The Business of Editing: Effective and Efficient Ways to Think, Work, and Prosper by Adin Richard

Author:Adin, Richard [Adin, Richard]
Language: eng
Format: epub
Publisher: Waking Lion Press
Published: 2013-11-23T16:00:00+00:00

Calculating the Workday Effective Hourly Rate (EHR)

The formula is essentially the same if you charge by the page or by the project. Here is the formula for a per-page rate:

What this requires is that you keep track of your time—both working and non-work–related (e.g., time spent on administrative tasks, as well as on making tea or walking the dog)—during your set business hours. Here is an example of a calculation made using an hourly rate:

Note how what was once $30 an hour has become significantly less. To have a true picture of what you are earning, you need to calculate your EHR over longer periods—1 month, 3 months, 6 months, 1 year. Only with that calculation in hand will you know what you are really earning. It is nice to think that we are earning $30 an hour, but we need to recognize that the $30-hour unit represents billable time and doesn’t include all of the non-billable time we spend each day, week, and month doing such things as prospecting for new work, filing, billing, replacing office supplies …and chatting with friends on Facebook, searching for a better source for pet food, and the like.

Why is this information important? Because knowing what you are truly earning can help you put your business in proper order. It can be the impetus to seeking more work or to spending less time doing nonproductive things.

Freelancers tend to kid themselves about their earnings. Even if we earn a decent income by the end of the year, we may have had to work much too hard to earn it, or perhaps we could have increased it significantly had we only worked smarter. Everything about our business flows out of knowing what our true EHR is over an extended period of time.

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