The rate calculator is now available as a standalone Excel spreadsheet for those who have purchased the book, or for those signed up to the mailing list at lukespear.co.uk.
It differs from most freelance rate calculators in a few ways:
· It sets a minimum suggested rate, leaving room for growth
· It calculates what that potential growth can be (at different rates)
· It shows you the most profitable agency/direct model for you
· It takes your non-billable work hours and
· Your words per hour speed into account
By setting a rate floor, not a ceiling, you can then experiment with what varying rates above that would give you in terms of hours worked and potential maximum income. It does this over a variety of agency and direct client scenarios.
This calculator offers an accurate representation of a freelance translator’s business model, and allows you to test different ways in which to grow.
By accounting for growth capacity, it allows you to take on additional work without affecting your planned holiday, illness and administration time. The spare capacity this model allows you to build into your rate calculation gives you plenty of scope to plan for the future.
This better fits the positioning I have suggested in the book, rather than aligning your desired income with an equivalent salary, here we are setting up your business for long term growth and stability.
Notes on the calculator
The calculator breaks down into two sides. The left-hand side works out your annual costs (personal and business), how often you’ll work in a year, and how fast you work on average. This produces an absolute minimum baseline rate that assumes you fill all of the planned work hours.
The right-hand side then uses this information to calculate your potential income based on rates you set (hourly or per word), and on various direct/agency combinations of your choice. These show you how long it will take to achieve your income goal based on the rates set. Scenarios 3 and 4 are based on the theoretical rates provided in scenarios 1 and 2.
- Scenario 1 – 100% direct client
- Scenario 2 – 100% agency clients
- Scenario 3 – 75% agency clients (fully editable)
- Scenario 4 – 75% direct clients
If you don’t usually work in a per word rate, use the convertor to the far-right to derive an approximate per word rate from your standard pricing convention.
Notes on rates
When working with agencies, if you do happen to work faster than the words per hour you set (thanks to TMs, tools, etc.) and also manage to fill your daily working capacity (no wasted time, using productivity tools) then the benefits of planning a minimum rate start to compound and give your business a vastly improved chance of long term stability.
If you can’t find an agency paying your suggested minimum rate, keep looking. You will. Use the tips from the chapters above and carry them out regularly and systematically. And if you’re spending that much effort looking for decent agencies, why not go straight to source and find direct clients? They’re often less inundated with LSP offers and most likely to pay you a fair rate that keeps you in business and them in quality. A little extra work for a lot of extra reward.
In professions such as software and web development, some freelancers advise setting a minimum billable unit of one day. Their small projects may include tasks like fixing a small bug on a single page, for example, taking 2 hours. They say to charge per day to avoid scope-creep and to ensure the client values your time fully.
We can’t always do that, as our translation projects are often much smaller than the smallest of software projects, but employ this in principle where possible. One hour should be an absolute minimum, based on word count, but don’t forget to take into account the time it will take to arrange the job, and the opportunity cost of losing out on larger projects that day. These jobs can be profitable, but seeking out longer projects ought to offer more stability in the long-run.
The other professions I’ve mentioned also advise a calculation based on the rule of thumb: your equivalent salaried day rate x3. This is said to cover you, your taxes and any non-billable hours. The rate calculator I’ve provided should be all you need, as it cover these three elements (and more) in a manner that is highly-focused on our profession. It is worth comparing the figures it provides with this baseline used in other trades.
Per word rate – use word counts as a baseline unit for pricing calculations. The calculator takes your non-billable and profit/savings/growth goals into account when producing a minimum per word rate. This rate can be used for new agencies and clients that are used to working in this metric. As said elsewhere, direct clients can actually be confused by complex translation pricing (per word, urgency, complexity, project management fees etc.).
Hourly rate – recommended for smaller jobs for agencies and direct clients where possible. It accounts for the true value and costs of your work very well.
Day rate – this is our most promising rate structure, in that clients are already very familiar with this pricing method. It reflects our work’s true costs and value, reduces administration time and cost (less word/time tracking) and can be used for speaking at events, short-term consulting, standard translation projects. Calculate this by multiplying your hourly rate by 7, offering a slight incentive over hourly-tracking.
Weekly rate – other professions advise this as the minimum for consultancy projects. It is worth having this prepared in case it is ever required, however rare that may be. Calculate by multiplying your day rate by 5 as a good starting point.
These pricing structures should free you from the standard word count model, and give you the time you need to offer a more rounded service.
It also gives you room to negotiate with clients by removing services from your quote, rather than by lowering your price. This way you can remove hours or days required for proofreading, TM creation or glossary building, showing that your time is non-negotiable and reducing the amount of time you will spend on the project. Alternatively you can offer a £50 discount on a £1000 project, which is better for business than removing 0.01 per word (equalling some £75-£100 on the same project), and much clearer for the client.