What price freedom? How do you price up work as a PR freelancer part II

What the market will bear

Following on from my last blog, which looked at how to calculate your bottom line day rate as a freelancer in this, the second blog of the series, I now look at what the top line day rate could be.

I recall my child’s first bakes sale, he was about seven asked to make muffins. How much are you selling them for? I asked dispensing with the niceties. He hadn’t given it much thought, but guessed 10p each. Why? I asked, he didn’t know. I told him to think harder. Ok cost of ingredients he said. So how does that help the charity? OK cost plus10p he said and so we discovered the concept of profit. So what about packaging and wastage, so we got up to 30p. And he hoped that might be the end of it. But then, I said triumphantly, have you thought of what the market will bear? He looked pretty annoyed at this point. No, he said, he had not. So I explained what people paid for a muffin in a nice coffee house at one end of the scale and how much you paid for a box of six muffins in the supermarket. We decided that if ours were fresh baked, extra tasty, and prettily presented with a winning toothy smile, we might be able push that up to 50p a muffin. It was a pretty successful muffin sale by all accounts…

So what will the market bear for your services, given that you are not baking muffins, all proceeds are not going to charity, and that you’re probably not as cute as the average seven year old salesperson?

Local rate

First stop, so what are local freelancers charging? Here’s a jan 2010 survery that I found that might be helpful, and this on a freelance website, but I’m not sure how fresh it is. Do they compare to you and your skills? Make sure these are valid, long term freelancers/independents. It’s a competitive market out there, but if people are offering to work for ‘silly money’ like you see on the bid sites, are you really going to compete with them, what are you competing for? To see who can go bust first?

Agency equivalent

You need to understand what local agencies are charging. if you’re former agency this is a no brainer. If you’re not, then you need to do some research to try and understand where you map on to the agency hierarchy, don’t go on your old salary (probably higher) but more on your experience and responsibilities, here’s a very very rough guide:

1 -3 years pr experience  - account exec: Support role - admin, research, supervised outreach, supervised content creation, no direct reports ( not sure this is a good time to go freelance myself unless you have very low out goings), reports to account manager

3 - 6 years pr experience  - account manager: Implementation role, heads up tactics, main outreach person, day to day client go to person, directly manages juniors, reports to account director

6 - 8 years pr experience  - account director, lead role, heads up strategy, leads client relationships, oversees budgeting, heavily involved in pitching, manages account managers, reports to group account director/director

8+ years pr experience  - group account director, senior account director etc – same as above but entrusted with more clients, more accounts, bigger budgets, bigger teams, and some development initiatives, reports to director

10+ years of experience – director, running division, sits on key strategic accounts, leads new business drives, develops new services/territories, leads team, responsible for financial health of division, runs P&L, reports to CEO.

Once you can map your role to an agency hierarchy, find out the local day rates for this role. Then to my mind you don’t just round them down, but you slash them. You don’t have the group expertise or the combined reach of an agency, also you don’t have the overheads. I tend to charge under half as this makes me viable for agency work too.

The bitter pill

Now you compare your market research to your notional day rate If your notional day rate tops the market rates, you have a problem. Really why is any one going to hire you in this climate if they can tap into the same services and expertise elsewhere for less? And if you take on a loss leader project, there is only one of you, while you’re not making enough money, there is no one else to make any money at all. Every day you work at the ‘wrong rate’ only puts even more pressure on the other days to over price. You need to think long and hard about how you are going to make this work. Possibly this is not the right time in your career to go freelance, weither you need more skills/experience, so you can charge a stronger day rate or you need to wait until there is a time in your life when you don’t need to earn quite so much (eg the mortgage isn’t making your eyes water, the kids day care bills aren’t making you wish you’d got a dog  instead.).

The sweet spot

The sweet spot for a freelancer is having a low cost base and a high/in demand skills base. If your notational day rate is at the low end of the market rate scale, you’re looking at win win, you can round up your notional rate, still be extremely competitive and know you are going to be earning enough to be able to sustain the freelance life over the longer term. Who knows perhaps you can develop a side line in home-baked goods too, then you really will be able to have your cake and eat it.

Next blog t looking at the variables that allow you to tweak the day rate.

What price freedom? How do you price up work as a freelance consultant?

A recent survey in PRmoment, showed that most freelancers are charging between £200 and £500 a day. So where might you fit in in that spectrum? The next few blogs are put aside to share my ideas on how you decide what to charge, which may be handy if you are considering becoming a freelance PR, are a fledgling freelancer, or one that senses their business model might be a bit broke. 


