough to estimate the amount of time an article or a book should take to write. Facing economic reality will help you determine what to charge clients for your writing services and what to aim for when licensing the rights to your creative work. The math can also show how prolific you’ll need to be to make any headway financially.
Peering into a few novelists’ bank accounts
Following are a few candid accounts of what some novelists have been paid for their work or what they know an author can expect to receive. Keep in mind that genre fiction typically sells in quantities far greater than literary fiction.
Royalty statement anatomy, which refers to…
The reality of a Times bestseller
David B. Coe:
Business realities for the beginning writer
advances – what they are really made of
How the proceeds are shared
More on how receipts are divided among publisher, author, and agent:
Book revenue breakdown
Times book review on advances and related thoughts
I’ll try to expand this list as I come across more of these kinds of posts. Feel free to post links to similar items in the comments section.
What Exactly Is $70,000 in Freelance Income?
Illustrations courtesy of Muhammad Syahmi bin Ismail