An American Editor

April 16, 2014

Are Boom Times Coming?

As all self-employed in the United States know, April 15 is not only the date our personal income tax returns for the prior fiscal year are due, but also the time when we need to pay our first quarter estimated taxes for the current fiscal year. For me, it is also a time to spend a few hours looking at data I have accumulated during the first quarter and making an attempt to predict future trends.

In recent articles, I have noted the importance of data collection (see, e.g., The Business of Editing: Recordkeeping I and The Business of Editing: Recordkeeping II). I have also noted the upswing I have experienced in offers of editing work (see, e.g., The Business of Editing: An Embarrassment of Riches). In those articles, I hinted (at best) at the extent of the data I keep and analyze.

Important data that I keep are the number of projects I have been offered, the number that I accepted and the number I declined, and as much detail as I can about the projects I declined, but with particular focus on size, offered fee, subject matter, and schedule. I usually review and analyze this data quarterly, about the same time that I prepare my income information for transmittal to my accountant for the quarterly returns. (I know that many, if not most, of my colleagues do their own quarterly payments; after all, it is a simple form. But I have made it a practice over my years as a freelancer to always use an accountant even though the accountant’s services are not free. For my business it is worth the fee. The accountant also looks at the data I have collected and sometimes offers a very valuable insight into my business that I have overlooked.)

This year has been significantly different than previous years. When publishers started offshoring, I could see a trending decline in the number of projects I was being offered. Interestingly, at the height of the offshoring and of the consolidation of the publishing industry, a key indicator was the low number of projects that I declined. (I should note that I do track the reason why I declined a project. This is important data. It makes a big difference in my analyses if the reason was fee, schedule, project size, or subject matter, or a combination of these four. For example, if I declined a project because it was outside the scope of the areas in which I work [e.g., a historical romance novel], then that particular project plays a very minimal role in my analyses; in fact, other than being counted as a declined project, it has no role in my analyses.) At that time, few projects were declined.

I could then trace a leveling. Every year following the plateauing of the accepted-declined numbers, I could reliably estimate the amount of work I would have each quarter of the following year, from whom the work would come, and the type of work it would be. That information helped guide my marketing: how much marketing I needed to do, to whom it should be directed, and when it should be done.

Beginning in the last half of 2012 I noticed that what had been plateauing was changing. The number of projects and the size of the projects being offered were beginning to increase. Where previously the number of projects being declined had remained low and steady, the trend was starting to show an increase.

The data for 2013 reinforced this trend, with the numbers steadily, but slowly growing. Also the data showed an increase in the effective hourly rate, which indicates an improvement in efficiency as well as an improvement in the types of projects accepted.

For the first quarter of 2014, the data demonstrates a continuation of the trend. But the data shows a significant spike. For example, in the first quarter of 2014 I was offered and declined as many projects as I had declined for the whole year in 2011 and 2012. The data shows that the number of manuscript pages in the declined projects equals 46% of the number of pages that was accepted.

Perhaps more importantly, the data shows that clients increasingly tried to alter schedules in hopes that by doing so I could fit the projects in my schedule. This is an important bit of knowledge because I can look at, for example, 2007 and see that in 2007 clients were willing to alter production schedules for very few projects, but in 2014 it changed to the majority of projects.

The data indicates to me that, at least within my niche, boom times may be coming. The first quarter 2014 data is an eye-opener for me. I note that revenues are up 61%, the size of the projects under contract is up 143%, and the number of projects being offered is up 218%, but I declined 58% of gross number (or 46% in terms of manuscript pages), which is also an increase. Unfortunately, because editing is hands-on work that has limits on what can be automated, the number of projects that I can accept is governed by the same key determinants — number of manuscript pages, project difficulty, and schedule — that existed in 2000, which limited the number of projects I could accept in 2000, still control the number of projects I can accept today.

But data analysis also discloses how efficiently I can edit. The more efficient I am, the higher the number of pages per hour that can be edited. The higher that number is, the more projects I can accept; conversely, the lower that number, the fewer projects that can be accepted.

Although the percentages noted above look great, it needs to be remembered that they represent just the first quarter of 2014. Second quarter data could plummet those numbers when applied year to date. My point is that although analysis of the first quarter is important in the decision-making process for upcoming months, it cannot be the sole determinant. At most it is a guide. Had the numbers been down, however, the importance of the analysis would be much greater; the analysis would be a warning of a negative trend that requires immediate corrective steps.

As I said earlier, my first quarter results indicate a change in the publishing industry for my niche and implies that boom times are coming. But even if boom times are coming, who knows how long they will stay. It could be fleeting or it could be years. The answer lies in the data I continue to collect.

What does your data tell you about upcoming trends for your business? Are you doing better than previously? Do you limit your analyses to comparing gross revenue? If so, what does that comparison tell you about your business and what you need to do?

Richard Adin, An American Editor

April 9, 2014

The Business of Editing: Finding Editors

Last week I wrote about subcontracting and said it isn’t a difficult thing to do from an administrative perspective (see The Business of Editing: Subcontracting). I did mention the one stumbling block: finding competent editors.

Finding a competent editor to subcontract to is difficult. There are lots of reasons for this difficulty, such as the lack of universal certification with reliable standards. In some subject areas and some countries this is less of a problem than in the United States, but even in those countries and subject areas that have certifying organizations, the problem exists, if for no other reason than most editors lack the certifications that are available.

Don’t misunderstand: neither certification nor lack of certification is proof of an editor’s competence or incompetence. They may be indicators in some cases, but they do not rise to the level of proof.

The problem is that there is nothing that I know of that rises to the level of proof certitude. Editing is still an artisan’s career, which means that the same manuscript will be handled differently by equally competent and professional editors. Too much in editing is other than cast-iron rule for it to be otherwise (e.g., Is since synonymous in all instances with because? Should a serial comma be used even though the style is no serial commas?).

Another unsolvable problem regarding competency is subject matter competency. An editor may be an outstanding editor for historical romance novels yet abysmal as an editor of medical texts.

What it boils down to is that finding the right editor for a particular job is a difficult task that is not made any easier by the ease of entry into the profession.

In my early years, I assumed that an editor who was experienced in the areas in which I worked had to be competent. So if someone’s resume indicated that she had 3 years of medical editing experience, I assumed she must be competent. It took a while for me to grasp that in some cases, there was little correlation between competence and years of experience except, perhaps in the case of many years of experience, which tended to correlate very well.

