One of the most difficult aspects of running a freelance business is setting your minimum rate.
I continue to be amazed at the questions I get from people seeking to start up their own freelance businesses, because I certainly figured all this stuff out and I am neither a genius nor a business guru.
One of the most common questions I get from neophytes about freelance translation work concerns my rates: How do you determine what your rate should be? Now, I had no magic formula when I was just starting out, but I can where a little experience on the subject would be desirable, so let’s go over some of the considerations concerning freelance rates for the benefit of the newbies.
A Few Rules of Thumb
Before we get into the nitty gritty, I want to point out a few basics that many people – even experienced people – neglect to take into account:
Rates Change! Just because you settle on a minimum rate this year doesn’t mean that’s your rate forever. Part of the power of being a freelancer is your ability to change your rates – up or down – in order to serve your interests.
You Minimum is Yours. People will tell you what your minimum rate should be, but it depends entirely on your income needs and your circumstances. If you have other sources of income, you might do well at a lower rate just to get your business started.
Setting the Rate
You can do some simple calculations to figure out your bare-minimum rate: What do you need to be paid per a certain number of hours each week in order to cover your expenses? It’s not complex math, after all. If you need $1000 a week and you can get 20 hours of work every week, you need to earn $50 an hour. How many words can you translate in an hour? Divide $50 by that number and there is your minimum rate.
That doesn’t mean you’ll find someone to pay you that rate, of course, and it doesn’t mean that just covering your expenses is any way to live.
For me, I started my freelancing with someone money set aside so I wouldn’t need to have a full client slate out of the box to survive. So I took jobs at ridiculously low rates in order to get started. Every time I took a job, I raised my rate a little. When I stopped getting job offers, I dropped back down to the last rate that had worked and stayed there. That worked pretty well for me to find my minimum rate, because it wasn’t based on bare survival but rather on what the market would bare.
I’ve raised my rates since then – and occasionally lowered them for specific projects, whether due to the volume or as a friendly gesture. Rates are rarely carved in stone. Rates are things that get adjusted over time, up or down, depending on your needs.
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