An American Editor

January 31, 2018

The Business of Editing: The Line in the Sand

Richard Adin, An American Editor

As I have gotten older, I have found that things in life have reversed, by which I mean that things that once irritated me no longer irritate me and things that didn’t irritate me now do irritate me. Yet there are a couple of things that irritated me when I began my editing career that continue to irritate me today, although today’s irritation level is more strident.

One example of a continuing irritation we have already discussed on An American Editor — the question that both inexperienced and experienced editors never seem to get tired of asking, even though they have been told hundreds, if not thousands, of times that there is no such thing: What is the going rate? (For that discussion, see A Continuing Frustration — The “Going Rate”.) Today’s irritant is the fast-schedule-but-low-pay project offer, which also has been previously discussed on AAE in, for example, Business of Editing: Schedules and Client Expectations, Business of Editing: Workdays & Schedules, and The Business of Editing: The Standard Editing Workday & Workweek.

What brings this back to the forefront is that this month I have already declined four offered projects that combined amounted to 11,000 manuscript pages (which, of course, raises another issue, what constitutes a manuscript page, a topic previously visited on AAE; see, e.g., The Business of Editing: A Page Is a Page — Or Is It? and The Business of Editing: How Many Pages an Hour Do You Edit?). I declined the projects because I am already under contract to edit two books by the end of April that combined run a bit more than 19,000 manuscript pages.

I would have declined the four offered projects even if I were twiddling my thumbs and staring at an empty work basket because the pay rates were abysmal and the schedules Orwellian.

Consider just one of the projects. The client’s estimate was that the number of manuscript pages was 2,500. Based on past experience with this client, I know that the true number of pages (by “true,” I mean as calculated using my formula, not their formula) would raise that number by at least 25% and more likely closer to 35%. The size is fine; in fact, it is my preferred project size — bigger is better — since I do not like to tackle small projects (less than 1,000 manuscript pages), even though I occasionally will (most of the projects I take on run 1,500+ manuscript pages and many run 7,500 to 15,000 manuscript pages).

The client’s schedule was Orwellian: two weeks to complete copyediting. The schedule was matched by the abysmal rate offered: $2.60 per manuscript page. And, according to the client, the manuscript required heavy editing, which in the client’s parlance meant none of the authors’ primary language was English. (The subject matter was medical.)

Unlike some editors who have imaginary lines that they draw and claim they will not (but always do) cross, my lines are like those of the Great Wall — in stone, permanent, immovable, and I will not cross them. I told the client that I was declining the project because the schedule was Orwellian and the pay abysmal. For me to take on the project, the shortest possible schedule would be based on editing 400 manuscript pages per week with the count done using my formula and a rate of $15 per page. The more reasonable the schedule, the lower my per-page rate would become until we hit my absolute minimum, which was still higher than their offered rate.

My two uncrossable lines are these:

  1. The schedule must be doable in the real world, not a fantasy world.
  2. The compensation rate must correlate with both the schedule and the expected editing difficulties (i.e., does the client rate this as a light, medium, or heavy edit and what do those terms mean in the client’s parlance).

I know how fast I can edit because for 34 years, I have mostly edited manuscripts from the same subject area and I have kept careful records. In addition, I have created tools, like my EditTools macros, and use tools created by others, like Jack Lyon’s Editor’s Toolkit Plus, that are specially designed to make my work more accurate, efficient, and speedy.

I know how much I need to charge for my editing work because I have calculated my required effective hourly rate (also discussed in prior AAE essays in detail; see the series Business of Editing: What to Charge) and I know how much I want to charge for my work so  I make a profit, not just break even. And I know how much of a premium I require to be willing to work longer hours than my standard workday and workweek (see The Business of Editing: The Standard Editing Workday & Workweek for a discussion of work time).

The point is that if I cross those lines I have drawn, I hurt myself. Why would I ever want to hurt myself? In the olden days, before I knew better and before anyone with experience set me on the correct path, I thought if I accepted a project that was on a tight schedule with low pay, it would get me an in at the company, get me more work, and give me a chance to show how good an editor I am, with the result being that the company would offer me better-paying projects to keep me as part of their editorial stable. It didn’t take long for me to learn that the only fool in that scenario was me.

Sure, I got more work offers, but never at a better rate nor on a better schedule. As one project manager told me, I had already demonstrated I could handle the schedule and was willing to work for the offered rate, so that is all I would ever get.

I drew my lines and I never cross them.

I know that some of you are shaking your head and saying that you can’t afford to do that. I did the same until I realized I was always behind and never moving ahead — I was enriching my “clients” at my expense. Once I took my stand, I found that I was getting better projects and better pay — not starting the next day, but starting in the not very distant future.

Successful editors are successful businesspersons, too. Successful businesspersons do not do things that benefit others at their expense. They draw lines that they do not ever cross. I have drawn mine; are you ready to draw yours?

November 27, 2017

A Continuing Frustration — The “Going Rate”

Sadly for me, I still read editing-related blogs and posts on forums like LinkedIn. I say sadly because there is little more frustrating to me than to read the repetitive, advice-seeking posts and the repetitive, well-meaning, but usually incorrect and nearly always factually incomplete responses.

How many times does it have to be said that what I charge a client and what Betsy charges a client is wholly irrelevant to what you should charge a client? Apparently, it is something that cannot be said either frequently or emphatically enough because rarely does a day pass without someone (or multiple someones) asking something similar to “What is the going rate?”

If I say I charge $50 an hour and Betsy says she charges $20 an hour and Phil says he also charges $20 an hour, what is the answer to the going rate question? Add Susan ($10), Robert ($15), and Jeremy ($25) to the mix. Does the answer change? Have you really gotten an answer? Even if the universe of editors is small (say, 1,000 editors in total), which we know is not the case (there are more than 100,000 editors in the United States alone), how representative of the whole universe of editors are the responses from me, Betsy, Phil, Susan, Robert, and Jeremy?

After getting a bunch of responses, the asker usually decides she now has an answer, say $20/hour. But she has such incomplete information that the number she has decided is the “going rate” is useless — too much necessary information is missing, information that qualifies (explains) each response.

For example, I didn’t tell you that I have been in the editing business for more than 30 years, bill at least 1,800 hours each year and have done so for at least the past 25 years, only work with tier 1 publishers, and only do copyediting of manuscripts that exceed 1,500 manuscript pages. Betsy didn’t mention that she does editing part-time (after her day job as a senior executive at a Fortune 100 company) for relaxation, has been editing for 3 years, and bills no more than 200 hours in a good year. Phil didn’t mention that he is struggling to find enough work to edit full-time and is slowly building his business, which is focused on working with university students to improve their research papers and resumes. Fortunately for Phil, his spouse is the primary household income provider and they live in a low-cost area where a household income of $35,000 lets one live decently. Phil also didn’t mention that he started his business only 3 weeks ago and has edited only two 5-page papers.