Part one – calculating a notional day rate 
In this blog I start with the basics, what you need to charge to survive. 
In blogs following I’ll also look at what the market will bear and the variable factors to be considered so that you find that sweet spot that keeps your clients happy and your finances healthy. 


Four steps to working out a notional day rate 
1) What do you need to earn?
Did you really go freelance to become rich? Really? Most people I know have gone freelance, to take back control of their lives, to be able to make their own decisions, to be there for their families and generally to feel like they are living a more balanced and healthier life. And in that sense we are all very successful, though none of us is ‘rich’. So when you are working out what you need to earn, if you really want to be a freelancer, I doubt if it’s anything like what you used to earn. Do a monthly budget of what you can cope with, (you’ll be surprised freelance currency goes along way). 
This gives you your base line figure of what you need to clear after tax. For easy maths' sake lets say that’s a £1,500 a month so £18,000 a year. So how does that convert to a day rate? 


2) How many days in the year do you have to earn it?
Answer: it’s not 365, though this is where you start.
Days in the year                                     365
Less main public holidays                         5
Less weekends                                     104 (don’t actually schedule to work weekends)
Less holidays/family/emergency days  25
Less sick/jet lag/ hangover days            12 ( just being realistic)
Days available to work                          220 ( standard industry figure) 
Now assume that 50% of that time you are not doing client work, either because there just isn’t any, or because you are working but not being ‘paid’ for it, eg admin, networking, training, research, marketing, pitching, preparing materials etc. That leaves 110 days to cover your budget, plus  tax and expenses. 


3) Giving it away…
Tax and expenses. So sticking with our notional some of £18,000 a year, plus expenses say 15% £2,700 ( if you are working from home, can easily be more if you are not), plus tax, say 25%  £4,500. So in theory you need to earn around £25,200, to give you £18,000 and meet that £1,500 budget. 


4) Calculating the notional day rate
So now just look at how much you need in total, and divide it by client days. In our model that’s
£25,200 /110 days = £229/day notional day rate. 


Next blog: how does that compare to what the market will bear? Favourably we hope.

Happy freelance birthday to me – I am one

So I’ve been a funky freelancer/capable consultant (depending on my day rate) for a year now.  I started with just one contract (that’s all you need) and an old laptop (a bad idea).

A year later and business is looking good, and I’m increasingly teaming up with industry mates to deliver wider programmes.

And I'm also the proud owner of:

·         A shiny new laptop (brought in great distress);

·         A comfortable office chair (couldn’t actually stand  after that first month perched on rustic dining room chair);

·         An all-singing all-dancing printer ( I tried  a basic one, but running to the shop to pay 10p for photocopy soon lost its appeal);

·         A fan heater (essential);

·         A dog (absolutely not essential and quite possibly another bad idea but I’m sticking with it.)

I've celebrated making it to year one with a new office rug and several cocktail parties for those who have looked after me most. ("MInd the rug!"). Forgive this nostalgic moment while I reflect on the year gone by…

What was the best revelation?

That I would enjoy it quite so much, even the dodgy days are somewhat thrilling. I love the diversity of work and the random twists opportunities offer. Given my commercial brain, I don’t seem to be overly obsessed with making a fortune (handy). Just doing good work and getting paid well enough for it,  works fine for me.

What was a complete let down?

My misperception that if I didn’t have any paid work I’d be just working on my tan. If you don’t have paid work, you feel somewhat obliged to look for it, and even if it’s already on the horizon, then you still flick open the laptop every day just to keep the admin tidy. A year in, and Loose Women still remains a mystery to me. Damn that work ethic.

And it turns out I hate doing my own PR. I ordered some business cards off the internet and I do enjoy writing this occasional blog, as long as I don’t have to pitch myself as a ‘thought leader’, but beyond that, turns out I’m not very interested - which I think, given my training, is a bit rubbish.

Is there anything you miss about your old life?

Well I’m not lonely which I was a bit worried about, but I have to walk the dog every morning so usually bump into someone to chat to, and then I shout at self-same dog quite a lot all day which keeps the volume up.

As predicted, it’s the IT department that I miss. The combination of having a giant house rabbit that’s addicted to power cables and my own complete inability to do anything other than cry when the black blinky screen shows, means, I’ve truly and repeatedly suffered.

If it’s so great do you wish you’d done it sooner?

check out the new rug!

