An American Editor

January 21, 2013

The Business of Editing: New Year, New Books

It’s a new year and one of the first tasks I undertook as the calendar changed from 2012 to 2013 was to create the “books” I will use during 2013 to track how my business is doing. It doesn’t take me long to create the new books, less than an hour, but it is — aside from obtaining business to keep track of — the most important task I will undertake in the new year.

I know that there are many ways of keeping track of how well one’s business is doing. Over my 30 years as a freelancer, I have modified not only what information I keep, but how I keep it. About 10 years ago, I settled on my current system, which has been holding up well for me.

But before deciding how to keep the records, the decision as to what records to keep must be made. Once I decided on the information I needed, I then decided on how I was going to keep and use the information.

Basically, in addition to the usual chores of tracking income and expenses, there is certain information I want to know about each project I work on. Item #1 in the must-know column is how much time I am spending working on a project. Even the editors who subcontract to me are required to include on their invoices the number of hours worked.

Don’t misunderstand: I do not care if a subcontractor takes 10 hours or 30 hours to complete a project; I care that the effective hourly rate I am receiving from a client is sufficient to warrant continuing to do work for the client and I care that the subcontractor is making a reasonable effective hourly rate. (I discuss effective hourly rates in Thinking About Money: What Freelancers Need to Understand.) As part of the effective hourly rate discussion, I also keep in mind my Rule of Three, which is a critical determinant of whether I keep or fire a client. (Note, however, that this rule does not apply to one-shot projects such as are often encountered when working directly with authors.)

Keeping track of hours and my effective hourly rate also serves as a clue as to whether I am working as efficiently as I can. The data give me information so that I can determine that over the course of time my effective hourly rate for a project should be at least $x; that is, the average of all my projects over that period. If that number is $75 an hour and I find that my most recent projects came in at $35 to $50 an hour, I know I need to do some investigating. So, accurate hours are important — even though I charge a per-page or project rate rather than an hourly rate, my thinking is geared toward the effective hourly rate (EHR) statistic.

Another bit of information that I want to know is how projects break down by individual publishers and within individual publishers, by inhouse editor. Am I getting a balanced workload from a publisher/editor or are the projects skewed in one direction? If skewed, are they skewed toward a low EHR or a high EHR?

Along with that information, I also want to know how problematic a project was. For example, was the project loaded with incomplete references that were almost uniformly in the wrong style and thus requiring an excessive amount of time to edit? Consequently, I also rate a completed project on a scale of 1 to 10 (1 being easy, 5 being average or “balanced,” 10 being excessively difficult). If I find that a particular inhouse editor sends me only projects that rate 8 or 9, I think about whether I want to continue to accept projects from the editor.

There are a lot of factors that go into my rating a project, including how much information I did not receive about a project that I needed and how extensive the client’s style exceptions are (e.g., it raises the difficulty number if the client tells me to adhere to AMA 10th ed. style, but then sends me a list of 100 exceptions). This is the most subjective of the data I keep, but it is important because the last thing I want is to find that nearly all my projects are in the 8 to 10 range, but is without compensation that matches the difficulty level.

Of course, I also track page count, but do so for more than calculating the EHR: I want to track ratings along with manuscript length. This ratio is one reason I prefer very large projects (i.e., thousands of manuscript pages) — such projects allow me to get a rhythm going and make more effective use of editing tools such as EditTools. Page count also tells me how busy I am and whether or not I should consider doing more books in a particular series.

There are other little bits of information I track, but the above are the keys. I use both QuickBooks Pro and Microsoft Excel to maintain my records. QuickBooks Pro makes it easy to compare performance over time; for example, I can easily compare income and expense information for the first month of 2013 against the first month of 2012, 2011, and as far back as my first use of QuickBooks Pro. QuickBook Pros also allows me to check on sources of revenue in detail. And tracking accounts receivable is a breeze. (It also makes it easy to generate the reports I need for my accountant for tax filings.)

Excel lets me easily keep duplicate information about billing (I like to know that should one program fail for some reason, I have an alternative handy) and it allows me to track the bits of information I am interested in collecting and to manipulate them for analysis. QuickBooks Pro doesn’t require a resetting of the forms each year — it is a continuous history; Excel, however, does require me to reset the forms each year. I’m sure that a more advanced user of Excel wouldn’t have to reset the forms, but using Excel is not my job, editing is, and it is pretty easy to reset the forms for each new year. (I do retain, however, the prior years’ forms for a comparative history. I have Excel information going back to my first days as a freelancer.)

Now that we are at the beginning of a new year, you should think about what data you want to keep and how to keep it. The key is to make sure that you have enough data to make business-related decisions on facts and not on supposition. Keeping track of data is not time-consuming; it is necessary to maintaining a healthy and prosperous business.

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