Barnett's Top Ten Ideas for Transitioning From A Real Job to Gainful Self-Unemployment in PR

By Ned Barnett
(c) 2004

The good thing about starting a small side business is that you can do that and still look for a job - and once you get the job, if you negotiate the terms of your job properly, you can probably still keep working with your clients.

I got my first free-lance clients in 1975/76, and kept getting a few clients (with permission) even while working for several employers - and that process continued for a decade, until I started my own first business in '85. When that business didn't quite work out as I'd hoped (in a nutshell, my partner robbed me blind), I got back on the job circuit, but still kept (with permission) a single client. Then, over the next decade and a half, I kept bouncing between job and self-employment (I'd go back to my business when the job went away), until finally, after 9/11/2001 and the "last great layoff," I decided I was functionally unemployable. However, hope sprining eternal, I occasionally still try for a job (but at 53, nobody will talk to me, let alone hire me), so I keep plugging away at the self-employment thing. And after two decades of trying to make it work, I think I've finally found the secret to success. Perserverence!

A couple of suggestions - actually, my "Top Ten" ideas for folks making the transition to this freelance/small shop business thing:

Barnett's Top Ten Ideas for
Transitioning From A Real Job to Gainful Self-Unemployment in PR

1. Always get your money up front. If you work on the basis of being paid later, expect to have to fight tooth and toenail to get paid at all, and expect it to be late, and expect to get it only after much grief. This won't always happen, but it will happen often enough to make you wish you'd paid attention to me. Unless you get paid, in full and up front, expect to get stiffed at least some of the time. Trust me on this - the voice of experience now going on 30 years of doing this kind of work, and of being stiffed occasionally (OK, I'm a trusting soul and a slow learner). In one two-year stint of self-employment in South Florida, I had a 100% record - every client stiffed me, at least once, for sums ranging from under $200 to greater than $15,000. Ouch. As an adjunct to this, wait until the check clears before you start (as I write this, I'm still trying to collect on a bad check from a client I've worked with for a dozen years).

2. Put together a rate sheet, along with a rationale for why you're billing up front. I've attached mine as another blog at: http://barnettmarcom.blogspot.com/2004/12/barnett-marketing-communications-rate.html - feel free to steal from it, or copy it, or ignore it. It's free - and worth every damned cent you'll ever pay for it.

3. Create a website. Mine is a good example, though it's damned long (I like to write, and I have a lot to say - and after more than 30 years of freelancing and gainful self-unemployment, I've got expertise in a lot of areas). But long as it is, the website was not expensive - simply because it's got no bells or whistles. You probably have the skills to create a website, or know somebody who does - but if not, I'll be glad to refer you to my webmaster, who hangs the moon as far as I'm concerned.

4. Blog - but do it with a difference! I don't use blogs as a way of venting ideas of the moment - I use them to publish the kinds of articles that might be printed in trade journals (in fact, some of them have previously been printed in just that way). You can go to my Barnett on PR and Barnett on Marketing blogs and see what I mean. Some of my older, pre-election blogs were political (but always tied to PR), but many are just about PR or Marketing. Some are about experiences I've had. Some are about what Martha Stewart and the U. of Colorado should have done to avoid disaster. Give advice, show your stuff, etc. The point is this - don't use blogs to vent emotions or trial-balloon ideas - use them to publish well-considered PR and marketing concepts that will impress others (especially prospective clients or employers), and use them when searching for new business. I have, and frankly, I'm amazed at how well this has worked for me.

5. Network. Locally, of course, but also on every PR listserv you can get on. Get to know people there, then let them know (subtly or blatantly) that you freelance. Lots of my work is as a subcontractor for other agencies that - in other cases - might have been my competitors. Two of my largest and steadiest clients are other agencies. But go beyond the listservs - also go to the chamber of commerce, the local PR and Ad and Marketing clubs (the main ones and ones specializing in niche markets). Get involved with a local college PR program - guest lecturer, whatever. More on this below (see number 10): volunteer for PR work at high-viz charities (but make sure that the Board knows what you're doing - don't let the in-house PR guy or gal grab credit for your work). Bottom line: Get your name known.

6. Promote yourself as a successful PR practitioner. Send out press releases on everything you do (I wish I'd follow my own advice on that more often). Announce new clients, successful campaigns - even new blogs or trade-journal articles. And post all the press releases on your website press room.