Erm maybe, not sure. If I’d gone solo earlier in my career I’m not convinced I would really have known what I was doing, ten years in a busy agency means you are learning every day and I’m really glad I have that experience. Without it I think I would have been just too freaked to enjoy this solo life. As it is, my instincts are nicely honed and the advice I give has usually been proven.

So what’s next?

Well no plans for global domination or any more pets (there’s more of them than us now).  But perhaps I should go on a dating site just to spice things up a little. Place an ad that might read: “Mostly chirpy freelancer, smelling slightly of wet dog, would occasionally like to meet IT Geek with too much time on his hands and an endless supply of cables for emergency assistance and fun times (deadline dependant).”

Huge thanks to my early adopter clients who were kind enough to hire me, pay me and refer me. And to my gorgeous friends who have looked after me this just-a-bit-scary, year. My round this year.

In the world of freelance, is it wrong?

Possibly just the first, in an occasional series of ethical dilemmas and ponderings facing this particular PR freelancer…

Is it wrong?

1.     Just in case he’s the only person you’re going to get to talk to all day, is it wrong to launch in with your most perplexing business issues, work fears, and brilliant new ideas while your 11 year old tries to eat his morning porridge and do his shoe laces up?

2.    To wear leg warmers and fingerless gloves with everything?

3.    To pretend the web camera on your Skype call isn’t working when in truth it’s cos you look like shit and The Bloody Dog is jumping around in the background, trying to bury his Kong toy in the sofa?

4.   To have full blown conversations with the rabbit, cat and dog in an effort to recreate those water cooler moments?

5.    To have the fan heater and the central heating on at the same time?

6.     To stuff dog treats in your brand new £40 sheepskin slippers, that were a Christmas present form your lovely mum, in an effort to keep The Bloody Dog amused, just so you can reach your copywriting deadline?

7.     To eat your soup straight out of the pan and then give the carton and the pan to The Bloody Dog keep him quiet for another five minutes?

8.      To hang up on a conference call because you’ve just spotted The Bloody Dog has got the rabbit’s head in his mouth?

9.     To top up your afternoon coffee with a large dose of Tia Maria? And then put its purchase against your tax expenses as ‘office beverages’?

10. To open the door to your child as he comes home from school starving hungry, freezing cold and soaked through, with the greeting: “Can you PLEASE take The Bloody Dog out! I have had him all day and he’s driving me frickin crazy. GO! NOW! GO!”

Agency or freelancer? Who's best set to help you with your comms?

Five factors to consider when deciding your comms partner for 2012:

I recently turned down a brief. Even my 11 year old questioned the sanity of that one, “Have you seen my Christmas list?” he queried.

Thing is, although the brief specified a freelancer it was for one that had specialist knowledge of everything basically - from travel to technology, from business to design, from gaming to food and a fair few other categories for good measure. I’m not exactly a one trick pony but this had AGENCY stamped all over it. I recommended a favourite one and waved bye bye to it. I’m as good as my last job and I didn’t see how I could shine at that one. Besides what’s the point of spending 100 hours bringing in results that I quoted I could do in ten?

So if you’re thinking your comms might need a boost from some professional help and your budget is borderline here’s five things to consider when deciding if a freelancer or an agency is in the best position to help:

1) Budget: is the first factor that most people consider. Freelancers should be charging about half their agency rate (that way their rates remain attractive to agencies looking for freelance support). “Bargain!” I hear you yip, but it’s not that simple…  Say you hire a senior freelancer who is at Account Director level or above, do bear in mind that day rate is fixed whatever the task, so yes amazing value for money when it comes to strategy and guidance, good value for media outreach and creating content, but when it comes to sourcing coverage, building media lists, feature research, reporting tools etc, not so much. In an agency, a junior or intern would be tasked with such mundane and time consuming activities, and could charge accordingly. So if you have an admin heavy/consultancy light brief, you might be better with an agency. News heavy accounts also qualify for this model as they fit better into an agency ‘machine’.

2)Expertise: So if you need lots of different sectors covered off as described above, 100s of media outlets, it’s agency all the way, if you need integrated services, again an agency is often a smart choice although most freelancers have a trusted network they partner up with. But if you want access to senior level support or a fair amount of hand holding again a freelancer might be a better fit as account directors can be pretty thinly spread in a busy agency across six accounts or more. So your monthly retainer may only allows for a day – to half a day of precious AD time.

3)Capacity: Everyone knows its feast or famine for freelancers, but feast for a freelancer might not be a banquet for you, the client. Be sure to have a good understanding of your chosen freelancer’s workload and exactly how many concurrent clients they have. It maybe their eyes are bigger than their hands on abilities. This is less of a problem for agencies who have a bigger pool of staff and of course can hire should work levels remain consistently high.