Alas, even with a strong correlation between subject matter competence and years of experience, there was no assurance that the person would be a competent editor for the particular job(s). Editing is much more than knowing subject matter; editing is also much more than having edited a certain number of manuscripts.

I suppose we can say there are at least three levels of editing competency: no competency, mechanical editing competency, and inspired editing competency. The first, no competency, needs no discussion. It is represented by the person who hangs out a shingle, calls himself a professional editor, gets hired, and not only enrages the client with the poor work but gets the client to rant about editor incompetency to anyone who will listen.

Mechanical editing competency is probably where most editors fall on the editing continuum. They know grammar and the rules, know how to make sure that lists are parallel, tenses aren’t shifting every which way, and can quote the style manual rule that supports whatever editing decision they have made. They are good editors but uninspired.

Inspired editing competency is a label that, I think, can be given to a much smaller number of editors. These editors not only know the rules but know when to ignore them. (Imagine the difference between the editor who insisted on “to go boldly” versus the editor who understood “to boldly go.”) The inspired editor does not rewrite and reframe an author’s manuscript simply because he can; rather, he knows when it is necessary to rewrite for clear communication and when it is necessary to ignore the rules that have governed language for decades, if not for centuries, and leave the manuscript alone. The inspired editor understands the importance of language choices and understands when since is synonymous with because and when it should not be considered synonymous.

This is the problem of subcontracting. Which editor do you seek: the mechanically competent editor or the inspired editor? And how do you find them?

In part, the answer lies in what service you are providing and to whom you are providing it. Someone who works directly with authors on their novels and offers developmental-type services may want the inspired editor; in contrast, the editor who works with packagers whose budgets are small and tight, whose schedules are tight, and whose instructions from their clients are focused on the rules may want the mechanically competent editor.

In part the answer lies in what type of business you are trying to grow. You may already have a sufficient number of one type of editor and want the other type so as to be able to expand your business. In addition, you may be constrained by the type of clients you serve and the pay you can offer, which may dictate the type of editor you seek.

Knowing the type you seek allows you to configure your search methods to meet those needs. The one thing I have determined to be an absolute necessity (unless I know the editor and the editor’s work exceedingly well) is an editing test.

For many years I hired based solely on resume and an “interview.” What I found was that doing so was a crapshoot. Sometimes I struck gold, but most times I struck out. A test should be used to weed out, but not as the sole decision maker. I have found that since I instituted a test, 95% of applicants fade away. They do not return the test at all and so they make the decision for me. Of the 5% who take the test, fewer than 1 in 50 pass it. “Failing” my test does not mean the editor is not a good editor; it means that they will not fit my needs.

Even the editor who “passes” my test, should they be hired, needs some guidance from me, but the goal is to for them to be assigned a project and to run with it without supervision and with my having the confidence to know that I can take their editing and submit it to the client and not worry about a negative reaction.

There is no sure-bet method for finding an editor who fits when looking for subcontractors. There are steps one can take, but nothing is guaranteed — which is why when a good fit is found, it is worth working hard to maintain the relationship. Finding the editor is the hardest part of subcontracting, but it is not an impossible part. It just requires a bit more upfront work, but it can be well worthwhile.

Richard Adin, An American Editor

April 2, 2014

The Business of Editing: Subcontracting

On another list recently, there was a “discussion” regarding subcontracting. It really wasn’t much of a discussion — some participants said they have never done it and never will, some said they tried it once and decided it wasn’t for them, and a few said they do it regularly. No one really discussed the merits and demerits of subcontracting.

What surprised me most about the discussion was how little people understood about subcontracting yet how firm they were in their view of it, even if they understood little about the mechanics of it.

One of the solutions suggested last week in response to The Business of Editing: An Embarrassment of Riches was subcontracting. I have subcontracted with other editors for many years and I have had employees. Neither is particularly difficult, but as between the two, subcontracting is the easier.

An advantage to subcontracting is that it enables you to take on more work than you otherwise could handle. There are limits to how much work a solopreneur can handle, both effectively and efficiently. There are just so many hours one can edit.

The primary argument made against subcontracting is “my clients hire me to do the editing and would be very unhappy to learn that I subcontracted the work.” This is the guild/artisan argument and it does have some merit. The key to overcoming this client expectation is to promote your company rather than yourself. For example, from the very beginning of my business, I always told clients they were hiring my company, not me. My invoices were in my company name and all my communications emphasized the company connection.

Having been in other businesses before editing, I knew that marketing myself, rather than my company, would ultimately limit my opportunities for growth, especially financial growth. If there is only me, there is only so much work I can do and thus only so much money I can earn.

I also recognized that focusing on me would not play to one of my business strengths — rainmaking (i.e., the ability to bring in work). Honest editors recognize their business strengths and weaknesses, and for many editors one prime weakness is marketing; a second is scheduling.

The result was that I focused on growing my business brand, not my personal brand. Even if clients are unfamiliar with the business name, they do recognize me as a company and they expect me to have “employees” and they expect one or more of my “employees” may be assigned their project. Clients do not lower their expectation as regards schedule adherence and quality of work; that remains the same regardless of whether I or someone else is doing the editing. And clients hold me responsible.

That responsibility — of quality editing — is the biggest drawback to subcontracting. Government paperwork is easily handled. The subcontractor sends me an invoice, I pay the invoice, and at the end of the year I send the subcontractor a 1099 Form and file copies with the IRS. (Note the process I am speaking of is the one I am familiar with, that of the United States. What is necessary or required in other countries is beyond my knowledge.) Generating these forms takes less than 5 minutes. I buy the ready-to-use/-print forms at an office supply store, put them in my printer, and generate the information using QuickBooks Pro. (Using an accounting program like QuickBooks makes bookkeeping easy. I use the software to print the checks and to generate many of the reports I use to track my business, such as a comparison Profit & Loss Statement.)

In the beginning, I reviewed the editor’s work. That took time, but significantly less time than if I had done the editing myself. After a while, reviewing of the editor’s work is no longer necessary. The editors with whom I currently subcontract have worked with me for many years; one editor has been working with me for close to 20 years.