Susan, the low-baller, didn’t mention that she is a retired software engineer (retired 8 years ago) who took up editing to stave off boredom. She was a database specialist and now edits only technical articles intended for publication in specific database journals. She doesn’t need the income but feels she has to charge something for her work. And because she is retired, she limits the number of hours she is willing to work as an editor each month to 15 or fewer.

And so it goes.

Is this information important? Surely it is if you want someone else to tell you what to charge your clients. Why? Because you are a new fiction editor working with your first indie author on the author’s first novel and when you ask what the going rate is, shouldn’t you compare apples with apples, not apples with oranges? Doesn’t (shouldn’t) the response of the fiction editor who has edited 200 novels over the past 5 years carry more weight than someone like me or Betsy or Phil or Susan?

The usual response is that having an idea of what others charge is important so that the asker doesn’t price herself out of the market. Really!?

Suppose every responder to your question said exactly the same number — $15/hour. Now you feel confident that you, too, can (should) charge $15/hour. But you are still ignoring significant missing information and its impact on what you should (need to) charge. If you can only get enough work to enable you to bill for 20 hours a week, your gross earnings will be $300 per week. What if you can’t get enough work to bill for 52 weeks? Your gross yearly income will be less than $15,600 (the 52-week amount). Will that be enough to pay rent, utilities, and food, let alone anything else? Is the 52-week total ($15,600) enough?

My point is that not only do you need more information from responders to be able to make any use of their responses, but you need to have already analyzed your own economic needs. If you have analyzed your economic needs, then why do you need to ask the question? You already know what you have to charge in order to survive, so what difference does it make what the rest of the world charges? Either you can earn what you need to earn or you need to find a job (or a combination of jobs) that enables you to meet your financial needs.

The answer usually given is that if the going rate is $20 an hour, then that is all I can expect to charge, so it doesn’t matter that I need $50 an hour. And this is where the businessperson in you needs to come front and center.

Few editors can charge more than the “going rate” and actually get work. The confusion is in the terminology: for the businessperson, “I need to charge $50/hour” = “my effective hourly rate (EHR) needs to equal $50.”

The businessperson calculates what she needs to charge to make a profit and then figures out how to charge so that she makes that profit. It may mean using a different charging method; for example, charging by the page rather than by the hour, or defining a page by character count rather than by words, or something else. It may mean changing niches; for example, going from working with packagers to working directly with authors or changing from fiction to academic treatises.

The businessperson also plans what steps she needs to take to meet that EHR. As I have stated many times on An American Editor and elsewhere, I realized that to meet my financial goals I needed to streamline editing processes without sacrificing quality. My answer was macroizing as many tasks as I could and figuring out how to make Microsoft Word work for me. That process was what led to my creating and expanding EditTools. The process also led to my buying other software, like Editor’s Toolkit Plus, rather than reinventing the wheel.

Editors need to rethink their approach to the business side of editing. I know a lot of editors who are excellent editors but not-so-good businesspersons and who prefer to downplay, if not outright ignore, the business side of being an independent editor, that is, all the things that were done by someone else when you were an employee instead of a business owner. The balance needs to be changed so that editing skills and business skills are more in balance. It is one thing to have the scales tip in favor of editing, and quite another to have the scales heavily weighted toward editing. Perfect balance is not needed, just closer to balance.

One step in that direction is to get sufficient information about a responder’s business when a responder tells you what the “going rate” is. In addition, you might inquire how the responder decided to charge what she charges. Is she charging $20/hour because her client offered that amount, or because she calculated what she needs to earn an hour, or because someone else told her that was the “going rate”? I would give the least amount of credence to an answer that was based on someone else having told the responder that was the going rate, and the most credence to the number she actually calculated.

Regardless, it is time for editors to wise up to the fact that there is no such thing as a “going rate” — there is only what rate someone else is earning/charging and usually that rate is an arbitrary one, essentially grabbed from air and not supported by a solid informational foundation. With a new year arriving soon, it is time to become more of a businessperson and focus more on the business aspects of being independent editors.

Richard Adin, An American Editor

June 28, 2017

From the Archives: What to Charge (Part V)

(The following essay was originally published on
An American Editor on August 19, 2013.)

The previous four parts of this series (I, II, III, and IV) discussed the effective hourly rate, how to calculate it, and how track it. The remaining question, as several colleagues have noted to me, is: “Why bother?”

Professional editing is a business. If it were a hobby, it would not matter whether or not we made a profit because we would be pursuing editing purely for our love of editing. Yet, for most of us, editing is a business, and as a business we need to be concerned with profit and loss. Even businesses that are organized as nonprofits need to be concerned with profit and loss. The difference between a for-profit and a nonprofit business arrangement is that the former distributes any profit to its “owners” whereas the latter uses any profit to further its goals (i.e., there is no distribution to owners because there are no “owners”).

A business cannot make a profit if it does not generate income in excess of its costs of doing business. It’s a simple concept but one that seems to be just outside the grasp of many business owners.

Knowing whether we are making a profit or suffering a loss is important to editors because we, just like all other businesses, need to constantly evaluate whether what we are doing is worth continuing to do. If we are not making a profit and if we cannot adjust what we are doing so that we do make a profit, perhaps we need to pursue a different career path or conduct our business differently.

Tracking one’s effective hourly rate (EHR) is a way to determine the health of one’s business. It is also an alert system to tell us if and when we need to make adjustments in how we operate our business.

If we know, for example, that no matter what we do, our current client base will not pay a rate higher than $20 an hour (or its equivalent), and if we know that our EHR, as we are currently operating, needs to be higher than what our client base is willing to pay (the required EHR), then we know that we need to make adjustments in how we conduct our business.

This is the critical and most important reason to know and track the EHR. When we operate without knowledge of our EHR, we assume that if we bring in $1,000, it represents mostly profit. This is the allure of the hourly rate: an hourly rate makes us believe that we are earning a decent income because we are assured that for every hour we work, we earn that hourly rate. In real-world business, however, it is not so simple.

Editors, like all businesses, have a production line. I know we do not like to think in those terms, but the fact is that we do operate a production line. (A “production line” is not synonymous with “assembly line.” Production line refers to the manner and order in which we do our work.) We receive a manuscript and we take certain steps in dealing with the manuscript, steps that we repeat with each project. For example, the first thing we may do is clean up the file to remove extraneous elements like extra spaces. Then we may break out reference lists from the main text, or put figure legends in a separate file, or insert bookmarks, or whatever. Ultimately we get to the editing phase, but it is rarely the very first thing we do.