7. Promote yourself as a source. Develop a list of media types and blast email them with news story ideas, etc. Recently I gave a story to Fox News - they asked me my "angle" and I just told them that I thought they'd be interested ... that I had no linkage to the story, except a desire to help. They liked that. But putting out ideas also pays off - tomorrow (as I write this) I'm going to be on Fred Imus's show (Don's brother in Tucson) for 30 minutes talking about public policy PR - all because they liked an idea I pitched them (and dozens of other radio producers). I do maybe four or five interviews a week, and some of them pay off with leads, contacts, maybe even clients - the rest are just fun, and help me feel like I'm really doing something, even when I'm between clients.

8. Find ways of contributing to PR trade publications. Right now, I'm on the advisory board of PR-News (just because I asked, after contributing to their publication more than a few times), and last week, I gave an in-depth interview to PR Week. Don't know if it helps a lot, but it can't hurt - and one interview I gave last summer for Book Marketing Update got me a client, so it does help. Remember, there are a few major PR trades, but literally hundreds of niche-market PR trades (including association journals) - many of them are starved for GREAT copy on focused PR issues. So get the lists - all you can - and start pitching ideas.

9. Speak out - in public. Get on the agenda to provide programs to civic clubs, fraternal organizations, business groups, etc. Put together compelling talk ideas that link your expertise in PR to their specific focus - and when you're there, speaking, network again. Collect business cards (offer them a deal, or have a drawing, or something).

10. Charity organizations - get involved. I once picked up a client by offering a PR plan in a raffle my son's school held as a fund-raising program. A local printer bid $500 for the plan (worth, as I delivered it, about $1,500 - but I had the time, so it cost me nothing), then he retained me to fulfill the plan. It was a sweat deal. But beyond that, offer your services to local groups. Two years of volunteering for the United Way got me two clients the following year, and staffing a Business-Labor-Healthcare Coalition not only got me a client, but it got me a sweet job offer, too. On the other hand, the last time I was hiring, I was overwhelmed with over-qualified candidates, and couldn't decide. Then I went to a local charity event and saw one of the candidates "working" the media for the event (as a volunteer). I liked what I saw, and the next day he was on the payroll. So it can work for freelancing and job development, too.

That's it - ten solid tips for those just out of the job market and into the exciting life of self-unemployment. I hope you enjoy it - and if you have any questions, drop me a line.

Barnett Marketing Communications Rate Sheet - Updated October 18, 2004

Introduction

I referenced this in a blog on ten tips for the newly self-unemployed, so I thought I ought to post it for those who'd like to see what I was talking about. In addition, because this is a fairly innovative rate schedule (with a sliding scale, and an up-front payment policy), it might prove helpful to others in PR and Marketing. So if you'd like to see how a consulting operation in business for 20 years has evolved it's rate structure, take a look.

Ned

***

Thanks for asking for my pricing structure and billing options. My rate structure is based on a sliding scale – the more work I do for you, the lower my hourly fee. I generally work on a month-to-month retainer basis, though I also take on project work.

Because my rates are dramatically lower (for a professional with 30-plus years of experience and my level of credentials) than those offered by major agencies, I ask my clients to pay me up front (each month, for retainers, or at the start of the project, for project work). This keeps my operating costs down and my fees low – a win-win situation for both of us.

Here is how I usually work:

1. Clients – those who agree to a monthly retainer fee – receive a much lower rate, a rate based on the hours retained. A retainer allows clients up to a given number of worked hours per month in exchange for a flat hourly rate. For instance, a retainer of $1,500 per month would purchase up to 10 hours per month at my base retainer rate of $150/hour.

2. This retainer fee is paid at the beginning of each month, before work for the month begins. Client-approved hours worked that are above the hours retained each month are billed at the lower retainer rate – this bill goes out at the end of the month, and is due to be paid by the 15th of the next month.

_________________________________________
420 N. Nellis Blvd., Las Vegas, NV 89110
Phone 702-696-1200 – FAX 702-696-1211
email: ned@barnettmarcom.com
http://www.barnettmarcom.com
Page 2 – Fee Structure - Barnett Marketing Communications

Retainer rates (per hour) are based on the size of the monthly retainer budget:

a. Monthly Retainer Budget – $1,000 - $2,499 – hourly rate: $150/hour

b. Monthly Retainer Budget – $2,500 - $4,999 – hourly rate: $137.50/hour

c. Monthly Retainer Budget – $5,000 - $7,499 – hourly rate: $125/hour

d. Monthly Retainer Budget – $7,500 - $9,999 – hourly rate: $112.50/hour

e. Monthly Retainer Budget – $10,000+ – hourly rate: $100/hour

Because these quoted retainer rates are sharply discounted off of Barnett Marketing Communications’ standard base rates for stand-alone projects, each retainer payment must be made by the client at the beginning of each month (or at the beginning of each billing period). Bills for extra hours – and for expenses, if applicable – must be honored in a timely basis (i.e., paid by the 15th of the following month). Retainer agreements may be canceled by either party on 60 days’ written notice.

