It’s All About the Benjamins! EditTools’ Time Tracker (Part I)

By Richard Adin

In the early years of my freelance editing career, I joined the EFA (Editorial Freelancers Association) as a way to “meet,” via its chat list, other freelance editors. One thing that struck me was how united — except for me and a very few others — EFA members were in their approach to the business of editing. We outliers viewed our chosen career as a business, while most of our colleagues viewed what they did as more like art; that is, they paid as little attention as possible to the business side of freelancing and as much as possible to the skill (editorial) side.

There were many discussions about financial struggles, poor pay, added tasks, multiple passes, and the like. There were few discussions (and very few discussants) regarding advertising, promotion, business practices, calculating what to charge, negotiating — any of the business-side skills. And when business-oriented discussions did start, they often ended quickly because colleagues piled on about how craft was so much more important than something as pedestrian as business and money.

As I said, I was an outlier. For me, it was about the Benjamins (the money). Freelancing was my full-time job — my only source of income. I had a mortgage to pay and two children to feed, clothe, keep healthy, and school. I had no trust fund or wealthy relative who couldn’t wait to send me money on a regular basis. Although how well I edited was very important to both myself and my clients, the money was equally important to me.

I recognized from the start that if I didn’t pay close attention to the business side of freelancing, my family and I would be in trouble. When my son needed $5,000 worth of dental work, it was my job to make sure he got it. It was not my job to tell the dentist, “Sorry, but I am an artisan without sufficient income to pay for your services.” When it came time for college, it was my job to try to get my children through with minimal or no debt for them to deal with upon graduation. And this doesn’t even address such things as providing for my retirement or providing health insurance and auto insurance and the myriad other things that are part of modern life.

In other words, for me, it was all about the Benjamins in the sense that my editorial work could not be viewed through rose-colored glasses as if the only thing that mattered was artisanship.

Which brings me to the point of this essay: EditTools 9 and the project management macros that are part of the just-released EditTools 9 (www.wordsnSync.com).

In Business, Data Drive Success

What seems a lifetime ago, I wrote a series of essays for An American Editor about calculating pricing and why it is important not to look at rate surveys or ask colleagues for guidance (see, for example, the five-part essay “What to Charge,” beginning with Part I, and “The Quest for Rate Charts.” ) Yet, when I go to chat lists like Copyediting-l, it is not unusual to find colleagues asking “What should I charge?” or “What is the going rate?” Nor is it unusual to see a multitude of responses, not one of which is really informative or meaningful for the person who asked the question.

When I meet or speak with colleagues and these questions come up, I usually ask if they have read my essays (some yes, some no) and have ever actually gathered the data from their own experiences and used that data to calculate their personal required Effective Hourly Rate (rEHR) and their actual EHR, both for a project and over the course of many projects. Nearly universally, the answer to the latter questions (about data collection, rEHR, and EHR) is “no.” Why? Because “it is too much effort” or “the XYZ rate chart says to charge X amount” or “I can’t charge more than the going rate.”

But here are the problems: If you don’t collect the data,

• you can’t determine what you are actually earning (as opposed to what you are charging; you can be charging $3 per page but actually earning $45 per hour, or you can be charging $5 per page but actually earning $9.25 per hour);
• you can’t know what is the best way to charge to maximize your EHR for the kind of projects you do;
• you can’t determine whether some types of work are more profitable for you than other types; and
• you can’t easily determine what to bid/quote when asked for a bid/quote for a new project.

Ultimately, if you don’t know your rEHR, you don’t know if you are making money or losing money because you have nothing to compare your EHR against.

It is also important to remember that there are basically two ways to charge: by the hour or not by the hour (per word, per page, per project). Although many editors like to charge by the hour, that is the worst choice because whatever hourly rate you set, that is the most you can earn. In addition, it is not unusual to start a project and suddenly find that it is taking you less time — or more — to work than originally expected. If you charge by the hour and it takes less time than originally thought, you lose some of the revenue you were expecting to earn; if it takes more time, and assuming nothing has changed, such as the client making additional demands, you run up against the client’s budget. I have yet to meet a client with an unlimited budget and who doesn’t rebel against the idea that you quoted 100 hours of work but now say it will take 150 hours and expect the client to pay for the additional 50 hours.

However, to charge by something other than the hour requires past data so you can have some certainty, based on that past experience, that you can earn at least your rEHR and preferably a much-higher EHR. The way it works is this:

If you charge $3 per page for a 500-page project, you know you will be paid $1,500. If your rEHR is $30, you also know that you have to complete the job in no more than 50 hours. If you can complete the job in 40 hours, the client still pays $1,500 because the fee is not tied to the time spent but to the page count, and your EHR is $37.50. If you were charging by the hour and charged your rEHR of $30, you would be paid $1,200 — a $300 revenue loss.

All of this is based on knowing your data. During my years as a freelancer, I accumulated reams of data. The data were not always well-organized or easy to access until I got smarter about how track the information, but it was always valuable. Within months of first collecting data, I learned some valuable things about my business. I learned, among many other things, that for me (I emphasize that this applies solely to me and my experience):

• medical textbooks earned a higher EHR than any other type of project;
• charging by the page was better than charging hourly;
• calculating a page by number of characters rather than words was better;
• high-page-count projects that took months to complete were better than low-page-count projects (I rarely edited books of fewer than 3,000 manuscript pages and usually edited texts ranging between 5,000 and 7,500 manuscript pages; I often edited books that ran between 15,000 and 20,000+ manuscript pages);
• working directly with an author was highly problematic and to be avoided;
• limiting my services to copyediting was best (I phased out proofreading and other services);
• working only with clients who would meet my payment schedule was best;
• saying no, even to a regular, long-time client, was better for business than saying yes and not doing a topnotch job because I hated the work.