As part of our production line we may do multiple passes. We may do a rough edit, then a second edit, then a cleanup, then a final pass to search for anything we may have missed. What exactly each of us does is not as important as that we recognize we have these steps and that we can articulate them. The articulation is important because part of what we need to do if we are not making a profit is determine what steps in the production line can be omitted or modified so as to make the step more efficient.

One publisher, for example, looks for the least-expensive editor who meets certain minimal qualifications and then provides a multipage checklist of things it expects the editor to do. There are several interesting aspects to the list, one of which is the blurring of the roles of the developmental editor and the copyeditor. The publisher expects copyeditors to fulfill both functions for one very low price. In addition, the publisher has its own style. which differs from standard styles in small, subtle ways. However, failure to comply with the publisher’s house style results in requests for the editor to repeatedly go over the manuscript to fix it for no additional fee.

Faced with not earning the EHR, an editor has to determine what changes can and must be made in the editor’s production line in order to earn the EHR. Will, for example, eliminating a second or third pass over the manuscript reduce the hours sufficiently to raise the EHR? Will changing the production line to a single-pass process do the trick? What other adjustments can be made that will result in increasing the EHR? Or does the editor need to drop this particular client? Can the editor afford to drop this client (i.e., how easily can the revenue this client generates be replaced)?

The reason to bother with calculating and tracking the EHR is to create a foundation for making business decisions. Bringing in revenue of $50,000 a year is nice, but meaningless, if we do not know what our cost of doing business is or whether the procedures we follow are hampering, increasing, or having no effect on our profitability — or even how many hours we need to work to make that income. It is also meaningless if we do not know whether doing work for a particular client is profitable. If working for a particular publisher is not and cannot be profitable, should we not know this so we can decide whether or not to drop the publisher and find other clients?

Perhaps even more importantly, bothering with the EHR lets an editor determine how well the editor is doing over time. Is the editor’s speed and efficiency and productivity increasing or decreasing or remaining stable — month to month, year to year?

The EHR also spreads the earning requirements over the full work week, thus accounting for the nonbillable time we need to devote to business, such as for marketing. It also is (usually) a rate we can more realistically expect clients to accept. More importantly, unlike an hourly rate, the EHR forces us to think in terms of a business week and not just in terms of billable hours. Too many small business owners think that the only hours that are part of the business calculation are the billable hours, which is incorrect.

Finally, the EHR, unlike an hourly rate, lets us fully measure productivity and efficiency. The more productive and efficient we are, the more often we exceed our EHR. When we charge by the hour, we can never exceed that hourly rate.

The EHR is foundational information that acts as a guide to business decision making. It is something against which a business can measure what the business is doing and determine whether the business is on the correct path or needs to alter its course — making calculating the EHR worthwhile.

Richard Adin, An American Editor

June 26, 2017

From the Archives: What to Charge (Part IV)

(The following essay was originally published on
An American Editor on August 14, 2013.)

Originally, part IV was scheduled to be the last part of this series, and was to tackle the question, “Why bother?” However, what was part IV is now part V. The change was made because I have received several requests for clarification on how to determine what to charge. The confusion seems to stem from two things:

  1. The effective hourly rate (EHR) discussed in parts I, II, and III, is based on a 40-hour work week. The calculated EHR is what is needed to be earned each hour of that 40-hour work week. This does not mean that you must have 40 billable hours, just that this is the EHR that each hour has to earn even if the earning has to be compressed into 20 billable hours.
  2. I did not take the calculation to the final step, which is determining the actual hourly rate. I assumed that readers would be able to make that final step themselves. I have been using the EHR for so many years that what to do seems obvious to me, but in reality, it is not so obvious — as readers have pointed out — and so that is the topic of this post: How do you calculate the actual hourly charge?

For purposes of this example, let’s change the dynamic a bit. Although we’ll retain the $30 per hour charge, the 20 billable hours per week, and the 40-hour work week for purposes of calculating our current net EHR, let’s make our expense number a more realistic $4.60 per hour (based on these monthly expenses allocated to the business: rent/mortgage = $500; heat, water, and electric = $200; telephone = $40; and maintenance = $50). This changes our net EHR to $10.40 ($15 gross EHR − $4.60 expenses) based on a 40-hour work week.

(If your work week is only 30 hours, the method of calculation is the same but the numbers change. For a 30-hour work week, your gross EHR would be $20 and the same expenses would equal $6.13 per hour, giving a net EHR of $13.87. The figures change because the number of hours over which the EHR has to be earned has changed. You need to calculate the EHR using your work week, expenses, and hourly charge.)

Although some readers think we only need to pay attention to billable hours, that is not true. It is true that in a 40-hour work week we do not bill for 40 hours; we do have administrative matters and marketing, for example, that need to be addressed for which we cannot directly bill a client. But these are no different from the rent. They need to be paid for and every business calculates what it needs to charge customers by including time spent on nonbillable matters. The same is true for sick days and vacation time. These items are part of the expense of doing business; we just cannot give them precise numbers like we can give rent.

Consequently, the hourly charge that we determine accounts for the facts that we have only so many billable hours in a week and we also have hours in the week that we have to devote to nonbillable matters.

If we were to use the net EHR we calculated ($10.40), your average weekly earnings, after expenses, would be $416 or a yearly income after expenses of $21,632. But our goal is for that yearly income to be $50,000.

Here are the steps we need to take to obtain the EHR data and calculate how much we need to charge to reach our goal of $50,000 after expenses:

  1. Calculate the EHR for $50,000:
    $50,000 ÷ 52 weeks = $961.54 per week
    $961.54 ÷ 40 hours = $24.04 EHR
  2. Add the expenses to the EHR because the EHR currently only represents our net income (after expenses) goal
    $24.04 EHR + $4.60 expenses per hour = $28.64 EHR
    (or an average gross weekly income of $1,145.60 which translates to gross yearly earnings of $59,571.20)
  3. Calculate the number of billable hours in a year:
    20 billable hours per week × 52 weeks = 1,040 per year
  4. To determine the hourly rate you have to charge, divide the gross annual income by the number of billable hours:
    $59,571.20 ÷ 1,040 billable hours = $57.28 per hour

Now you know what you have to bill per hour to have a net annual income of $50,000 while having only 20 billable hours a week.

Your question is: This number can be calculated without calculating the EHR, so why go through the trouble of calculating the EHR? Why not go to the heart of the matter directly?

The answer is that few of us can directly charge the hourly rate we need to earn. How many of your clients would knowingly pay you $60 an hour for copyediting? Most of us have difficulty transparently charging and collecting that amount, especially if we work for publishers. That is why we began this series with the hourly charge of $30.

