One of the most common discussions we have as ghostwriters has to do with how to figure out what to charge for ghostwriting services. What’s fair? What’s the going rate? How should I structure payments?
These are the frequently-asked questions.
And the best answer is to quote and structure payments in the simplest way possible for the client at a rate that is profitable for you.
Give them a Number
When a client asks how much it will cost to have their book ghostwritten, they want a number. That way, they can determine if their budget is large enough to cover your fee or not.
That’s their main concern.
How, exactly, you came up with that number is not as big a deal to them, honestly. They may be curious about your thought process or calculations, but they don’t need to know the intricate details. And they probably don’t expect you to break down your cost estimate in excruciating detail.
Even if they do expect it, don’t provide it. Or don’t share your calculations and considerations with them. Don’t give them room to ask you to justify why you estimate one type of task will take 30 hours and something else 16. Giving tons of detail only opens the door to attempted negotiation on those points, which only complicates the process and your fee.
Instead, keep it as simple as possible in order to ensure your work is profitable.
Before you quote a number, however, you should run through some multiplication and division.
The three general ways to calculate a fee are: per-hour, per-word, and per project. (The Editorial Freelancers Association (EFA) has a rate sheet that does not include ghostwriting, and which I think is low, but you might check out as one reference point.)
Quoting a ghostwriting project based on an hourly rate can be smart if you don’t know how long a task will take. By billing based on actual time spent on the work, you’re assured of being paid for all of the time you invest, which is good.
However, if you are a fast writer, you will likely earn less than you could have if you used other methods of quoting.
Before you go quoting on an hourly basis, make sure your hourly ghostwriting rate is significant enough to cover all of your expenses, taxes, and profit. My personal opinion is that ghostwriters should be charging at least $50/hour. At least.
But even if you don’t provide price quotes based on an hourly rate, you should determine your own hourly rate to be used in calculating fees, and use that as a reference point.
Another approach to quoting ghostwriting work is on a per-word basis. The advantage of quoting a ghostwriting project based on a set per-word fee is that the math is easy. For example, a 40,000-word book at $1/word is $40,000.
Per-word quoting is advantageous because the more words you produce, the more you earn. (How much time it took you is not part of the equation as far as your client is concerned.)
The only potential problem with a per-word rate comes in with respect to editing and scope creep. You can draft a magnificent article, let’s say, but the client may decide that editing is required. And that’s work you’re not being paid extra to do, whereas when you’re working per-hour, you likely don’t care how many rounds of revisions the client wants, since you’re being paid.
That’s the downside of quoting per-word.
It’s often useful to calculate a ghostwriting project both based on your standard hourly rate and compare that to the per-word rate, to see if you can make money.
For example, if you’ve been asked to write a 15,000-word ebook that you think will take 60 hours to draft, compare your two calculations.
If you bill on an hourly basis and your hourly rate is $75, the corresponding rate should be $4,500.
And if you quoted on a per-word rate of, say, $.50/word, your quote should be $7,500.
Only you can decide which approach to take, but you want to try to confirm that you will at least earn your standard hourly rate for the work. In this case, you would, though the per-word rate might be more advantageous.
Comparing the two rates is important because it can let you know when a project could be profitable and when it would not.
Let’s look at a different project where, for example, you’re being offered $.25/word to write a 1,500-word thought leadership piece. That’s a potential fee of $375.
That might sound too low for the work to be done, so you run an hourly calculation. You suspect that it will take 8 hours, since there is only one interview to be done. What would your hourly rate be for that assignment? Only $46 and change. Since your standard (or minimum required) hourly rate is $75, you know this is not a profitable assignment for you.
Of course, you can still decide to take the assignment if you’re looking for more work, or you can try to negotiate the per-word rate up. Or you can decline it. But at least you have a better sense of whether it’s a profitable project for you.
Another potential way to quote work is using a per-project fee, also called a “flat fee.” Clients tend to like this approach because they know what their bill will be from the outset. Sure, you may use your hourly rate and your own calculations of how long you think the work will take to come up with that project fee, but the client does not see those behind-the-scenes numbers.
The advantage of a per-project fee to you is that if you can get the work done in less time, you earn a higher profit. As you become more experienced, this likelihood becomes much greater.
The disadvantage with flat fees occurs with scope creep, or when the client adds in small tasks for you to address that you hadn’t counted on. Maybe an interview you hadn’t anticipated, or another round of edits, or comments from your client’s spouse. Those extra hours add up, and other than pointing back to your agreement that outlines the scope of work, it can be difficult to decline the work without causing irritation on the part of your client.
However, most ghostwriters lean towards quoting on a project basis and then break that larger fee into interim payments based on milestones. That is, when you submit 25% of the book, for example, you get a payment. When you submit 50% of the book, you get another payment, and so on.
Keep Value in Mind
When it comes to calculating your hourly rate, your per-word rate, or your project rate, you need to start with your expenses so that you can be assured that you’re earning enough to keep a roof over your head. But an even bigger factor is how much value you’re providing your client—that should inform what you ask them to pay.
Value-based pricing is why a ghostwriter working on his first project will earn less than a ghost who is working on her 50th. The years of experience and success have driven that price up.
So don’t talk yourself out of increasing your rates if you’ve been doing this for a few years. Clients benefit from the short-cuts you’ve figured out, the process you’ve honed, and the pitfalls you’re going to help them avoid.
Which means that as long as you’ve confirmed you will cover your basic expenses, ask for more. And then ask for even more the next time.
Because you’re worth it.