The subcontracting relationship is a symbiotic one. At least in my case, the deal is that in exchange for my keeping a portion of the fee, I get all of the administrative duties, I pay the subcontractor regardless of whether the client pays me, and, perhaps most importantly from the subcontractor’s perspective, I do the marketing and am responsible for finding enough work to keep them busy much of the year.

It is this last responsibility that is the hardest. But because I have marketed my services as that of a company of editors, I am able to generate demand. Because the editors are highly skilled and have demonstrated that skill over the years, clients are not reluctant to contact me and ask “Can one of your editors handle this project for me?”

I grant that subcontracting is not for everyone. There is a reluctance to be a subcontractor because “Why should I pay someone else when I’m doing the work?” And there is a reluctance to do subcontracting because it takes the editor away from editing and into business administration, where many editors do not wish to be.

Yet subcontracting allows a busy editor to take on more work and allows editors who are reluctant promoters of themselves to focus on what they want to focus on — the editing rather than the marketing. If done correctly, subcontracting is a win-win-win: a win for the client, a win for the subcontractor, and a win for the administering editor.

Some editors say they would prefer to refer work they can’t handle themselves. Although referral is certainly an option, why refer when you can enlarge your business by subcontracting? I refer work that is outside my focus areas, for example, romance fiction. But I use employees and subcontractors for work that is within my focus areas. I want to retain as much of that work as I can, and subcontracting is simply one method by which I can do so.

If you haven’t considered subcontracting, you should; if you have considered it but dismissed it as being too troublesome, you should rethink it. Subcontracting can be a path to fiscal growth. The hard part is finding competent editors who are willing to work as subcontractors.

Richard Adin, An American Editor

March 26, 2014

The Business of Editing: An Embarrassment of Riches

Over the past 28 years of my editing business, I have been consistently busy. Rarely did I have any down time and I nearly always had multiple projects going simultaneously. As things worked out, there was a steady flow of work and it was rare that I needed to tell a client I couldn’t undertake a project.

More importantly, those few times when I had to decline a project, the client modified the schedule so that I could ultimately accept the project. This year, however, has been significantly different.

This year the projects are more numerous and larger. I always handled large projects (greater than 2000 manuscript pages) but the projects this year are larger than the large projects of the past (one runs close to 20,000 manuscript pages, and several others exceed 5,000 manuscript pages). For the first time, I am facing the problem of advising clients that I cannot take on their projects even with a schedule change, unless the schedule is altered by months rather than weeks.

Within the past two weeks, I have had to turn away seven projects; within the past month, I turned away 11 projects.

The problem occurs from a mix of things: (1) client projects are bunching rather than being spread across the year; (2) this is the time in the publishing cycle when new editions of many large books are coming to fruition simultaneously; (3) books that had previously been offshored are being brought back; (4) authors are more faithfully fulfilling their commitments to deliver manuscript on time; (5) the books are larger than the “usual” large; (6) in-house production editors are having to handle a larger number of books and so want to minimize the number of freelance editors they need to supervise; etc.

The question is: How do I resolve the problem?

One client suggested I hire more editors. I explained that the problem with that solution is that I cannot get a commitment from my clients for enough work to keep additional editors busy year round. The suggestion might cure the short-term problem, but it will create a long-term problem. Besides, it would add to my workload as I would need to monitor and supervise their work until I was comfortable that I could rely on the new editors to submit work that met my and the client’s expectations.

The embarrassment of riches (i.e., having too much work offered) is a real problem that freelance editors need to face at various points in their career. The editor doesn’t want to turn work away for a number of reasons, not least of which is a fear that the client will not call again. In addition, there is the worry that when the editor is ready to take on more work, there will be no more work to take on — that is, the editor will have hit a dry spell, which means a loss of income.

As you can see, the problem and the worries are not unique to the solopreneur; the problem is one faced by all forms of business. The solutions are not easy and all solutions amount to a form of gambling.

I see basically two alternative solutions (when change of schedule is not possible). The first is to accept the work and increase the number of hours the editor works. This solution has its own problems, such as trying to extend the workday may jeopardize the quality of the editing; most editors can only effectively edit for a maximum of five hours a day. And what happens when the next project comes along? How do you extend yourself even further? At some point, editing quality diminishes and you then jeopardize your relationship with the client.

The second is to say no to the new work and hope that the client will call again. The merits of this solution depends on the nature of the client. If the client is new, then you really are taking a big gamble that the client will return. If the client has been a regular client, the gamble is not very large because the client already knows the quality of your work and wants you to continue working for them. Here the gamble is more that when you are ready for additional work, the client has additional work for you, than whether the client will return.

In both instances — extending yourself to take on the additional workload and saying no — whether the client returns has much to do with the niche you have carved for yourself. For example, in my case, my “brand” is that of excellent editing service by a cadre of editors who require minimal supervision (basically, “here are the files, here are the peculiarities of this manuscript, please return edited files as quickly as possible”) and who use tools designed for large projects, including multieditor projects.

Clients return because they know they can rely on my company to handle projects with minimal problems and supervision, thereby freeing the in-house production editor to deal with other freelancers, other projects, and the myriad other things they need to deal with on a daily basis. Consequently, I feel more comfortable saying no to projects that cannot be squeezed into the schedule.

I admit that I did not feel so comfortable 25 years ago. The comfort with saying no has grown over the years as my reputation grew and the demand for my services grew and when I discovered that I had more work than time each year. (I would add that a good part of that rise in comfort came about as a result of my recordkeeping habits, which gave me a better picture of how I was really doing and, more importantly, what I should be doing. It is not enough to know how much I earned and how much it cost me to earn that; good data can give lots of insight into a business. See The Business of Editing: Recordkeeping I and The Business of Editing: Recordkeeping II.)

Scheduling remains a problem for the freelancer. We’ve previously discussed the problem; see, for example, Business of Editing: Workdays & Schedules and Business of Editing: Schedules and Client Expectations. All I can do is hope that I am making the right business decisions. My data say I am, but the tricky thing about data is that data are ever-changing.

I keep searching for a better solution than saying no, but I have yet to find one. Do you have any suggestions?

Richard Adin, An American Editor

March 19, 2014

The Business of Editing: Recordkeeping II

In The Business of Editing: Recordkeeping I, I discussed the importance of keeping records to determine whether it is better for you to charge by, for example, the page or the hour. But that article gave a very limited view of why recordkeeping is important.