We need to calculate the net EHR to see what we are really earning under our current charging scheme. Most of us see that this week we brought in $600 and the week before we brought in $900 and last year we had a gross income of $41,628. And we also see that when it came time to pay the rent, we paid it, even if we struggled to do so — the same being true of our other bills. But few of us really know what we are really earning, and in the absence of knowing that, we have no foundation on which to evaluate the manner in which we run our business.

The hourly charge figure tells us that if we want to continue our current way of doing business, we need to double our hourly charge (from $30 to $60). In other words, our current business methods are not sustainable at the level of our economic goal.

The $28.64 EHR, which is based on your economic goal, tells you what hourly rate you need to average over the 40-hour work week in order to meet your economic goal. This number is important because it is often a more achievable number. It is also an argument for abandoning the hourly rate method for the per-page or project-fee method of billing, because, unlike the hourly method, these methods reward you for productivity and efficiency.

The result is that with these three numbers in hand, you are in a position to evaluate your current business and can align your goals with your decision regarding what and how to charge. For example, if you know you need to charge $60 an hour for 20 billable hours to meet your goal, you can either find clients willing to pay that rate, increase the number of billable hours in your work week, or lower your economic goal. If you increase your billable hours from 20 to 30, the hourly charge drops by approximately one-third, from $57.28 to $38.19 (or from $60 to $40). (Note: The EHR does not change. The EHR changes only if the work week total hours change and/or the economic goal changes.)

In my experience, it has been impossible to charge the hourly rate I would need to meet my economic goals. On the other hand, by analyzing my work habits, increasing my productivity and efficiency, and using a per-page/project-fee method of charging, I have been able to meet, and almost always exceed, my required EHR. There are weeks when I do not meet the EHR over the course of the work week hours, but those weeks are made up for by the weeks that I exceed my EHR.

The EHR also serves as the standard against which I judge my business. I evaluate clients and projects based on the EHR. Clients whose projects regularly do not meet or exceed my EHR become ex-clients, because I know they cannot be made profitable.

I am not in business to lose money or not meet my goals, which is why I rely on the EHR and review it constantly. Are you in business to lose money? Under your current setup, how do you know whether you are making or losing money, and if you are making money, how much you are really making?

Next is part V, which tackles the question: “Why bother?”

Richard Adin, An American Editor

June 21, 2017

From the Archives: What to Charge (Part III)

(The following essay was originally published on
An American Editor on August 12, 2013.)

In parts I and II of Business of Editing: What to Charge, we discussed the effective hourly rate (EHR), how to calculate a true EHR, why it is important to have a definition of what constitutes a manuscript page, and why I think it is smarter to charge by the page or project rather than by the hour. But knowing your required EHR is not enough; you need to track it as well.

I use two programs to track my EHR: Timeless Time & Expense (TT&E) and Microsoft Excel. In the case of TT&E, I am using an older version because it does all that I need. TT&E is not freeware and it is a bit pricey if all you want is to track time, but I like that it makes it easy to track multiple projects. In any event, what you need is a good timing program that will track how much time you spend on a project and give you a total time.

Excel is a program that most of you are familiar with. However, as with TT&E, it is not necessary to use Excel; any quality spreadsheet program will do.

Tracking time is key. I round total time up to the nearest quarter hour. For example, if the total time I spent on a project is 25 hours and 1 minute (25:01), I enter that as 25.25 hours. I know that somewhere along the line I missed timing a few minutes of work, so this is a way to compensate.

Another thing I do is track the time based on billing cycles. If a project is to be billed only upon completion, then I track the time until the project is complete and being billed and use the single total time. If the project is being billed in batches, then I track the time for each batch and enter the time in Excel batch by batch.

As you can see from the following image, I use a simple form to track important data.

In the sample, I have given a spread of per-page price ranges. The key, of course, is to maximize price and minimize hours. (I know that some of you will point out the high pages-edited-per-hour rate that this illustration uses. The pages and hours shown are taken from a real project. Remember, however, that this is an illustration and your figures will differ.)

What is important is that even at the lowest per-page price of $2 per page, the EHR exceeded the required EHR of $25 (based on editing 16 pages an hour; at a rate of 13 pages per hour, the EHR would still be exceeded but at 12 pages an hour, it would not be met. However, at $2.50 per page, where the illustration has a 19 pages-edited-per-hour rate, even at a rate of 12 pages per hour the EHR would be exceeded). This illustrates that it is possible to have a low rate and still meet and exceed the required EHR if you are efficient and productive. Do not, however, take this as an argument for a low per-page rate, nor an indication that you will always exceed the required EHR, nor an indication that one can always edit at such a high pages-per-hour rate — this is just an illustration of how to calculate and track the EHR.

If the per-page rate had been $2 for the whole project, the EHR would have been $38.45 based on the numbers. However, to achieve that EHR, the editor would have had to average, as indicated in the image, 19.23 pages an hour. Depending on the project and the parameters of the project, that may be doable.

But we stray off course.

The key to determining what to charge is determining your required EHR. But to determine that EHR, you have to have accumulated data. In the beginning, you guess, but as data accumulates, you can be more precise in your calculation. The important data are the EHR for each batch of submitted manuscript, as well as for the entire project, and your average number of pages edited per hour (shown in the image at the bottom far right).

Unfortunately, the image doesn’t show the column labels. Column A is the Date; B is Batch #; C is Number of Pages; D is Per-page Rate; E is Number of Hours; F is EHR; G is Charge; H is Total; and K is the Average Pages/Hour. You need the column information for the following Excel formulas to make sense.

Although the information is important, columns A and B are not needed to calculate any of the other data in the table.

The formula to calculate the EHR of column F is:

=IF(E11=0,””,(C11*D11)/E11)

where, for example, E11 represents the data in column E row 11. The “” is an instruction to leave the cell in column F blank if the data in E11 equals 0.

To calculate the Charge of column G, use the formula:

=SUM(C11*D11)

The Total column (H) needs two formulas. The first is only for the very first row of data, which in this example is row 11:

=SUM(G11)

The formula is that simple because in this instance, the Charge and the Total are identical. To calculate subsequent Totals by row, the formula is:

=SUM(G12+H11)

which means to add the new Charge found in this row (G12) to the Total in the row immediately above (H11) so that the Total in this row is a running total. Remember that the numbers (e.g., 12 in G12) represent the row number; the letter represents the column.

All of the data is row-centric; that is, the calculations are for the row only. The exception is the Total column, which is a running total.

