Things to consider when providing an estimate or quote

The following is a list of things you need to be aware of when costing a job or when putting in an estimate. Treat it as a starting point rather than a definitive list.

1. The purpose of your business

You are running a business. Be clear about the services you are offering, their market value and the fees you are charging. The purpose of a business is to at least cover costs; beyond that its purpose is to make a profit. Taking low or poorly paying jobs means that you are effectively subsidising your client, which will probably make them very happy but won't do much for your bank balance in the short term or the success of your business in the long term.

2. What are your costs?

Do you know how much it costs to run your business? Even if you are working from home and your business costs blend with your household expenses, they are still expenses that have to be met. Do the very sobering exercise of adding up all of your living costs over one year: housing, transport, food, bills, insurance, clothing, etc. This is the amount of money you need to earn to survive; any profit needs to be on top of this amount. If you are not covering your costs then you are either a) editing as a hobby or b) about to go bankrupt. If you are editing as a hobby, you presumably have another source of income. But remember that if you are not covering your costs and your hourly rate is too low, you are undercutting professional editors who rely on editing work for their income.

As a small business owner, you are required to keep yourself informed of current laws and regulations regarding taxation, superannuation, workers compensation, insurance, etc. Your accountant will be able to help you work out your income and outgoings more accurately, but following is a rough guide to get you started.

A freelance editor's take-home pay is roughly half their hourly rate, so if you're charging, say, $100 per hour (for the sake of percentages), you get to keep $50 of it, from which you have to fork out for the living expenses mentioned above. The other $50 gets put aside for tax (30% or $30), superannuation (10% or $10) and holidays and periods of no income (10% or $10). You may not always need the 30% you put aside for tax, but keep it as a cushion in case your income drops unexpectedly.

3. What are you worth?

If you are offered a job that requires specialist knowledge, don't sell that knowledge too cheaply. Every editor has a specialist field that they know about: it could be speedboats, the Murray-Darling River system or primary mathematics; if you are offered work in your specialty field, your client is effectively paying for limited access to the contents of your head. If it has taken you years to acquire that knowledge - i.e. on-the-job training, practical experience, additional study, travel - then charge accordingly.

4. How complex is the job?

It's impossible to provide an estimate or quotation based on the number of words without sighting the manuscript. A 5000-thousand word essay on the endocrine system is likely to be more involved than a 5000-thousand word children's book. But they will both have their own level of complexity that will vary according to the intended readership, the use of jargon, the author's writing style, whether it's been written by a team or a committee, whether it's part of a series, and so on. Never put in an estimate without sighting at least a representative part of the manuscript.

5. Does the job have other components?

Is what you're being offered the whole job, or are there other components that have been lumped in with the editing budget that you're also expected to do? Clients sometimes assume that proofreading is part of the editing process - as a sort of unpaid 'bonus', as are fact-checking, answer-checking, styling, chasing missing parts of the manuscript and creating artwork lists. You may need to (respectfully) educate your client on the different stages of the publishing process, including why they are important and outlining what could happen if these processes are short-circuited.

6. What is the timeline?

Working long hours for a poorly paying job is not good for your health or sanity. If you accept a job with a short timeline, make sure that:

you have the time to do the job
you are being adequately compensated for the time and intensity involved.

Don't take on the job if you are already busy, as the pressure of a short timeline can lead to doing a poor job, and in the long run can lead to stress and ill health.

You can work long hours if you want to, and you can pull all-nighters if you want to ... but you can't keep doing it if you want your business to have any longevity. If you can't sustain your desired working hours every day it's simply because they're unsustainable. You either have to work more effectively in the time that is actually available or find new clients with larger budgets.

How does the deadline stack up against comparable jobs you've worked on? Does it allow the same number of working days or hours, or are you expected to do 60% of the work in 30% of the time normally allowed? Remember: weekends are not officially working days unless you choose make them so, so don't include them when counting up the number of days allotted for the edit.

7. Will the whole job arrive at once?

Jobs that are running late often have staggered arrival times in the mistaken belief that the editor is only working on one chapter or section at a time. If you are making global changes or running macros you need to be working on the whole file otherwise each global change will need to be done again for each chapter. This is a waste of time. It's good for the client, as it allows the author to keep churning out the words - but it is not time-effective for the editor. Keep in mind that manuscripts that arrive in stages can take up to 20% longer to work on.

8. What does the edit involve?

Beware the phrase 'It only needs a light edit'. Keep questioning your client until you have pinned down exactly what it is they require. Does 'editing' mean 'fix the punctuation'? Or does it mean 'rewrite the bits that don't make sense'? Does the manuscript just need a light dusting or does it need a structural edit that involves shifting paragraphs and close rereading to make sure that it still makes sense?

9. Only do what's in the brief

Make sure you get a brief with the job. If you don't get a brief, write up your notes based on the initial telephone call or email and send them back to the client for confirmation. Make sure that you are both clear on what the job entails. If you come across some aspect of the job that is not in the brief but needs doing, don't assume that you should do it. Contact your client; it may be outside the remit of the brief, or it may be something they know is faulty but have decided not to fix because of lack of time or money. If you go ahead and fix something that is not in the brief, your client does not have to pay you for it just because you've done more than was asked. This may be an area where you can renegotiate your fee because of the extra work involved, so contact your client before you start doing any extra work.

Keep yourself informed

We suggest you read these references in the order presented. The MEAA rates will give you something to think about and, yes, there are editors out there earning these amounts. Industry super funds are recommended over retail funds as they charge lower fees and at time of writing (2010) had better returns over the last five years.

The Media, Entertainment and Arts Alliance (MEAA) sets rates for freelance editors and writers. Check out their suggested hourly, half-day and daily rates: http://www.alliance.org.au/award-summaries/view-document/freelance-rates (PDF document)
The MEAA also has a pdf on superannuation, supplied by the Industry Super Fund. It's clearly written and has case studies relevant to freelancers: http://www.alliance.org.au/resources/super_%26_tax_information

The information in this FAQ is intended as a general guide. The Society of Editors (Vic) does not take responsibility for individual job rates and recommends you seek legal and accounting advice specific to your business needs.