3. I prefer to work on a retainer basis, and as a result, my retainer rates are much lower than my project rates. However, clients occasionally need a one-time project completed, often on a “rush” basis, and in those cases, I offer them my standard project fee. My base rate for project work is $200 per hour. This rate is reserved primarily for one-time clients, and for unscheduled rush projects. Clients who prefer a project basis can work in one of two ways:

a. A fixed-fee project, with one-half due at the outset and one-half due 30 days from the start of the project (or mid-way through the project, whichever is sooner)

b. A fixed-fee project, for up to a pre-determined number of project hours; hours above that to be billed in 30-day increments (in advance) at an hourly rate to be set at the time the project is contracted. Project fee to be paid one-half at the start, and one half 30 days from the start of the project (or mid-way through the project, whichever is sooner).

Obviously, because of the risk involved in fixed-price projects (i.e., the chance for in-process changes adding to the time that must be committed to the project), rates for fixed-price projects tend to be higher; but they are fixed, and some clients prefer that option.

Page 3 – Fee Structure - Barnett Marketing Communications


4. Expenses are often far less of a factor than in prior days, thanks largely to the low cost/no cost communications made possible by the Internet. However, if expenses are necessary (and this is will be agreed upon in advance at the time we strike an agreement) – they will be estimated at 10% of the monthly retainer or project fee. Expenses will be billed out at actual cost at the end of each month, due by the 15th of the following month. For clients/projects that involve anticipated expenses, those expenses which are at or below 10% (for long distance phone, Fed-X, etc.) are not itemized nor do they require prior client approval; expenses above 10% are itemized, approved in advance and receipts are available for review.

Some other particulars you’ll want to note – taken from our standard client agreement:

a. If expenses are deemed appropriate for the client/project, as indicated in the agreement – Barnett Marketing Communications will be entitled to bill all reasonable out-of-pocket expenses for items such as postage, delivery and travel, separately, each month (due and payable within 10 days of invoicing). Unless an expense escrow account is set up to cover these costs, hard-cost invoices will be marked up at the industry-standard rate of 17.65%. This reflects a 15% increase over the actual costs (the mark-up covers our accounting and carrying costs). All mark-ups will be set aside if there is an expense escrow account, or if the client direct-pays expenses.

b. Whenever possible, we arrange for our client to be direct-billed for travel, or by hard-cost vendors, saving clients the mark-up cost and focusing more of their budget – of your budget – on productive deliverable services, rather than overhead.

c. Collateral material, press materials, audio-visual production, and advertising production requested by the Client will be billed at the industry-standard markup of 17.65%, which reflects a 15% increase over the actual hard-costs of these deliverables – unless these are direct-paid by the client or are covered by an expense escrow account. Note: Such costs are increasingly less likely to be incurred, due to the cost savings made possible by the Internet.
Page 4 – Fee Structure - Barnett Marketing Communications


d. Unless the client direct-pays these expenses (the preferred situation for both parties), Barnett Marketing Communications will receive 50% of all bid third-party costs in advance of the start of projects involving third-party vendors. This advance policy applies primarily to collateral and production expenses – and will receive the final 50% ten days before the estimated delivery date of the deliverables.

e. For advertising placement, the industry-standard commission of 15 percent is billed (client pays gross charges, agency pays the media at the net rate); all advertising is pre-paid in full by the client, which enables us to negotiate the lowest possible ad placement fees on behalf of the client.



Payment

For your convenience, payment may be made by direct deposit into my checking account. Account information will be provided to facilitate such direct deposits. We also accept payment by wire transfer, or by personal or business check, with payment made out to Ned Barnett or to Barnett Marketing Communications; however, we require that such checks clear before we can begin work. PayPal may also be used, but requires a 5% service fee (to cover PayPal’s charges to me).

International clients (clients based outside the US or making payment from non-US banks) must make payment by wire transfer or PayPal, in U.S. dollars. International checks will not be accepted as payment for services.

Conclusion

I am also open to other working arrangements; however, these approaches have served me and my clients well for nearly 20 years. They are fair to all parties, they promote trust, and they ensure that the work gets done on time and in a fully professional manner.

I hope this answers your questions. If you have further questions, please let me know.

All the best




Ned Barnett, APR
Fellow, ASHMPR
Barnett Marketing Communications