The Profit/Loss Data row is where we get our overall information. The formulas for the various entries are as follows:

Total Pages: =SUM(C11:C22)
Total Hours: =SUM(E11:E22)
Ave Effect Hrly Rate: =IF(E24=0,””,G24/E24)
Total Billed: =SUM(G11:G22)
Project Gross Profit: =SUM(G24-D24)

Finally, the formula for the Ave Pg/H is:

=IF(E24=0,””,C24/E24)

Because I hire other editors to work on projects, I need the IC Fee and the Gross Profit percent (%) information. For those who never hire someone else, these items can be omitted. For those that do hire, you manually enter the amount of total fee paid to the other editor under the IC fee and use this formula to calculate what percentage of the total fee you retained:

=IF(G24=0,””,H24/G24)

Although not shown in the illustration, you can also track your EHR over the course of time by adding up the total hours from each project and the total billed for each project and dividing the grand total billed by the grand total hours.

With this data at hand, you can determine whether you are charging enough for your services. Adjustments can be made as needed. This information will tell you the state of health of your business. If you see that you are not making your required EHR, you need to analyze why not. Are there things that you can do to improve your efficiency and productivity? Or is the only solution to raise your prices and find new clients?

Part IV adds some clarification and Part V concludes the series, tackling the question: Why bother?

 

Richard Adin, An American Editor

June 19, 2017

From the Archives: What to Charge (Part II)

(The following essay was originally published on
An American Editor on August 7, 2013.)

In Business of Editing: What to Charge (Part I), we ended with this question: Is the $30/hour rate you charge sufficient to generate your desired annual gross income based on your EHR? The answer is “no.”

Your current charge of $30/hour is not enough to generate the desired gross annual income of $50,000 because your net EHR is $13.56 (based on 20 billable hours in a 40-hour workweek), not the required minimum EHR of $24.04. Your EHR is $10.48 too little. Based on your EHR, your gross annual earnings will be approximately $28,200, or a little bit more than half of your desired annual gross income.

There are several options for curing this problem. First, increase the number of billable hours you work each week. At the hourly rate of $30, you need to generate at least enough work to bill for 34 hours every week for 52 weeks a year (or its equivalent). That will generate a net EHR of $24.06 ($30 × 34 hours = $1020 ÷ 40-hour workweek = $24.06). That is not impossible to do, but if you haven’t averaged at least 34 hours a week of billable-at-$30-an-hour-work over the course of a year in past years, you will have to devote some time, money, and effort to bring your workload to that level.

Second, you could lower the amount of your desired gross annual income. That would certainly change the calculation, but it would raise other questions, such as: Are you earning enough to meet your bills? Are you earning enough to warrant remaining a freelance editor? Is your annual income sufficient to support the lifestyle you want?

The third option is to raise your hourly rate to $51 an hour and continue to generate an average of 20 hours of work a week for 52 weeks, which would give you a net EHR of $24.06 and meet your income goals.

The fourth — and best — option is to calculate the net EHR you need to meet, which is, in this case, $25 (it really is $24.06, but rounded numbers are easier to deal with and so we round up). Then, instead of trying to charge and collect an hourly rate of $50, charge a per-page or project fee and work to increase your efficiency so that you can generate your necessary EHR. It is more likely that clients will accept a per-page or project fee than an hourly fee that they view as too high or outside their budget.

Also very important to consider when deciding whether to charge by the hour or the page/project is this: If you charge $3 per manuscript page, you need to edit a little more than 8 pages an hour to meet the $25 EHR. If you can edit 10 pages an hour, your EHR will equal $30, which is $5 more than needed. As time passes and that extra $5 adds up, you build a cushion for those times when you have no work, a cushion that may still allow you to maintain the EHR of $25 over the course of the year.

And don’t forget this: The $25 EHR is based on your generating enough work to bill for 20 hours a week on average. Thus, to meet your goal, you need to copyedit approximately 167 pages a week. (A cautionary note: Remember that all of these example calculations are based on our net EHR but that our net EHR is incomplete. You must do your own calculations based on your own business.)

Option 4 is, in my thinking, the best option because, as many freelancers have noted, publishers generally do not offer rates above $25 an hour, and authors aren’t knocking down doors in a scramble to pay editors $50 an hour. Most publishers offer a rate between $18 and $25 an hour; some publishers, to their discredit, I think, offer rates of $12 or less an hour. In addition, we are competing worldwide with editors who do not calculate their EHR needs and will accept work at any price offered. Consequently, the best way to charge is a per-page or project-fee rate because you can compete effectively yet increase your productivity and efficiency and thus raise your EHR to a sum much higher than the offered hourly rates — in other words, by becoming more efficient and speedy, you can make a $20 hourly rate (when converted from a per-page rate) an EHR of $50.

Which brings us to the next matter: calculating a page. There are lots of ways to calculate a page. One of the most common formulas is 250 words = 1 page. But there are other formulas, such as counting characters. It really doesn’t matter what you decide equals one page; what does matter is that you have a definition, that you make it known to clients, and that you apply it before quoting a price.

Regardless of how you ultimately decide to charge — whether by the hour, the page, the word, or the project — it is important to be able to calculate the number of pages because for most people, the number of pages has meaning as a measure. In addition, editors think in terms of how many pages they can edit in an hour, not how many words they can edit in an hour.

In a recent online discussion, someone was looking for an editor to edit a 248,000-word manuscript that they said equaled 450 pages. Before bidding on such a project, you need to have a standard definition of what constitutes a page so that you can rationally determine what to bid. In this instance, the author calculated a page as 550 words, more than double the commonly used 250 words. Were I to bid on this project, I would bid as if the page count were 992 pages, not 450. One page equaling 550 words is not within my lexicon.

If I placed a bid based on the 992-page count, I would be prepared to explain what constitutes a page and how I calculated the manuscript’s true (for editing) size. This count is important to me because I have a pretty good idea of how many pages I can edit in an hour. That number is a range that covers badly written manuscripts through well-written manuscripts. Knowing the correct number of pages by my definition of what constitutes a page and knowing how many of those pages I can edit, on average, in an hour, lets me knowledgeably decide if I can undertake the project and how much I need to charge.

If the author insists that the correct page count is 450, my response would be that it doesn’t matter — this is my bid price for the manuscript as described, whether we call it 450 pages or 992 pages. What matters is that I have a definition for a page that I apply when calculating my fee.

This is important because I charge by the page, not by the hour. I have a high EHR that I want to meet and a key to knowing whether I can meet that EHR is knowing how many pages I can expect to edit in an hour. The more pages I can edit, the higher my EHR.

In contrast, if I charged by the hour, aside from the fact that my true EHR would be significantly lower than my hourly rate, it wouldn’t matter how many pages I could edit in an hour. I am being paid by time, not by productivity — and I will not be rewarded for being efficient or productive; in fact, I will be punished if I am efficient and productive because I will earn less (in gross) on the project. When I charge by the page (or by the project), I am rewarded when I am efficient and productive.

