Walkaway Pricing: Charging for Your Creative Hours
Part five: Why you can't bill for eight hours a day
This is part five of my guide to working out the minimum you should charge as a freelancer or content creator. Please see my introductory post for more information and links to others in this series.
As freelancers and content creators, our whole careers are about exchanging time for money. The hours and effort that we put into creating beautiful work are compensated by our clients paying for that time. Understanding how much time we spend creating content is vital to working out our walkway pricing—the minimum rates that we need to charge to sustain ourselves and our businesses.
In my first post in this series, I mentioned that we can calculate our minimum content creation rates from two critical pieces of information:
The total amount of money that we spend to survive, run our businesses, and create a good standard of living.
The total amount of time that we can bill for when providing creative services to clients.
We've already covered the first point in some depth. My previous guides help us to calculate spending on everyday needs, the costs to run our businesses, and having enough disposable income to enjoy life. If you've not already gone through those guides, I recommend doing so before coming back to this one.
In this guide, we're going to look at the second part—exactly how much time do we have in a month that we can bill to our clients? Once we know that figure, we can combine it with our spending to figure out what our rates should be.
You probably can't bill for eight hours of creative work, every day
Many standard jobs are for seven or eight hours per day—your employer pays you for all of those hours, between 35 and 40 hours a week. So, doesn't it make sense that as a freelancer or content creator, that's how many hours you can bill to clients?
No—and there's a good reason for that: You're not spending all of those eight hours on producing creative work. And if you're not producing creative work, you probably can't bill for it.
There are several reasons that you'll bill fewer hours as a freelancer or content creator, compared to a full-time job:
Research tells us that most people can only manage between three and five hours of deep work each day. If you try and do any more than that, the quality of your work will suffer, and if you keep it up, you'll probably suffer from burnout.
In fact, if you look at most office jobs and knowledge workers, you'll find that most of them are only doing productive work for around half their time at work, even though they're getting paid for all the time they spend there.
You don't have that luxury as a self-employed content creator. Typically, a client will only pay you for the time you're actively working on their projects and content.
You will also need time in your working week to do the admin tasks in your own business—seeking out new work, sending invoices, marketing, bookkeeping, and all of your other overheads.
The upshot of all of this is that you won't be able to bill seven or eight hours a day to clients, as you won't be spending all of that time working for them.
Figuring out how much time you actually can bill to clients each day
Alright, so we know you can't charge for creating content for eight hours a day, but how much time can you charge? You have a few options to figure this out.
Option one: Track what you've said you will charge for in your contract
You should have a contract or Statement of Work in place with your client. This will define what you and your client have agreed you can charge for. Depending on your contract, that might include time you spend on:
Producing creative work
Research needed to complete the project
Meeting with your client and other stakeholders
Responding to emails, messages, and other communications
Other areas
If you don't have a contract in place, make some educated assumptions about what a client would realistically expect you to charge for.
Figuring out your contracted hours over a month
You can average out how much time you spend on contractual work over a week or a month. The easiest way to do this is to track your actual time on each contract using software like Toggl. Simply set up the software, start the timer when you begin doing client chargeable work (as defined in your contract), and stop it when you finish.
I suggest doing this over several weeks or a couple of months so that you get a good understanding of where you're spending your time. Total up all of the time you spend over that period, and divide it by the number of days you spent working. This will give you the average number of hours you charged per day.
Option two: Estimate your maximum creative hours in a day
This is a much simpler way to figure out your chargeable hours than tracking everything in your contracts—although it is less accurate. In this option, you simply decide how many hours you want to dedicate to creative work each day. But, there's reason for caution here:
This is a best guess, so it may not be that accurate. This can impact the rates calculation in a fairly significant way—assuming you can work six hours a day is very different to four hours—and will create wildly different minimum rates. It's best to be cautious when estimating your hours using this method.
Energy levels, the ability to concentrate, and how long you can spend on deep work vary widely from person to person. Additionally, distractions and other factors can also reduce the number of creative hours in a day.
I'd advise being cautious with your hours to begin with. That way, if you find you can actually do more work, and charge for more hours per day, it won't negatively impact the rates you set.
Figuring out your estimated hours over a month
I'd advise using between three and five hours as your chargeable, creative time in a day. I set my chargeable hours in a day at around five hours—that's about as long as I can spend on research and deep, creative work before I get tired and quality suffers. But, these hours can vary a lot depending on your personality, drive,m discipline, and lots of other factors.
Start by choosing something that feels right for you. Then, start recording how long you're actually spending on creative work and refine your figures. You can always use these updated numbers to calculate new rates.
Calculate the number of creative hours you can bill in a month
Use one of the above methods to calculate how many hours you can realistically bill per day. We can then figure out your total billable hours per month, which we'll use in our next guide to figure out your rates.
There are an average of around 22 working days per month through the year, but it's not as simple as multiplying your hours per day by 22. You'll also want to account for time off, public holidays, vacations, etc. If your country has ten public holidays a year that you don't want to work, that's equivalent to 21 days a month with no vacation.
Assuming you do want to take time off, this affects your billable days as follows:
No vacation in a year: 21 days a month
Two weeks off a year: 20 days a month
Three weeks off a year: 19.5 days a month
Four weeks off a year: 19 days a month
So, choose how much time you'd like to take off, and multiply the resulting days per month by your hours per day to get your monthly billable hours.
For example: In my case, I can work around five hours a day on deep, creative work. But, I also bill time to clients for areas like project management, meetings, communications, etc. Because of that, I can estimate my total billable hours per day at around six. Additionally, I take three weeks off a year. I multiply those six hours by 19.5 to calculate that I have 117 billable hours per month. That's the figure I would use to figure out my walkaway pricing.
Hopefully, you've now been able to work out your billable hours.
Thanks for sticking with me through this guide. In our next one, we bring everything together to work out what your walkaway rates should be. Until then!
Please note that I am not a qualified professional and I do not provide tax, legal, accounting, or similar advice. These guides are provided for informational purposes only. Always consult with a qualified professional on your unique circumstances.