4) Best practice: A good agency continues to hone and develop best practice, the opportunity to learn in an agency is one of the most compelling reason to work there. A freelancer from ‘birth’ will not have had the same exposure and will have had a different learning experience, They may have developed some shabby habits and I’m not just talking about dress code. If you are going to work with a freelancer, check their pedigree and make sure they have a good few years agency or established in- house experience that they can bring to the table with them. Ask some journalists what they think.

5) Payment terms:  And finally if you know your company is somewhat backward at coming forward when it comes to settling it’s bills, again go to an agency where the two account departments can fight it out between themselves leaving your client relationship cosy. Working directly with a near hysterical, half-starved freelancer who hasn’t been paid for 100 days plus is not going to necessarily get you the kind of exposure you had in mind. Think Sideshow Bob on twitter.

Whoever you chose to partner with for your comms, go in with a glad heart and some real commitment, so that 2012 is a great year for you both.

Horses and courses

The most perplexing thing about writing this blog, is not coming up with the ideas or the opinions, or creating the content and making it interesting and engaging, but noticing days after I’ve posted something, that it’s full of typos. A recent blog post saw me pen the phrase, ‘pig picture thinker’ for heaven’s sake!  

I really struggle with the detail to be honest I don’t even see the detail. Does this make me stupid? I’d like to reassure you it doesn’t, it’s just my brain works very differently to your brain and your brain works very differently to the person you sit next to, or at least we should hope it does. In the words of Groove Armada: “If everybody looked the same, We'd get tired looking at each other.”

Well it’s the same for brains, trick is to understand how yours ticks and how to get the best out of it and then make sure you work with people that tick to different rhythms - or in my case, can spell.

Nicky Imrie, co-founder of the PR Network explains a recent profiling session we did together…Are you playing to your strengths?

an (odd) day in the life of a freelancer

7.15am: Alarm goes off, this is really annoying as now I’m my own boss I’m sure I shouldn’t have to get up while it’s virtually dark, it says so in the small print somewhere.

8.00am: Lasso the pup and accompany my son to the bus stop, and then go our own way.

8.40am: Go for a run.

10:00am: (sharp) Team commute to office.

10:01am: Team settles in for the day: I fire up my shiny new laptop, (last one died without warning, great week that was) cat settles on desk, giant rabbit flops by French window, pup flakes out on sofa. Drink coffee, review mails. The days of 200-plus mails every morning are thankfully no more. There’s a mail from a head hunter, 'do I want to go permanent in a super high-profile new role?' No thank you. Another mail from a journo friend, 'would I like to do some PR consultancy for a small tech company he’s just met?' Yes please. Check out Facebook, Twitter and my LinkedIn groups.

11:00am: Start with some essential admin, this takes easily an hour a day. Arrange collection and repair of my stupid smartphone and brace myself for 10 days without it. To lift my spirits, raise a modest invoice. This still makes me ridiculously proud, as if I baked it myself or something.

11.30am: Okay, so now the day is free for actual work. What luxury! When I was agency side I was lucky if I could find 20 minutes to sit still and “do” anything at all. I enjoy being able to focus, turns out I am a starter finisher, who knew? This morning I’m preparing a workshop I’m giving at the Taylor Bennett Foundation, tomorrow.

1.30pm: Boy do I miss Pret, Itsu, Eat, Tossed. Stand by the fridge and finish last night’s leftovers, then take the pup out, visiting the Post Office en route.

2.10pm: Spend afternoon reaching out to contacts in search of internship opportunities for my USC Annenberg post grad students. I love working with my Californian crew, hopefully I’m teaching them the gentle art of self deprecation while they’re teaching me to be nice – won’t kill me will it?

5.20pm: Welcome my son home. I had to return to full time work when he was only tiny, now he is 11 and this is the first time that I can open the door to him pretty much every day. The novelty has yet to wear off. Manage to fix my printer after a week of glaring at it, feel really rather smug.

6.30pm: Shut down office but brain is still ticking, it’s hard to switch off just like that, so take pup for a quick stroll. Pup is 18 weeks old and my reward for going solo, my bonus if you like.

7.00pm: Hit the kitchen and prepare something gorgeous. Tonight we’re having smoked haddock on puy lentils with hollandaise and an apple crumble. Not bad for a school night.

This article first appeared in PRMoment http://www.prmoment.com/.