Businesses run on data. As freelancers, we are well aware of the reliance of corporate clients on data — the data is used to determine everything from whether a new edition of a book should be undertaken to how much should be budgeted to produce the book. Although we do not have the same issues to think about, those that we do have are as equally weighty for our business.

For most freelancers, the beginning year(s) are devoted to accepting paying work of any type. When I first started, I accepted book editing, book proofreading, journal article editing, advertising, desktop publishing, and whatever other assignments came my way. And I kept detailed data on every one of those assignments.

Every couple of months I would analyze the data, but it wasn’t until I had about a year’s worth of data that I could draw conclusions. The data told me that for me:

  • advertising work didn’t pay
  • proofreading didn’t pay
  • book editing was the most lucrative work — but only if
    • it was on a per-page or project-fee basis
    • the manuscripts were of a sufficiently large size
    • the work was nonfiction
    • the work was not for academic presses
    • the work was not directly with the author
    • the work was copyediting

I also learned other things, such as what types of subject matter were best for me and that I could increase profitability by working with other editors.

Let me emphasize that the above were lessons I learned based on my experience and my data. I am not suggesting that they are true lessons for anyone else. Rather, the point is that the collection of data can help direct your business into the areas that are most lucrative for you.

Data also helps guide marketing efforts. Once I learned what was best for me, I was able to focus my marketing efforts on those services and (potential) clients. I stopped trying to be all things to everyone; instead I focused solely on those things that had the greatest potential to help me reach my goals. Once I realized that editing fiction was less lucrative for me than editing nonfiction, I eliminated my marketing efforts to fiction publishers and refocused my efforts to nonfiction publishers.

All of that is well and good, but the focusing of my efforts was not the biggest boon I got (and continue to receive) from data collection. Rather, the biggest boon is identifying those projects that were financially more successful and those that were less successful.

With that identification (which is something you cannot readily do if you charge by the hour because hourly charging makes all projects equally successful, regardless of whether that is the best or least success you can have), I was able to focus on what made one project more successful than another. I was able to glean the stumbling blocks.

One example: I discovered that projects that had hundreds of references with each chapter were a mixed bag of success. Those that were second or subsequent editions were more likely to have greater success than first editions because authors would often follow the citation formatting of the prior edition, but if it was a first edition, there often was no uniformity to the style the authors followed.

I also discovered that the two primary problems that I encountered with references were wrong journal abbreviations and wrong format of author names. The questions were (1) could these problems be solved or at least mitigated and if so, (2) what are the solutions? The solutions took some time to formulate, but having identified the problems, I could focus. The ultimate result was the creation of my Journals macro and the Wildcard Find & Replace macro. My journals database now approaches 20,000 entries (see Business of Editing: The Logistics of Large Projects for more information), which makes checking and correcting journal names easy and accurate. The Wildcard macro makes it possible to fix many of the incorrectly formatted author names. Combined, the two macros significantly reduce the time I need to spend on the references.

Of course, other problems also needed addressing, but I would not have been able to identify common problems in the absence of the data; in the absence of the data, I would have been able to identify only the problems in an individual project, which may not have recurred in other projects.

Ultimately, the more information you can parse from the projects you work on and can categorize, the more you will be able to identify common problems among your projects that you can address. The more of these that you address, the more profitable you can make your business.

There is all kinds of data worth collecting, but I have found one of the most valuable to be my churn rate; that is, how many pages an hour I can edit. That number varies by project and project complexity, but I have found it important to track. I know that I need to churn a minimum number of pages per hour (on average across a project) to meet my goals. When I see that a certain type of project consistently falls short of that minimum number, I know that I need to rethink accepting such projects.

As I hope is evident, data is the lifeblood of even a freelancer’s business. The more effort you put into collecting and analyzing data regarding your work, the more likely it is that your goals will be met. This endeavor is well worth the time and effort required.

What data, if any, do you collect and analyze? How often do you review the information? Has it helped guide your business?

Richard Adin, An American Editor

March 12, 2014

The Business of Editing: Recordkeeping I

Have you ever wondered why some businesses are successful and others are not? One key ingredient to being successful is knowledge — knowledge about one’s business.

Think about all the ways companies like Google and Facebook collect data on those who use their services — all the ways they “invade your privacy.” Why do they and other companies mine their users for information? Because data is important and these companies either want to sell others data about you or want the data to determine how best to reach you.

It’s true that editors don’t need the same information or even the same detail information, but we still need information about how our business is running. We need to know, for example, what our minimum effective hourly rate needs to be in order to ensure that we charge clients enough to meet our bills. (For a discussion on the effective hourly rate and what to charge, see the 5-part series Business of Editing: What to Charge. Part V includes links to the prior parts. The series should be read in order.)

Note: The following discussion centers on editing and editors. Modifications need to be made for writers and other freelancers, but the basic concepts hold true.

To determine what to charge, how to charge, and whether we are doing the best we can, we need to have data. Consequently, we need to keep records of what we do and know how to analyze those records.

Rule number 1 is to always track your work time. All analysis begins with knowing the amount of time spent on a project, how much time was spent working during a week, how many weeks of work we have over the course of a year. And we need to distinguish between billable work and nonbillable work. Every business has both, but it is the billable work that has to pay for both itself and for the nonbillable work. Nonbillable work includes the time we spend marketing and participating in online discussions and anything else that is work-related but for which we have no client to whom we can bill the time.

Rule number 2 for editing is to always convert a project to pages. It doesn’t matter what formula you use as long as whatever constitutes a page remains constant. By constant I mean that you use it for all your calculations, including how you would charge a client if you were/are charging using a per-page method.

Rule number 3 is that you collect the data for each project as a standalone as well as for projects cumulatively. That is, Project Alpha may provide data of 32 hours, 210 manuscript pages, and a fee of $800, and we need to know that information for Project Alpha. Project Beta’s data may be 21 hours, 250 manuscript pages, and a fee of $525. Project Gamma’s data may be 41 hours, 207 manuscript pages, and a fee of $1025. Cumulatively, Alpha, Beta, and Gamma’s data equals 94 hours, 667 manuscript pages, and $2350 in fees. As additional projects are completed, the cumulative numbers will grow.

