How Can My Business Budget for Freelancers?

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Whether you’re looking to ramp up your written content creation or just need to allocate a workload too heavy for your existing in-house team, hiring a freelance writer can help. Freelancers are an especially valuable asset for businesses that don’t have the means to hire a full-time or part-time employee. However, the financial commitment for freelancers is different than that of an in-house staff — so it’s critical to budget accordingly.

In this blog post, you’ll find a guide to hiring freelancers, including:

    • The different types of freelance rates businesses can offer (and when to use each one).
    • The factors that can affect a freelancer’s rate.
    • Why that rate will change over time.

Financial factors in budgeting for freelancers

When figuring out how to budget for freelancers in business, here are the factors you’ll need to consider:

Type of rates

There are four primary types of freelance writing rates: by the hour, by the word or page, by the project, and a retainer fee. These different payment models are each suited for different types of work, so you’ll need to determine which rate best suits the scope of work and expectations you have for freelancers.

    • By the hour: This is the most common type of freelancer rate, especially in the United States. For budgeting purposes, it’s helpful to ask a prospective freelance writer an estimate of how long the project will take. However, keep in mind that estimates are just that and can quickly change if the assignment takes more time and research than they originally anticipated.
    • By the word or page: Paying by the word is common practice in journalism and creative writing. While this model is easy to budget for, remember that paying by the word does not always correlate to the time and effort put into the project. For example, while a freelance writer may be willing to be paid by the word for a 1,000-word article, they may not find it worthwhile for a 100-word advertisement. Additionally, less-reputable or less-skilled writers might add “fluff” — content that doesn’t add value — just to bring your piece up to word count.
    • By the project: Also known as a flat fee or fixed rate, paying by the project means exactly what its name implies. You pay the freelancer a predetermined amount for the work they deliver; the length of time spent on the project does not affect payment. Often, businesses find it easier to budget by the project, especially as hourly rates can quickly add up for projects that are longer than anticipated.
    • Retainer fee: If you anticipate the need for ongoing work, a retainer fee can help both parties budget and plan accordingly. A retainer agreement commits the freelance writer to complete a certain number of deliverables or hours each month, for which they’ll receive a fixed monthly payment. Businesses with a continuous and steady need for content, as well as freelance writers looking for stable income, often prefer this model. It also makes it easier to develop a trusted working relationship, which tends to result in faster turnaround times and higher-quality writing.

Related article: How To Manage A Large Freelance Pool

Location

A freelancer’s rate can fluctuate significantly based on their geographic location. While the average salary range for a U.S.-based freelance writer is $63,213/year ($30.39/hour for a 40-hour work week), rates can vary significantly by state. The state of Washington holds the highest national average at $70,373/year ($33.83/hour), while North Carolina pays the least with an average of $45,795/year ($22.02/hour). The variance in pay is largely linked to the size of the freelance market as well as the cost of living in each state.

Companies looking to save money sometimes turn to content mills (companies/writers that produce mass amounts of content very quickly) or international freelancers who are not fluent in English. While these freelancers may be less expensive, their quality of work typically does not meet the standard for American businesses or needs additional editing. It can also become difficult for U.S.-based companies to coordinate schedules and payments with international writers.

Related article: How To Manage Tax Needs For A Remote Team

Experience and education level

A freelance writer’s education level, skill set, and previous experience will affect their rates. The hourly pay for freelancers with graduate degrees tends to be slightly higher than that of those with high school diplomas or bachelor’s degrees.

However, many employers value skills and experience over educational credentials alone, so these will typically play a larger role in the rate of their pay. An entry-level or junior freelancer will typically require lower hourly rates than a senior freelancer who’s been in the field for several years. A freelance writer with specialized experiences and skillsets, especially in industries that require technical proficiency to write about, also command higher rates.

Related article: 6 Strategies to Hire Talented Editors

Type of work

Freelance writing rates will also vary based on the type and scope of work they’re expected to complete. For example, a content marketing or keyword-based article can cost up to $50 per piece, while the cost of a press release can range anywhere from $200 to $500.

The same holds true for other content production tasks beyond the scope of writing. For example, fact-checking can cost anywhere between $15 and $50 per hour. Copyediting can run you between $30 to $70 per hour, depending on the type and length of the content being edited as well as the editor’s credentials. Other services freelance writers may offer include transcription, line editing, and more.

Increasing rates

A valued freelancer won’t stay at the same rate forever. As freelance writer gains skill and experience over time, they’ll likely be able to charge higher rates for their work. If you can’t meet those higher rates, they may seek out freelance opportunities that can. When planning annual budgets, be sure to budget for freelancers in business expenses with their potential increases to ensure you don’t lose them.

Don’t want to go through the process of managing dozens of freelance writers? Lightning Media Partners offers the quality, commitment, and consistency you’d expect from an in-house team — all with the pricing and scalability of freelancers. View our content marketing package pricing or contact us to discover what you can achieve with a little more marketing power.

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