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Saturday, April 16, 2022

How Using Your Hourly Rate Can Inform Your Writing Business.

I have a theory that most of us do stuff without ever figuring out whether it’s a good use of our time. Indy and hybrid authors are well-served to figure out what an hour of their time is worth.

When I worked for a consulting firm, I knew exactly what an hour of my time was supposed to be worth. The company attached a billing rate to me. I recorded my activities on a timesheet. Each month, the computer combined everyone’s time with their billing rate; the client manager sent out an invoice to reflect the monthly charges. Pretty straight-forward, right?

Some months, however, the client manager couldn’t charge the client for all the time we spent. Maybe we were inefficient. Maybe the budget was too low. As you can see, even in a billing-rate environment, my actual hourly rate was not a precise figure.

I mention this because this next part is where you may object that authors don’t have anything like a billing rate, and so this inexact idea of how much an hour is worth doesn’t apply. Horse pucky.

If you state on your tax return that you are operating a business as an author, this applies to you. Estimating your hourly rate will help prioritize your time and energy. Take out your paper, pencil, and calculator and follow along.

Line one: How much will you earn from your next book? If you have a traditional publication contract, you can use your advance—or if you do better (or expect to), use a higher number. Do try to be reasonable. If you pay for services to create or market your book (editor, cover artist, ads, etc.) subtract those from your earnings, so you have an estimated net earning. If you are an indie author, estimate what you’ll make over and above what it costs you to produce and market your book.

Line two: How many hours will you spend creating your next book? Include time for your first draft and subsequent edits. Plotters, include time spent plotting. If you produce your own covers, count that time too. And hours formatting for print and electronic media. If you market your book, include that estimated time, as well.

Line three: Divide line 1 by line 2. For most authors this is a depressingly small result, often below minimum wage (mine is). I’m not asking you to share it with anyone, and I attach no value judgment to how big your number is. It’s like a weight; choosing not to step on the scales doesn’t make us weigh less or more.

Let’s say you arrive at $4. How can you use this number to help your business grow? At the broadest level, you know writing must be a side-hustle for now because even if you work 3,000 hours a year, that’s only $12,000.

You can use your hourly rate to evaluate purchases. Let’s say you need twelve hours to bring your manuscript from (for example) Word and develop a print-ready PDF and also format it for Kindle and ePub. That is twelve hours you could spend on writing the next book. If someone will do it for you for $25, you would be wise to hire them and spend your time writing. If they charge $125, at your current level, you are better off doing it yourself.

Perhaps you hear your friends rave about Scrivener. It’s only (say) $40. If it can save you ten hours, it’s a bargain. Remember, though, that’s ten hours of net time. If you spend twenty hours to learn how to use the program, you’ll need to save thirty.

Or you spend money on a class that teaches you how to edit your novel more efficiently. The course costs $80 and you spend twenty hours practicing (so another $80). Afterwards, you find you can eliminate one entire set of revisions, saving (say) 100 hours. For you, this class is hugely effective.

One way to evaluate the decision to stay traditional or go indie is to project hourly rates under both scenarios. That calculation will reflect not only the different earnings, but the time required to generate those earnings.

These calculations can be highly effective for anyone whose earnings have plateaued. The hourly rate is fairly constant. That’s the case for many mid-list authors. With new authors, I suggest another approach.

Aspirational hourly rate

In any career we must continually invest in our education and skills development, but we need a lot more work early in our careers. We’re frankly inefficient, and it shows in our often paltry hourly rate. One way to recognize the value of these investments is to determine our aspirational hourly rate determined as follows:

1. What net income do I need to earn to make this career a go? (Be realistic—if you win the lottery and become the next Nora Roberts, you have different issues to consider.)

2. How many hours a year am I willing to work?

3. Divide (1) by (2).

Say we need $30,000 and will work 2,000 hours. That’s $15/hour. Use this aspirational hourly rate to make purchase/self-production decisions. Now you value the twelve hours it will take to format your book at $180. Hiring the pro is a no-brainer (given the rates in the earlier example).

The cost of Scrivener drops to under three hours.

If you can save fifteen hours by having someone else do your taxes, that’s $225. Depending on what an accountant charges, it might be better to do them yourself.

Recognize that by using this approach, you are investing in your business. You will almost surely lose money in your early years. Most start-ups do. It allows you to make long-term decisions that help allow your business to succeed. If you have loftier goals and only want to do this author-business if you can earn at least $100,000 and will work 2,000 hours a year, that’s a $50/hr. rate.

Be aware: the higher your goal, the larger your potential investment. And there is no guarantee of success.

This exercise will convince some they are unwilling or unable to take the monetary risks required to implement an inspirational hourly-rate mindset. That’s valuable information, and you can still make informed decisions using your actual hourly rate—or admit you are doing this writing thing for reasons other than to make money. That’s fine, too.


James M. Jackson authors the Seamus McCree series. Full of mystery and suspense, these thrillers explore financial crimes, family relationships, and what happens when they mix. Furthermore, a novella is the most recent addition to the series. You can sign up for his newsletter and find more information about Jim and his books at


Annette said...

My husband has long complained I'd make more per hour flipping burgers. It's a good thing I love my writing career.

Jim Jackson said...

Annette -- My statement has long been that if I were in it SOLELY for the money, I would have worked one more year in my old job and never written a word.

KM Rockwood said...

Ah, leave it to Jim to have figured this out, and explained it to us in an understandable way. Thank you, Jim!

Kait said...

One of the best explanations I’ve seen on this oft-neglected subject. I am depressed 😊

Margaret S. Hamilton said...


Kelly Brakenhoff said...

My day job works on an hourly basis, so I often make buying decisions based on how many hours of work an item costs. Thanks for the reminder to use my writing hourly wage (as a newbie I’m still in the aspirational group) instead of my day job hourly number to calculate the cost of my writing time. As Kait said, it’s a bit depressing but also a good reminder.

Jackie Layton said...

At the first writing conference I attended, I heard one author ask another if she'd made $1000.00 a year yet. The answer was no, and right then I knew writing wouldn't be a lucrative move. However, I still longed to write. It was years before I shared this conversation with my husband.

Jim Jackson said...

Thanks all.

@Kait & @Kelly-- knowing is better than not knowing even if it is depressing because it lets us make better decisions.

@Jackie -- Some conversations are better not shared with significant others!

Shari Randall said...

Starving Artists Are Us! And we wouldn't change a thing (except for the pay scale)

Susan said...

Between teaching and writing, I’ ve always thought I have a talent for things that pay very little. It is telling that all my children went into business.

Jennifer J. Chow said...

Interesting, Jim. Yes, that paltry hourly rate should definitely not be the sole motivator for writing.

(Jackie, wow! I can't imagine overhearing that when I first started writing and not feeling discouraged.)

Marilyn Levinson said...

I'm almost afraid to find out how little I make per hour. But as Shari said, I wouldn't change a thing.

Korina Moss said...

I did figure out my hourly writing rate once -- it was ridiculous, LOL. I'd find it hard to figure the worth of everything I do to market my book. I do interviews, blogs, author takeovers, etc to promote mine and don't charge anything, of course. It would be hard determine a direct link to how many more sales this leads to. But all these things are necessary for longevity.

Debra H. Goldstein said...

Depressing, but who says happiness doesn't have some associated depression? or, is it madness?