Hours should be kept in quarter hours, rounded up; that is, if a project takes 5 hours and 3 minutes according to our timer, it should be calculated as 5.25 hours. There is always some unaccounted for project time and the rounding up to the nearest quarter hour accounts for at least some of it. My experience has been that over the course of time, the rounding up actually undercounts the actual time spent on work, but not by enough to matter for our purposes.

What do we do with this information?

The data used for Projects Alpha, Beta, and Gamma above assumed the billing method was $25 per hour. But we need to analyze the data to determine if this was the best billing method for us.

The very first bit of information we need to determine is what our effective hourly rate (EHR) needs to be. Is $25 an hour sufficient? It may be all that we can charge our clients for competitive reasons, but that does not mean $25 meets our required EHR. (Again, see the discussion of EHR referred to above.)

If what we can charge our clients and our required EHR do not at least match, or, better yet, exceed our EHR, then charging by the hour is not in our best interests. Even if the hourly rate we are charging meets or exceeds our EHR, charging by the hour may not be in our best interests.

Next we need to analyze each project on its own merits. Always remember that when we charge by the hour, the hourly rate we are charging is the most we can earn. Alpha was 210 pages, took 32 hours, and earned us $800. If we had charged $3.50 per page, we would have earned $735, or $22.97 an hour. In this instance, it appears that the hourly rate was advantageous.

Beta was 250 pages, took 21 hours, and earned $525. At $3.50 per page, the fee would have been $875 or $41.67 an hour. Here we took a beating charging by the hour. Gamma was 207 pages, took 41 hours, and earned $1025. At $3.50 per page, we would have earned $724.50 or $17.67 an hour. Again, on an individual basis, the hourly rate was best.

But what about cumulatively? Together the three projects were 667 pages and 94 hours for a total fee of $2350. At $3.50 per page, the fee would have been $2334.50, or $24.84 per hour — in other words, either choice was about the same. And if our required EHR is $25, the data, so far, shows that either hourly or per-page is an OK choice.

Where we have trouble is if our required EHR is higher than the $25 that competition will let us charge. We also have trouble if clients balk at paying for 41 hours for a 207-page project. Also, as we add more projects to the databank, we may find that Project Gamma was an anomaly and Project Beta was more typical, in which case we are losing significant sums by charging by the hour.

But the point is the importance of recordkeeping. Because we have the data, we can verify our choice of how to bill. In the absence of the data, we do not know if we are making the smart choice or not.

The data also gives us insight into projects. For example, I would want to know why the shortest project took the longest amount of time to complete and the largest project took the least amount of time. What was the difference? Did I do something differently? Is there something different that I could have done?

Although the data indicates that financially we chose wisely for these three projects, it also points out that there is something we are doing incorrectly. Our goal should be to do more in less, that is more pages of editing in less time editing.

The other purpose of recordkeeping is to take a long view of our work. I discovered early in my career, that as the data included more projects, I was losing significant amounts of money adhering to the hourly based system. Year after year the data demonstrated that while on some projects I lost money charging by the page, overall I did much better, which is why I have charged by the page for 28 years — the yearly and multiyear data keep reinforcing that per-page is best for me, in addition to being the only effective way to meet and exceed my required EHR.

I review my decision regularly. Should the data change, I would change. But I would not base a decision on just a few projects nor on anecdotal evidence. Consequently, I maintain records on every project. Recordkeeping is vital to business success because that is how the data needed to make business decisions is obtained.

(For the next part, see The Business of Editing: Recordkeeping II.)

Richard Adin, An American Editor

March 5, 2014

Why Are You Hiring a Professional Editor?

Increasingly, I wonder why professional editors are being hired. In reading online discussions, it is pretty evident that (a) everyone thinks they can be an editor, (b) a growing number of authors think that self-editing or peer editing is more than sufficient, (c) professional editors are believed to be overpaid, and (d) people who have edited a romance novel think they can as competently and easily edit a 5,000-page manuscript on the genetics of cancer.

Of course, a lot of discussion online centers around price. Not only are editors offering services at unsustainable prices (see The Business of Editing: Why $10 Can’t Make It for a discussion of sustainable pricing), but users of the editing services offered are balking at those prices. (How absurd is this “pricing war” becoming? I received a job application from an editor offering to work for 25¢/page!)

It seems to me that the fundamental problem is that those who need a professional editor’s services have no clue as to why they need those services except that everyone tells them that they do and because using an editor is what authors have done for decades. The users of editors do not contemplate the purposes for which they want an editor’s services.

We have discussed professional editors and what their role is in the publishing process numerous times over the life of this blog. The editor’s role hasn’t changed, probably since the time of the very first editor. Yet even with that history, when asked “Why are you hiring a professional editor?”, the answer is rarely inclusive of what the editor does.

Within the past few weeks, I was asked to edit a paper that was going to be submitted as part of a grant proposal. The instructions were clear: check spelling and look for egregious grammar errors but touch nothing else. Why hire me? (I turned down the work for a multitude of reasons, including the project’s schedule was incompatible with my schedule, but largely because I am not a spell checker — I am a professional editor who expects to make use of my editorial skills, not a verifier that spell check software didn’t miss something.)

I think a significant amount of blame for the state of editing lies in the hiddenness of what editors do. It is hard to point to a paragraph in a book and say that because of the suggestions of the editor, this paragraph altered the author’s destiny, turned the author into a star or into a has been. Editors may have star-making power, but if they do, it is not readily apparent to either the editor or to the person who hires the editor.

The person hiring the editor is really looking for someone who can take away embarrassments before they become embarrassing. That’s because of the limited understanding of the editor’s role. Each person who hires an editor needs to ask, “Why am I hiring a professional editor?” If the answer is to verify spell checking software, then the follow-up question should be, “Why am I hiring a professional editor for a job that doesn’t require a professional editor?”

Ultimately, there should be an epiphany. The questioner should realize that what she needs to know is what a professional editor does. It is this appreciation of the skills owned by a professional editor that will enable the answering of the original query, “Why am I hiring a professional editor?” Importantly, once the question can be answered, it is likely to move the focus away from pricing and toward skillsets.