Every time I exceed my required EHR, I am given a bonus. In contrast, if I charge by the hour I can never exceed my required EHR (and usually cannot meet it), thus I can never receive a bonus.

I know the concept of EHR can be confusing, maybe even daunting, but combined with a firm definition of what constitutes one manuscript page, it is really the best way to determine what you should be charging.

In Business of Editing: What to Charge (Part III), we will discuss tracking the EHR.

Richard Adin, An American Editor

June 14, 2017

From the Archives: What to Charge (Part I)

(The following essay was originally published on
An American Editor on August 5, 2013.)

One problem with editing as a profession is that it is easy to set one’s self up as an editor. The result is that every day brings new editors into competition with existing editors. And every day the question gets asked: “What should I charge?”

The first response to that question, at least in the United States, is to take a look at the EFA (Editorial Freelancers Association) list of editorial rates. It does no harm to look at the rate schedule, as long as you recognize the failings of the schedule and do not rely on it for setting your rates.

The EFA schedule of rates is based on surveys of EFA members. Consequently, the survey excludes data from the many thousands of nonmembers. More importantly, the portion of the membership that responds to the survey is just a small fraction of the EFA membership, which itself is but a miniscule fraction of the universe of editorial freelancers. There are other biases in the survey as well.

The EFA schedule is also problematic because it fails to define its terms. For example, what does “basic copyediting” include/exclude that distinguishes it from “heavy copyediting?” What justifies the range difference? Suppose the copyediting were “medium.” How does that differ from “heavy” or “basic?” (For a discussion of light, medium, and heavy and their real-world relationship to editing, see The Business of Editing: Light, Medium, or Heavy?)

Bottom line is that the EFA schedule of rates is a place to begin but not to stop. It should be reviewed then discarded.

A problem with the query about what to charge is that the asker believes in a false assumption — that there is a “going rate.” There really isn’t a going rate in editing. It is true that many publishers pay similar fees for work, but if you look at what work is required, you will see that there is a great variance among publishers. In the case of authors, there is no rate similarity that is author imposed. Authors deal with editors on a one-to-one basis, and negotiate rate one-to-one. Publishers, in contrast, deal with many editors simultaneously and thus have company-established pay guidelines that they impose.

Although there is no “going rate” per se, it could be argued that there is a de facto one because Publisher A will offer pretty much the same as Publisher B by way of compensation; only the amount of work demanded (i.e., services required for that pay) varies — and should be carefully looked at and incorporated into your determination of what to charge.

Ultimately, any “going rate” has little meaning in the absence of it meeting your needs, which is the crux of the issue of what to charge.

The most important factor in setting a rate is knowing what your effective hourly rate (EHR) has to be in order for you to make the income you need. We have discussed the EHR several times. The original discussion and explanation is found in Thinking About Money: What Freelancers Need to Understand. That article covered the surface of the EHR.

The EHR gives you a better picture of what you are really earning. For example, if you charge $30 an hour but are able to charge and receive payment for only 20 hours of a 40-hour workweek, your “gross” EHR is $15 not $30. You need to account for all of the hours in a workweek. The gross EHR isn’t a “true” EHR because it accounts only for hours, but it is better than blindly choosing a number that sounds good or matches the rate of some other editor whose circumstances and needs are likely to be different than yours.

The true EHR also accounts for expenses incurred by your business. For example, if you work from your home and pay $500 a month in utilities, you might attribute $250 a month to your freelance work. That works out to $57.70 a week (or $1.44/hour) in utilities expense that you “would not otherwise incur” if you were working outside the home and for someone else who supplied the utilities during the workweek. (Even if your utilities bill would not be lowered by your working outside the home, some portion of the utility cost is attributable to your working from home.)

Utilities are but one of the expenses that are attributable to your freelance business. Health insurance is another, especially if you had employer-paid health insurance before pursuing your freelance career. The point is that you need to identify all your freelance-related expenses and add them to the mix to determine what to charge.

Let’s pursue the example of a true EHR using an hourly rate of $30. If you charge $30/hour for copyediting (however you define copyediting) and have billable work for 20 hours, your gross EHR = $15 an hour, which is calculated this way:

$30 per hour × 20 billable hours in 1 week = $600
$600 ÷ 40 hours (standard workweek) = $15 EHR

Now that we know the gross EHR, we need to fine-tune it to determine the “true” EHR. Consequently, from the gross EHR subtract the cost of utilities, as follows:

$15 (gross EHR) − $1.44 (freelance portion of utilities per hour) = $13.56 (“true” EHR)

We are only using utilities as a cost here, but the deduction from the gross EHR would be the freelance portion of all expenses of maintaining your business, broken down into its hourly value, such as the appropriate portion of health insurance, other required insurance(s), telephone and Internet service, rent or mortgage, hardware and software, etc. In other words, the $13.56 in the example is still high.

Once you have figured out your EHR, you need to determine your target gross yearly income. In reality, you will pick a number that you would like to earn and see if it is feasible.

Let’s assume that your target gross income for a year is $50,000. That equates to a gross of weekly income of $961.54 (based on a 52-week year), which equates to a minimum EHR of $24.04 (based on a standard 40-hour workweek). Is the $30/hour rate you charge sufficient to generate your desired annual gross income based on your EHR?

The answer and more in Business of Editing: What to Charge (Part II).

Richard Adin, An American Editor

July 13, 2015

The Keys to High-Quality Editing

The one thing every professional editor strives to produce is a high-quality edit. This is more difficult today than it was 30 years ago; client demands have made production of high-quality editing increasingly difficult.

Yet there are “keys” to producing high-quality editing.

Accept or reject a project

The keys begin with the decision whether to take on a particular project. A few days ago, I turned on my computer to find five job offers waiting for me. I only accepted one. The one I accepted came with much less onerous demands than the others, which means that I will be able to provide a high-quality edit.

The job I accepted asked me to suggest a schedule based on what the client wanted and the manuscript needed; the others gave me a fixed schedule. After reviewing the manuscript for the accepted job, I suggested that a nine-week schedule was reasonable. The other jobs were for much shorter manuscripts but still required at least a two-week and more likely a three-week schedule; the schedule on offer was one week with no flexibility.

However, there were still problems that had to be addressed with what ultimately became the accepted job. For example, the references and how they were to be formatted. The author used what is for me a rarely seen style for the references: American Chemical Society style. If the manuscript had a handful of references, changing them to Harvard style would not be a problem, but the manuscript has a lot of references and there are a lot of stylistic differences between Harvard and ACS. The client wants the manuscript sooner rather than later, and so it was decided that because the author was consistent, we would use ACS style for the references.

In contrast, a couple of the manuscripts that I rejected didn’t have a single reference style, but the predominant style would have required many hours of work to restyle to conform to the client’s style. Yet the client was unwilling to compromise.