I also learned that investing in my business, such as spending many thousands of dollars to create and improve EditTools, paid dividends over the long term (the more-important term).

And I learned a lesson that many editors don’t want to accept: that sometimes you lose money on a project, but that is no reason not to try again. Too many editors have told me that when they have charged by a non-hourly method, they lost money, so they returned to hourly charging. How they know they lost money, I do not know, because they had no idea what their rEHR was, but their assumption was that if they earned less than they would have had they charged by the hour, they lost money. This is not only incorrect thinking, it is short-term thinking.

Such decisions have to be made based on data. Because collecting and analyzing accurate data is a stumbling block for many editors, EditTools 9 includes the Time Tracker project management macro, discussion of which will begin in Part 2 of this essay.

Richard (Rich) Adin is the founder of the An American Editor blog, author of The Business of Editing, owner of wordsnSync, and creator/owner of EditTools.

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Business of Editing: Solopreneur or “Company” (III)

In the prior two articles on this topic (see Part I and Part II), the discussion centered around the what (what it means to be a solopreneur or a company). As one commenter pointed out, the reality is that even a solopreneur is a “company” with the solopreneur being an employee of that company. But the difference for our discussion lies less in the taxing authority definitions than in commonly understood definitions.

What was missing from the earlier discussions and needs to be addressed is what the future looks like. I’ve written on this topic before (see, e.g., Does the Future of Editing Lie in Tiers?, The Future of Editing: Group Sourcing?, and Is There a Future in Editing?), but our discussion of solopreneur versus company prompts me to write again.

To see our future as editors in the context of solopreneurs versus company, we need look no farther than the changes that have come about in the legal and medical professions. Professions like plumbing are not good comparisons because both the worker and the work have to be local; it would be pretty difficult to hire a plumber located in San Francisco to fix a leaking faucet in an apartment in Los Angeles, much less one in New York or Bangladesh. But the limitation faced by the plumber, and at one time thought also to apply to doctors and lawyers, doesn’t apply to doctors and lawyers in the global economy. It certainly doesn’t apply to editors.

True there is still a “thriving” solopreneur approach to law and medicine, but if you watch the trends, you will discover that, whereas 90% of doctors and lawyers were once solopreneurs, today that number is rapidly approaching less than 25% with no end in sight as to the decline.

That there will always be some solopreneurs is really just an excuse. What doctors and lawyers have discovered is that solopreneurship is generally not economically feasible. Back in the days when I practiced law, the movement was toward two-person offices. It wasn’t long before it was a movement toward three- to five-person offices, and the trend has continued. Globalization and insurance and lack of insurance have made the change happen.

The discussion of solopreneur versus company, when phrased in terms of personal preferences, ignores changing economics — it misses the foundational point of the discussion: survival in one’s chosen field; in our case, the field of editing. To choose between solopreneur and company, one needs to answer this question: Am I earning the net amount of money I want or need each year in my current form? If I am, then nothing more needs be discussed. But if I am not, then one of the several things that needs to be thought about is whether I am in the correct “form” to survive.

Another question that has to be asked and answered is this: Where do I fall on the bell curve of working life? For example, in my case, I am on the downslope side; although I continue to work, I am eligible to retire. Consequently, my approach to the solopreneur versus company question is different (or should be different) than that of someone on the upslope side. If I were on the upslope side and not making the income I wanted, I’d be looking at what changes I can make to get me the income I want.

I don’t disagree that it is important for an editor to be comfortable in his business model. What I do disagree with is the idea that one needs to sacrifice income for comfort. Each of us has our own strengths and weaknesses. Some of us are better editors than others; some are better businesspeople than others. Some are better editors than businesspeople and vice versa. The idea of collaboration — or a company — is to take advantage of the strengths of each of the people who collaborate (make up the company).

I understand the reasons for solopreneurship but I do not understand making it a god so that one clings to it even in the face of not making a sufficient income.

When it comes to professions that are reluctant to change, I think editing is one of the most reluctant. We tend to cling to what has worked because it has worked, even if it hasn’t worked for us or it once worked for us but no longer works for us. Many of us still edit as if we are editing using paper and pencil — even though we are editing using a computer. (I even know a few editors who still refuse to edit or proofread except on paper — and they have clients who agree!)

The Internet has brought a sea change to editing. Before the Internet, we knew our competition. With the Internet, our competition is anyone and everyone, and that competition has acted as a brake on pricing. The other sea change has been the number of people who want to become editors to supplement their income or because “it looks easy to do.” These “editors” also are a brake on the professional editor’s income.

When we think about solopreneur versus company, we need to think about these economic factors, how they affect us, and what model — taking into account our business skills and interests — will best serve to maximize our incomes and best be able to deal with the sea changes of the future. Just as lawyers and doctors have realized that, to correct the mismatch between their income expectations and income realities, they have had to move away from the solopreneur model, editors, too, may have to come to that realization.

It is not enough to say that there will always be a place for the solopreneur editor. Although true, it fails to account for the ease of entering the profession and the growing number of people who are competing for that same group of clients. It also fails to account for the growing globalization of editing.

The most important thing is not to be quickly dismissive of the company model. Your future may be at stake.