Another result of being able to answer the question is that the asker will be able to analyze her needs and guide the editor as to what is needed and wanted: If all you need to do is cross the street, you don’t hire a taxi. It is the lack of understanding on the part of an editor’s clients as to what an editor does and why it is important that is at the heart of the problems professional editors face in terms of unrealistic expectations and downward pressure on pricing. It is hard for an editor to convince a client that she is worth $50 an hour when the client thinks the editor is just a glorified spell checker.

Someone who understands what an editor does, understands the need for a professional editor. It remains true that no one will be able to point to a single paragraph in a book and say that the editor’s transformation of that paragraph instantly altered the author’s status; such singular events remain within the realm of the speechwriter. Unfortunately, because readers never see the before and after of an editor’s work, it is not possible for readers to see how the editor has improved or worsened an author’s work.

In addition, an editor suggests and the author decides, which means that an author can easily reject the advice that would transform his work from a member of the pack to leader of the pack as accept the advice.

The reason a professional editor is hired is that the client wants to ensure that her manuscript is accessible and understandable, that it flows not just in her eyes and mind but in the mind and eyes of others. She wants to know that her word choice conveys the meaning she intends. Professional editors have honed the skills that deliver these results. Professional editors are able to maintain a distance from the manuscript that enables an objective assessment; it is very difficult for a mother to objectively assess her child.

Once it is realized what a professional editor does and what skills he has, it becomes clear that not everyone can be an editor, just as not everyone can be a lawyer or doctor; that peer group editing is not the same as using a professional editor; that professional editors are skilled artisans who are worth more than a bottom-scraping fee; and that the editor who has successfully edited a romance novel is not necessarily the editor who can successfully edit a large manuscript on cancer genetics.

In other words, once one realizes what skills a professional editor possesses, it is easier to see that different skills are needed for different projects. Now one can answer the question, “Why am I hiring a professional editor?”

Richard Adin, An American Editor

February 19, 2014

The Business of Editing: Why $10 Can’t Make It

In a previous essay, The Business of Editing: Worth in the Decision-Making Process, I wondered why editors and those who use our services attribute so little worth to the value of what professional editors do. As I noted, we are a large part of our problem because we accept — and even solicit — work at a price that cannot provide a sustainable lifestyle.

What brings this to my immediate attention, in addition to the experience I related in that essay, are the constant notes I see on various forums, including the “professional” LinkedIn forums, from “professional” editors who are willing to edit a manuscript for $10 or less an hour — and when questioned about the economics of such a fee, they vigorously defend it.

Let’s start with some data (all from “Opening Remarks,” Bloomberg BusinessWeek, February 17-23, 2014, pp. 10-13):

  • Minimum wage for tennis ball boy in Chennai, India: 37¢
  • Price of a Starbucks Frappucino in New York City: $5.93
  • One-tenth of 1% of hourly pay of JP-Morgan Chase CEO Jaime Dimon (based on 60 hours/week, 50 weeks/year): $6.66
  • Poverty wage for a single parent with 2 children: $9.06
  • Average price of 3 lbs ground chuck beef: $10.77
  • Prevailing hourly wage for NYC laundry-counter attendants: $11.62
  • Median hourly wage in Mississippi: $13.37
  • Hourly wage paid by Henry Ford to auto workers in 1913 adjusted for inflation: $14.71
  • What the hourly minimum wage would be if it had kept pace with productivity growth: $16.93
  • Hourly wage required to afford a 1-bedroom apartment in San Diego: $20.24
  • Living wage for single parent with 2 children in Pascagoula, Mississippi: $22.27/hour
  • Living wage for single parent with 2 children in San Francisco: $29.66/hour
  • Living wage for single parent with 3 children in Shakopee, Minnesota: $33.28/hour
  • Adjusted for inflation, Americans’ real incomes have fallen 8% since the start of 2000
  • U.S. Census Bureau’s poverty threshold: $18,123/year

I am a firm believer that each of us needs to set our own rate. However, to be able to intelligently set my rate, I need to know precisely how much my effective hourly rate must be for me to earn a sustainable livelihood.

(By sustainable livelihood, I mean an income that lets me live comfortably and not worry about meeting bills or whether I can afford to buy a book or go to restaurant or buy a toy for my grandchildren. For a discussion of how to determine what to charge, see my five-part series, “Business of Editing: What to Charge.” This link will take you to Part V where you can find the links to the other four articles. The articles should be read in order.)

So, when I say $10 an hour for editing is not sustainable, I base that on an analysis of fact. Let’s look at the $10 per hour rate. (The same analysis method applies regardless of your country.)

In the United States, $10 an hour equals a yearly income of $20,800 if you work 52 weeks in the year and every week you can bill and collect $10 an hour for 40 hours. If you can only work 30 hours a week for 20 weeks, 40 hours a week for 25 weeks, and 10 hours a week for the remaining 7 weeks, you will earn a maximum of $16,700. Similarly, even if you can earn $10 an hour for 40 hours and do so for 40 weeks of the year, your gross income will be $16,000.

Remember that these figures are gross income; let’s work from the best scenario, $20,800 per year. In the United States, you must pay the self-employment tax. This is the one tax that cannot be avoided. It amounts to 13.5% of earnings, which on $20,800 equals $2,808. Your yearly income has just been reduced from $20,800 to $17,992 — and nothing has been paid for except the unavoidable self-employment tax which is your contribution to Social Security and Medicare.

To do business these days, an Internet connection is required. I suspect it is possible, but I do not know anyone who pays less than $35 a month for the Internet ($420 per year). I also do not know any editor who does not have telephone service, usually at least cell phone service and often both cell and landline service, which runs about $50 a month ($600 per year).

I won’t add a charge for computer hardware and software; let’s assume that was bought and paid for last year. We now are at a “net” income level of $16,972. We haven’t yet paid for rent, food, gasoline, health care, television, clothing, heat and electric, and the like. In my area, the average rent for a studio apartment runs $972 per month. Assuming you can get one of the least-expensive studio apartments available and that it includes heat and electric, the cost would be $700 per month ($8,400 per year), which drops our available income for other necessities, like food and healthcare, to $8,572.

Food is always difficult, but I think $100 per week on average is probably reasonable, which means $5,200 per year, leaving us with $3,372. Do we really need to go on?

Can you scrape by on $10 an hour? Sure. People live on even less. But the biggest fallacy in this analysis is the base assumption: As an editor, you will have 40 hours of paying and collectible work every week for 52 weeks — that is, no downtime. It does happen, but the usual scenario is that an editor ends the year having worked fewer than an average of 40 hours per week and fewer than 52 weeks during the year.