The keys to high-quality editing begin with the decision whether to take on a project or not. Many editors are simply thankful to be offered work and accept jobs without vetting them. This approach leads to a low effective hourly rate and questionable editing quality because it can be a struggle to meet short schedules — especially if the manuscript is not well written.

Effective hourly rate

Another key is ensuring that a project leads to a decent effective hourly rate and a profit. I have noted over the years that many colleagues take on a new project expecting it to go smoothly only to find that it does not. And when it does not, they are faced with the dilemma of ensuring a decent effective hourly rate versus the high quality of editing they prefer to provide. This is the eternal struggle — what to do when the compensation is inadequate.

Of course, it is difficult to know in advance, even if you sample a manuscript, how easy or hard a manuscript will be to edit. But there are certain things one can look for as clues. I have found that authors who very inconsistent and sloppy with references are often the same with the main text, which means more editing work. I have also found that if I see a lot of Word’s squiggly red lines, which indicate possible misspellings, that a manuscript may be problematic. In this case, however, because much of what I edit is medical, I recognize that the built-in spellchecker will mischaracterize a word, indicating it is misspelled when it isn’t. This clue requires familiarity with the subject matter.

Subject-matter familiarity

Which brings us to yet another key: knowledge of the subject matter. It is not that the editor needs to be an expert in the subject matter, it is that the editor needs to be comfortable with the subject matter. In my case, for example, I stopped editing fiction after about 6 months of editing — more than 31 years ago. I stopped for several reasons, including to provide a high-quality edit I had to be able to keep a sharp focus on the novel’s text. What I found was that when faced with a poorly written manuscript, my focus would begin drifting and I would have to reread the same paragraphs perhaps multiple times. I also discovered that for me, nonfiction was both more interesting and more profitable.

Fiction editing is difficult because it requires familiarity with a wide range of topics that I am not normally either interested in nor familiar with. I have never been particularly interested, for example, whether Bucharest’s weather is closer to that of London or New York City, but that could bin important in a novel whose action takes place in Bucharest. As a fiction editor, it was my responsibility to know whether or not the author’s description of Bucharest was plausible (actually, accurate). My fiction reading has always been limited; I tend to read vast amounts of nonfiction. Consequently, I was better “educated” about things that the nonfiction I was editing was concerned with than the fiction editing needed.

Pattern recognition

The ability to recognize writing patterns is another key. Every author has a writing pattern and in a group of collaborating authors, one pattern dominates. Identifying early in the editing process this pattern leads to greater consistency and accuracy in editing, which can lead to higher-quality editing. When you can identify these patterns, you can take advantage of tools such as EditTools. These types of tools, if properly used, lead to higher-quality editing.

Resources

The final key to be discussed in this essay is resources. Having the right resources available is important. For example, knowing that Garner’s Modern American Usage is the leading usage guide for American English is not enough; you need to have it available. Similarly, being told to follow a particular style manual by the client is of little use is you are not familiar with it and have it readily available. It does no good for a client to ask you to follow AMA style if the only style guide you can access and are familiar with is Chicago.

It should be clear that many things go into producing a high-quality edit; consequently, a lot of things need to come together. Yet an editor’s skill is not just objective things such as available resources; the skillset an editor needs to meet client limitations and still produce high-quality editing is sharpened over years of education and editing. Knowing one’s current limitations is an important part of providing high-quality editing. The professional editor works diligently to minimize those limitations, and one way to do so is to knowingly evaluate an offered job by the keys to high-quality editing.

What do you think?

Rich Adin, An American Editor

April 29, 2015

So, How Much Am I Worth?

I recently wrote about rate charts and how I think it is a disservice to professional editors for an organization like the Editorial Freelancers Association (EFA) to publish such charts publicly (see “Business of Editing: The Quest for Rate Charts“). That got me wondering: How much am I worth as an editor?

In my essay, “The Makings of an Unprofessional Editor,” I discussed inflexibility as a key sign of an unprofessional editor. That essay, combined with the rate charts essay, got me wondering: If I am inflexible about my fees, am I on the road to unprofessionalism?

Why the sudden philosophical thinking? This morning (i.e., Saturday morning my designated/scheduled time to write my AAE essay) I had planned to write on a different topic, one I was struggling with, when my e-mail box started chiming — ding! ding! ding! ding! ding! — alerting me to five incoming emails. I glanced over to my inbox and there they were: five offers for (relatively) small editing jobs (range: 700 to 1500 manuscript pages).

(Those are small jobs for me. This past week, for example, I began working on a chapter that runs nearly 500 manuscript pages and has 1,827 references — not a single one of which was in the correct format/style for this book. [The book has more than 130 chapters.] That’s 219 pages of incorrect references. EditTools came to the rescue. The Wildcard macro let me reformat the author names and the cite information [year, volume, pages] in less than 15 minutes [see “The Business of Editing: Wildcarding for Dollars“]; the Journals macro took a bit longer, a little more than 3 hours, to correct all but a handful of references [see “The Business of Editing: Journals, References, & Dollars“]. The Journals macro took so long because the dataset contains more than 78,000 entries. I guesstimate that the two macros saved me about 25 hours of drudgery of removing periods from author names, reversing author names, etc.)

Each of the five jobs had problems. One, for example, was authored by a group of scientists who are not native English speakers/writers and it required a 14-day turnaround. Another required reformatting of hundreds of references in a 10-day schedule. A third required a “light” edit but had a 23-day schedule. And so it went.

The question I needed to answer for each project was: How much am I worth as an editor? (I can make the calculation because I know what my required effective hourly rate is. Not knowing that would make any calculation nothing more than a wild guess. To calculate your required effective hourly rate, see the “What to Charge” series.) Once I answered that question, I had to decide whether there was any flexibility in my worth. In other words, if I quote the client $5 per manuscript page and the client counters with $2 per page, do I stand firm or do I negotiate down? That’s really the rub, the “down.”

If I have decided I am worth $5 per page, but am willing to negotiate down to $3, am I really worth $5? Was I ever worth $5 if I am willing to accept $3. Of course, this is project specific because for one project I may only be worth $3 whereas for another project I may well be worth $5, but that doesn’t really distract from the idea that if I ask for $5 on a particular project and negotiate down to $3, perhaps I was never worth the $5 I originally asked for.

Some would respond that you are worth whatever the market will bear and you will accept, an amount that can change daily or even hourly. But that makes me a commodity, which is the effect of bidding. Besides, how smart is it to bid against one’s self, which is the problem with websites that ask you to bid on editing work. Do I really want to be seen as a commodity?

If I remain firm on my price — telling the client this is my nonnegotiable price for editing project X — does that move me down the road toward unprofessionalism? Or is unprofessionalism limited to editing, excluding pricing? Does price firmness send a message? If it does, is it a meaningful message in the sense that it will be recognized by the recipient and affect the recipient’s behavior?