Yet the expenses don’t fluctuate. The rent will remain the same whether you work 52 weeks or 32 weeks, 40 hours or 20 hours. Similarly, the telephone and Internet bills will likely remain the same. The bottom line is that $10 an hour is only doable under ideal conditions and even then is barely doable.

The $10/hour wage has multiple effects in addition to not being a “living” wage. The more often editors say they will work for that amount, the more difficult it is to rise from it. If a goodly number of editors are willing to work for that price, then the market price is being set.

I have discussed the hourly number with a number of clients. I have asked them about the basis for the hourly rate they pay and when it was last raised. Several have told me that they have not raised the hourly rate since the early 1990s. The reason is that there is a flood of editors willing to do the editing for a price that equals or is less than their hourly rate, so why raise the rate — the market is not demanding that the rate be raised and because of industry consolidation, editorial quality is not high on the list of corporate objectives.

Consequently, we are often our own worst enemy when it comes to rate setting. I know that when people ask on the lists about what to charge there is almost always a response that points to a published survey that quotes a higher-than-$10-per-hour rate, but then the flood of “I’ll edit for less” messages begins. There isn’t an easy solution to the free market problem except for this: Before setting your rate and agreeing to work for a rate, know what rate you need. I think those who low-ball rates would be less likely to do so if they really analyzed their needs.

The only other point I constantly raise with clients and potential clients is that the truly professional editor cannot and will not edit a manuscript for a nonsustainable rate.

Richard Adin, An American Editor

February 5, 2014

The Business of Editing: Worth in the Decision-Making Process

Within the past few weeks I had a single experience that was an initial up and a subsequent down. It is not that I haven’t had this type of experience before; rather, this time I had a little bit more information and so the experience registered with me at a different level of consciousness.

In the beginning…

I received a call from a publisher who was having a very unhappy experience with the editing of a series of books. The final straw had arrived, and the publisher called me to ask about my availability. The deal was somewhat typical of many of the convoluted deals I experience in today’s global editing world.

  • The publisher was not actually doing the hiring; its packager was responsible for the editing (and composition).
  • The author–series editor was unhappy and had been unhappy with the editing of the past several books in the series and wondered why I hadn’t been hired to do the editing. (I had edited the first book in the series and the author–series editor was pleased with my work on that first book.)
  • The publisher intended to strongly suggest to the packager that it hire me for this book, if I was available.

I advised the publisher that I would make myself available and would be interested in the project as it fit within my specialty of large projects. Consequently, the publisher made the suggestion to the packager and the packager contacted me.

The packager made an offer, which was not acceptable. I advised the packager of the terms under which I would accept the project, which terms included payment, schedule, page counting, and fee. The initial stumbling block was the fee. The packager’s offer was too low. The packager said it would contact the publisher because the amount I was asking was more than was authorized. We never got past the fee.

Eventually, the packager notified me that the publisher would not authorize the increased amount and so I would not get the project. As far as I was concerned, that was not a problem and it even worked out well as not an hour later, I was contacted by another publisher offering a larger project at a higher fee. But back to the original tale…

Because it was the publisher who originally contacted me, I kept the publisher in the loop by sending blind copies of my correspondence with the packager to the publisher. As it turned out, the publisher had authorized the increased fee. How do I know? Because the publisher called me, told me so, and asked if I would still be available if the miscommunication with the packager was straightened out. The publisher expressed surprise that the packager had made the decision on its own.

In the end, I did not get the project — to the publisher’s surprise, the packager told me no and immediately found someone else to do the project without consulting the publisher — but I did come to realize how differently various parties to the decision-making process view the worth of editors and editing. It is likely that the tale would have been simpler had the publisher originally set a price for editing that was commensurate with both the needs of the job and what the publisher wanted and needed both editorially and politically. In such event, the publisher would have had the packager contact me and the price would already have been “agreed to.”

But pricing is rarely set by those on the frontlines. The price decision is usually made by someone whose only contact with the project is a balance sheet. Although there may be flexibility in the price decision, it requires back-and-forth communication and justification, causing delay, which also affects other project aspects, such as schedule.

Yet it also raises another possibility. If the intermediary can obtain services for less than the approved price, who, if anybody, reaps the benefit of the difference between the accepted price and the available price?

More importantly, it raises the question of worth. What role does worth have in the decision-making process? For example, what is it worth to have a happy author? Or to know from experience with a particular editor that if you pay a little more you are unlikely to have to spend money fixing erroneous editing or consoling an irate author?

Worth is a two-way street.

Worth is not only involved in the question of how much should be offered to the editor, but how much should the editor require. I knew that the packager would have no problem finding an editor who would jump at the opportunity to do the project for the original price. I also know that at the original price and the level of editing required and the schedule to be met (remember that I had already done one book in the series), the editing could not be high quality — the combination of factors simply prohibits it; if it didn’t, I would have said yes immediately.

Which makes me wonder what is the worth of editing to editors?

If we value our services too cheaply are we not perpetuating the low-pay plague that has befallen editing as a result of globalization of editorial services and the rise of the transformative packaging industry? At what point does editing become a mere commodity, where an oversupply of editors forces the cost of editing downward because “editing is editing”? Unlike the maple syrup market, there is no market based on gradations; rather, “editing is editing” and all that matters is cost and speed as there is nothing to distinguish grades of quality.

Isn’t this what the indie author market has been telling editors since the explosion of the ebook and self-publishing market? That editing is editing and only price matters? Isn’t this what is both put forward and reinforced on forums like LinkedIn where editors are told they charge too much and too many are not good editors or don’t understand editing and the sacrosanctness of the author’s words as written and misspelled/misused; that authors can do better by self-editing or peer editing; that “I lost [dislike] my job and so am thinking of becoming an editor.” And let us not forget those editors who move us along that path by proclaiming to the world that they will provide not only a “perfect” edit, but do so for as little as 25¢ a page.

Increasingly, editing is viewed as having little financial value (worth). Increasingly, editors are shoring up that belief. It becomes particularly troublesome to me when I see that the ultimate client (in my tale, the publisher) is willing to extend itself but the intermediary is unwilling to take advantage of that willingness and is unwilling to provide the service that the ultimate client wants.

The problem of worth is hydra-headed; the solution requires cooperation of a type that will never be in the passionately independent world of editing, which world also suffers the plague of easy entry. I have my own solution: I provide high-quality editing in a form that allows me to specialize. As a consequence, although clients pay me more, they save other expenses that they would have to otherwise incur, and so find in my services that balance of cost and worth.

Where are you in this editing world?

Richard Adin, An American Editor

February 3, 2014

The Proofreader’s Corner: Editorial Freelancing — Are You Really Ready for It?

Today inaugurates a monthly series of essays by Louise Harnby, “The Proofreader’s Corner.” In her essays, Louise will explore the world of freelancing, drawing on her varied background as an accomplished proofreader, author of books on freelancing, and businessperson. Please welcome Louise as a new columnist for An American Editor.

____________

Editorial Freelancing:
Are You Really Ready for It?

by Louise Harnby

So you’ve decided you’d like to freelance. Congratulations! This means you’ll be self-employed. The survival of your new editorial business will depend on other individuals and organizations hiring your services.

A word of advice, however. If you currently work for someone else, make sure you’re actually ready for the world of self-employment before you clear your work station and wave goodbye to your boss, your annual-leave allowance, any pension provision (no matter how small), and your monthly salary.

There are lots of wonderful things about freelancing — things that most of us are ready for: control over who we work with, what we wear, the hours we choose to dedicate to our business, and the ability to work in the surroundings we choose.

There are lots of questions that we need to ask ourselves, too, before we embark on a freelance journey, not least of which is: Are we really ready?

“Ready for what? Ready to freelance? Definitely!” comes the response. “I’m sick of office politics. I’m sick of commuting. I’m sick of working with people who don’t appreciate me and who don’t behave professionally. I’m sick of not being paid what I deserve. I’m sick of having to barter with colleagues about who’ll come into the office over the Christmas holidays.” And so on.

Actually, I loved my last office job. Certainly there were times when things didn’t go as I wanted them to, but overall it was a lovely place to work and it was full of enthusiastic, inspiring people who were both friends and colleagues to me. I know many people who’ve not been so lucky in their careers; if you’re one of them, freelancing may seem like the solution.

An initial question…

If you’re still an employee and thinking of taking the plunge into editorial freelancing, ask yourself who deals with the following:

  1. Your tax deductions have changed in line with a salary increase/decrease.
  2. Your PC has broken.
  3. One of the organization’s customers hasn’t paid their invoice.
  4. You need to go on a course to learn how to use a specific piece of software.
  5. The company website is down.
  6. Your work station is filthy. The cleaner seems to have missed your work station!
  7. One of your external customers needs mail delivery of something TODAY.
  8. You feel ill and can’t attend a scheduled meeting; a colleague needs to stand in for you.
  9. You feel ill and can’t finish an urgent job; a colleague needs to stand in for you.
  10. The marketing materials need updating.
  11. The company’s suppliers need paying.
  12. The company needs to create/update/develop a mission statement.
  13. One of the department’s external suppliers has underperformed and a replacement needs to be found.
  14. You feel you’ve been treated unfairly by a colleague or client.

In my previous office-based job, where I was an employee rather than the employer, the answers to the above looked like this:

  1. A woman called Kim
  2. A man called Luke
  3. Kim again
  4. A woman called Jane
  5. Luke again.
  6. A woman called Marie
  7. A man called Paul
  8. A woman called Bernie
  9. Bernie again
  10. Me…or Bernie, Jane, Clive, Debbie, Lorna, and more!
  11. A man called Peter
  12. A man called Steve
  13. A woman called Claire
  14. A woman called Susan

In my current job as a freelance proofreader, the answer is “me”, and in numbers 8 and 9 I’d add: “Tough!  You’re on your own — deal with it.”

And all those things that you’re sick of…

Running your own business is empowering in many ways but it’s not a cure-all.

  • Politics — there may not be office politics, but there is still politics. Freelancers, editorial or otherwise, work with people. And where there are people there is politics. It’s unavoidable.
  • Lack of appreciation — many of your clients will be wonderful. But a quick browse on one of Facebook’s member-only editorial discussion groups will soon tell you that it’s not always an easy ride. Many editorial freelancers have had the odd run-in with a rude client, an unappreciative client, a “difficult” client, a client who doesn’t work within the same professional parameters. This is the world of work, and experiences like this are to be found everywhere – we’re not immune.
  • Appropriate remuneration — not all your clients will be prepared to pay what you feel is an acceptable rate. There are various suggested rates offered by editorial freelancing associations, but they are just that — suggestions. Furthermore, not all the work you do will be billable: while someone will pay you to edit, they won’t pay you to tune up your PC, update software, create an up-to-date CV, chase a client for payment, or take time out for training courses. Additionally, if you don’t have any work you don’t get paid — there’s no guaranteed monthly check.
  • Time off — don’t assume that you’ll never end up working holidays, evenings or weekends to hit a deadline. It’s unrealistic. Freelancing is hard, hard work. If you’re the primary income provider in your house there may be even more pressure on you to deliver, even once your business is established. In the early days you might be keen to accept anything you can, for the experience and the possible repeat work, even if that means putting in unsociable hours. Or one of your USPs (unique selling points) may be that you offer a quick-turnaround service. Reasons vary but irregular hours are anything but uncommon, even for established proofreaders and editors.

Getting ready…

Freelancing is hugely rewarding, though it will take most people time to build up a sustainable full-time business. Editorial work is also a wonderful way to earn a crust if you enjoy working with words and have the appropriate skills and mind-set for it. It’s worth being aware, though, that in order be ready to set up your own proofreading, editing, indexing or project management business, you’ll have to be prepared to sort out your own tax, insurance, IT, marketing, training, accounting, and administration. For many, that’s part of the fun of it; for others, those things are a chore. Whatever your view, once you become a business owner it’s your responsibility ­— take the necessary steps to prepare yourself.

Louise Harnby is a professional proofreader and the curator of “The Proofreader’s Parlour“. Visit her business website at Louise Harnby | Proofreader, follow her on Twitter at @LouiseHarnby, or find her on LinkedIn. She is the author of Business Planning for Editorial Freelancers and the forthcoming Marketing Your Editing & Proofreading Business.

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