In the end, I think firm pricing is the sign of professionalism rather than unprofessionalism. Editors fool themselves when they believe that negotiating downward has any positive side for them; it certainly does have a positive side for the client, but not for the editor.

If I was worth $5 a page initially, I will never be worth less than $5. My price reflects the demands of the client, my required effective hourly rate, my experience, my expertise, my skills. None of those things change downward between the time I give my price and the time of the client’s counteroffer.

So, how much am I worth as an editor? The answer depends on who is giving the answer. To the client whose book I helped transform into a gazillion-copy bestseller, I may be worth $200 an hour. To the packager who is used to hiring local editors for 50 cents an hour, I may be worth no more than $10 an hour. But none of these valuations matter if I haven’t a sense of what I am worth as an editor and if I don’t stand firm on that worth. I am always willing to charge more; I am  never willing to charge less.

Professional editors are able to provide professional-level service because they are adequately compensated. They earn enough that they can afford to occasionally not earn enough on a project. Adequate compensation ensures that the editor has the time to think and review; there is no need to speed up the editing process so that the editor can make room for the next project in hopes that the next project will mean better compensation.

Inadequate compensation is part of the problem of unprofessionalism. No matter how you slice the earnings pie, you still need to earn the whole pie to pay your living costs. The thinner the slices, the more of them you need to create a whole pie — the lower you see your worth, the lower you are willing to negotiate, the more projects you need to squeeze into the set amount of editing time to create the “whole pie.”

Lower worth also means less ability to say no, to turn work and clients away, which means less control over your own business. People give the advice that you should have so many months of savings so that you can manage through a dry spell or have the ability to say no to a project/client you don’t want. That is good advice, but only half of the advice needed. The other half is that you need to know your worth and not bid against yourself.

If a client’s only concern is cost, then the client is not really looking for skilled editing; the client is looking for the ability to say the project was edited, regardless of editing quality. There is often a penalty to pay for approaching a skilled craft like editing with that view. Of course, the benefit to me is that my worth goes up when I have to reedit poorly edited material.

Ultimately, the keys to the answer to the question “So, how much am I worth as an editor?” are these: knowing your required effective hourly rate; ignoring rate charts that provide no link to reality (because they fail to disclose the underlying data and/or fail to define terms) and that act as a brake on your earning ability; and refusing to bid against yourself by standing firm on your price (which assumes that you have an articulable basis for your price). This is a sign of a professional and successful editor.

What do you think?

Richard Adin, An American Editor

Related An American Editor essays:

January 7, 2015

The Business of Editing: Discounting Rates

It has been asked: Is discounting your rate ever justified? The answer is “yes, but not usually.” We have all been faced with the dilemma: Should we offer a discount in order to get the job? Or because the potential client is a student? Or [fill in the blank]? The answer is not easy. I begin where I always begin when it comes to rates — with the effective hourly rate (EHR). Discounting a rate is like setting a rate in that you must first know how much you have to earn to keep yourself afloat. It is neither very smart nor does you any good to earn less than your required EHR.

Many years ago I would have said that it is better to have some income than no income. That was in my days of not applying business practices to my business and not realizing the potential of my business. The truth is that it is not better to have some income than no income. It is only better if that income meets your required EHR. Note that I am speaking of required, not desired, EHR. I learned quickly that rather than take on work that was below my required EHR I was better served spending my time marketing myself, trying to find work that would meet my required EHR. This is also true when it comes to discounting my rate.

I never discount to a rate that is below my required EHR; I want to be able to pay my bills, which is something I will not be able to do if I do not meet my required EHR. There are several factors at play. First, before discounting my rate, I need to be earning overall more than my required EHR, and preferably close to my desired EHR. It is that difference — the difference between my earned EHR and my required EHR — that is the negotiable area.

Second, the client needs to be a repeating client. It does me no good financially to provide a discount to a one-off client, even if I think that client will tell friends and neighbors how great I am. The reason is that the one-off client will also tell friends and neighbors what he paid and the friends and neighbors will be expecting a similar discount. For repeat clients, especially institutional clients, I am willing to consider a discount because I know I can make up for the loss on the particular project on future projects or because it is worth my while to charge a little less in exchange for a larger volume of work. Which brings me to the third point.

Third, volume discounting is reasonable as long as the discount does not go below my required EHR. In the case of a volume client, I always keep in mind my Rule of Three (see “The Business of Editing: The Rule of Three“) as it will do me no particular good to have a lot of business that I am losing money on. But volume clients are what I want because such clients assure me year-round profitable work. In a sense we have gone full circle. Discounting one’s rate is acceptable in the circumstance that doing so does not bring the rate below one’s required EHR.

Where most of us part ways is with the other requirements. Usually the argument is that

  • it is a new subject area for me that I want to explore
  • the client is poor
  • the subject matter of the project is one that I am very interested in

and other similar “reasons.”

The first question to ask yourself is this: Are you a business or a charity? If you are a charity, then these reasons have some merit; if you are a business, these reasons have no merit. As a business, you need to earn enough to stay in business and even to earn a profit. Why remain in a business that cannot provide income sufficient for your needs?

The second question to ask yourself is this: If I undertake this project, will it preclude me from taking on a higher-paying project? If it will, then it should be avoided. Why take on a project that costs you both money and opportunity?

The third question to ask yourself is this: If I take on this project will I have the time and money and energy to market myself to better-paying potential clients? If no, then don’t take on this discounted project. Discounting is fine when you are in a position to do so, when your business is such that whatever loss you will take can be made up for. It is also fine when it is connected to volume. But under no circumstance is it fine to discount below your required EHR, which means you must have calculated your required EHR beforehand. (To calculate your required EHR, see the five-part series “Business of Editing: What to Charge.”)

One thing we haven’t considered is the worth/value of your editing. I consider myself a highly skilled professional. My services can make a difference. How valuable are those services? The more valuable they are, the less willingly they should be discounted. I differentiate my services by the price I charge and the quality I provide; discounting takes away that differentiation. And it becomes a slippery slope: If I discounted today, why not tomorrow? The consumer will neither understand nor accept the fine differences we use to distinguish among projects and clients; if my price was $x yesterday, the consumer expects it to be $x today and on both days expects high-quality service.

Are there times you can discount? Yes. Are there times when you should discount? Yes. The way your  recognize those times begins with knowing your required EHR and evaluating whether giving the discount will further a legitimate business interest. In the absence of either, no discounting should be given, and under no circumstance should a discount result in an EHR below your required EHR.

Richard Adin, An American Editor

Next Page »

Blog at WordPress.com.

%d bloggers like this: