Thursday, June 30, 2011

The Freelance Rules #9 - Find your niche

When I first started freelancing in the early '90s, my specialism was death. Well, I say death, I mean dead people. And when I say dead people, I mean their money. I'd worked, briefly, as a Probate Commissioner in the '80s and had built on the experience while at Which? Magazine, co-authoring a wills and probate kit and writing both reports and book chapters on how to deal with someone's estate.

So, when I was setting out for the first time as as an independent, I had a niche: a specialism where I really was an authority on my subject. It got me more work on titles for accountants, for the Government and even a couple of BBC radio appearances. That niche led me to new building new relationships with editors and commissioners who used me not just to write about wills and estates, but other aspects of legal issues and, making a sideways leap, investments for the elderly. It all helped me get up and running and gave me a regular income stream in those three years of running my own show.

I've long-since left those initial specialisms behind as organisational communication has filled my plate over the last decade and a half, but have never been afraid to use specific experiences: companies and industries worked for, and areas within those organisations, as my entry card when looking for work.

As a microbusiness, the worst thing you can possibly be is the 'jack of all trades and master of none'. If that's the case, you're always going to be competing for work with others who are just a little bit more specialist in the area where you're trying to pick up work. That will make your business development harder- and you'll have to compromise on other factors (price!) to improve your chance of landing the work.

I pick up a lot of work for finance teams, IT and facilities management - I'd love to get some of the sexy marketing stuff, but have built my best relationships around the back office. It goes back to the days when I was running comms for Barclays' Group Planning, Operations and Technology. It may not be the sexiest of areas - but I've found a good niche where I can operate effectively.

Tuesday, June 21, 2011

The Freelance Rules #8 - keep on top of your business

It's important to start out as you mean to go on in your microbusiness life. If you're just passing through, on the look-out for another in-house role, there's probably little point in operating as anything other than a sole trader. It's the simplest way to administer your business - but still needs the discipline to keep control over your financial affairs and to set up the necessary insurances and protections to ensure you're covered for the work you - and should anything go wrong.

If you're set up to remain a microbusiness, it's worth considering whether you need to establish limited company status or, if you're working with someone else, a partnership agreement. It's essential to have a formal arrangement if you're more than one person - you may think your working relationship with your partner(s) will always be terrific. But what if it's not? What if something goes wrong or things turn sour? What if another person in the business wants to move on? You need to know your legal standing and have a plan in place if you suddenly have a stack of projects to deliver, but no-one else to make it happen.

Of course, many businesses start from one or two people and suddenly have three, then four, then eight then 10.....and in the last few years may have been trimmed back to a few or a couple. Clearly if you intend to grow the business, set it on a proper legal footing as early as possible. Being a limited company can be a hassle in terms of keeping accounts - you need a properly qualified/registered accountant to audit the business each year (even if you're turning over tuppence), but it gives more options for growth - and also still seems to hold sway both with banks, if you're looking for finance, and with clients. With most services procured through purchasing teams these days, it's actually much easier to pick up business if you are a legally registered entity. If you're just Jessica Bloggs sole-trading, you may well find it far harder to get on a preferred supplier list, no matter how excellent the service you provide.

Equally, if your clients are big and expect to pay VAT on invoices, it's probably worth registering - even if you fall short of the threshold where you have to. If you're an anomaly in a purchasing process, things are far more likely to go wrong. VAT is more bureaucracy - but it's worth being registered if it helps you get paid the right amount when you expect it.

Most microbusinesses hate business administration - we'd rather be out there doing the work. But it's vital to keep on top of your financial affairs. If you miss that VAT deadline; don't pay HMRC or slip beyond the overdraft (even though it may not be your fault and down to the vagaries of cashflow), your credit rating will soon start slipping and black marks will start appearing on your credit rating. Business health is something procurement teams love to check - so when pitching for that project you'd love to do, the last thing you want to explain is why your business might be flashing up amber or red on a procurement health check.

Don't make false economies: in my case, I pay the rather excellent Amazon Office Management to keep my books on the straight and narrow. Equally, Leapfrog is insured to the hilt in case something happens to me or Jac or if there are any problems with our work (no problems on either count in 11 years). We've never had to claim on any of the insurances, but at least can go to work unworried that the business is at risk.

Cashflow, especially in the past few years, is never too far from the forefront of any microbusiness' mind. But my advice is to get to know not just your clients, but also the people who physically are responsible for paying the bills. We all rail against bureaucracy and a culture that aims to keep money in the biggest organisations for as long as possible, but I tend to find that the individuals actually working in the accounts payable teams are a pretty good bunch. The worst possible thing to do is to blame the inconsistencies of a payment system on the person at the other end of the phone. Much better to find a way to work things out.

It's harder to establish a working relationship with your bank or the taxman - these days they tend to be faceless machines and loyalty appears to count for little. The best bet is to set achievable parameters for paying tax or repaying any borrowings and move heaven and earth to work within them. And, if things go wrong, get on the phone fast. You may not get a lot of sympathy, but you'll generally get a way to move forward.

Running a business is about doping significantly more than the service you're paid for. It's rarely sexy, but it's essential to get the basics nailed as early as possible in your business life.

Sunday, June 12, 2011

The Freelance Rules #7 - Keep Developing

While out and about last week I ran into a guy who used to freelance regularly for me back in my Barclays days. 'What are you up to now?' I asked. 'I'm pretty much out of the comms game now,' he responded. 'I do a bit of book keeping for my son, and have a sideline in importing specialist wines, but the comms work dried up a few years back - I think the market just moved away.'

It was a bit of a shock to hear this, as the guy had been one of the best independents I'd used - and is only about 10 years older than me. He was a magazine specialist, with a long background in printed magazine journalism. His problem, it seems, is that's what he did. As comms moved ever more electronic and then social; and as the skills of an organisational communicator moved from packaging information to facilitation/corporate conscience/leadership coach and all the other areas that have built on the basics of an ability to tell a story, he was rather left behind. 

When you're out of the corporate world, it's very easy to get left out in the cold when it comes to training and development. But our world moves pretty quickly now, so it's incumbent on any freelancer hoping to keep up with the game to stay on top of the trends and keep finding new ways to apply our skills.

Straight-forward commercial training courses from the likes of Melcrum and similar outfits in the market are a non-starter for most microbusinesses. They're aimed at corporates and thus are premium-priced. Given that independents pay twice for any training opportunities (cost of attending and opportunity cost of a lost day's work), I've always reckoned the best way to take part in such a course is to present it! If you have a skill that's in demand in the market, train people on it. You'll probably gain as much as you impart - and if my experience is anything to go by, you can generally barter a couple of days delivery for places on other courses.

Make the most of associations too. I've been to a number of IoIC conferences and IABC events down the years without ever paying full price - instead, I've given something in kind to hear the latest industry presentations. In the days when the IoIC was CiB and even BACB, I've presented sessions; covered the conference as a news event and even driven exhibition kit up and down from Newcastle for a conference place. I've gone on waiting lists for standby tickets to events and have even stepped in when clients have had to give up a paid-for ticket.

Never forget that associations deliver training too. It may not be as flash as a Ragan or a Melcrum, but IABC or IoIC training days are likely to be a fraction of the cost - and often with the same calibre of expertise.

These days, LinkedIn groups are a great informal developmental source. People throw out questions and the collective brain power of the group quite often gets involved in an electronic brain dump - often there's great insight to be had: free of charge.

Just because you work for your own business, don't neglect on the job training either. So often we work as part of a major change project or large corporate initiative where our clients grow and develop through the experience. Why shouldn't we do that too?  Wherever I can on a big project (and the comms team is a great place to be) I've looked to suck the brains of leaders and experts dry. I suspect every new thing I learn now will be applied on future work further down the line.

Finally, I've found another route to keep developing. I went back to university in 2007, first gaining my MA, and now working towards a PhD. The research has little directly to do with my current job, but often opens up new avenues of thought to me. Sometimes just sitting with fellow students talking about each other's work can set me off thinking about a project I have in my work-life. And it's weird how people expert in Hungarian economics, Arctic politics or sovereignty among Native American nations can spark off a great idea for a thorny comms problem. Perhaps it's just being among people devoted to learning, but it;s given my own development a new lease of life - and may even open new areas of opportunity to me in the future.

The bottom line is that however good you are at what you do, the business world will keep evolving. If you don't, the only way to go is the way of the dinosaur.

Monday, June 06, 2011

The Freelance Rules #6 - Know your worth

I love Jessica Hische's contribution to the unending debate microsbusineses and our clients get into around price and value. For me, the bottom line when it comes to commercial organisations is never work for free. I'd add another strand to that: establish your real value and stick to it. In essence, don't give your services away cheaply.

That's been really tough in the downturn, but once you know your worth, aligning your charges to the real value you bring to a client it helps you, the market and clients too.

I hate quoting a day rate to potential clients: in terms of £ per hour/day, I'm by no means the cheapest (though, I surprised myself on a rates survey recently to find out I'd dropped from upper quartile to middle) - and far too many service procurers are driven only by price. I don't actually know anyone who does what I do as fast as I do it. Equally, I have 20 + years experience in my field, and work with a group of people equally experienced. So, what the client 'gets' for a day's worth of my time is far more than they'd get from someone who may charge less, but may also not deal so well with the real issues - and may end up reworking (and recharging) several times before the client is satisfied.

Price-driven procurement is fine when the procurer is sourcing widgets that will meet the same need in the same way day in and day out. Buying a service is very different - but the pressure on the smallest businesses is to keep cutting prices to satisfy the client's desire to cut their costs. But microsbusinesses have to be braver: we have to recognise the value we provide and stick to it. The easiest way with procurement teams is actually a cop-out: it's to start higher than you would expect and compromise pretty much at the point you would normally charge anyway. They feel better - and you still get your expected return. But overall, this probably has the effect of inflating the market: not what 'procurement' is supposed to do.

Once you know the client and are dealing with the real commissioner not their procurement team, you can actually negotiate on the basis that they'll understand the value you bring to their team. If you merely duplicate something they can already achieve in-house or can buy in cheaper from another supplier, you can't expect to charge huge rates. But if you have specific experience or a skill that they can't duplicate elsewhere, your service will be at a premium and you're in a much stronger position to stick to your guns on price.

The flips side is that you have to offer service levels that justify your charges - there's absolutely no room for complacency.

Somehow clients seem to think they can pay an independent or two-person business considerably less than their high-powered, all-singing-all-dancing agencies. I'd contend that if I'm guaranteeing to provide as good a service as that agency - or indeed a service that the agency can't offer - there should not be a difference in the price the client pays. The reality of course is that I don't carry the overhead of that agency so Leapfrog can be a far more cost effective vehicle for getting the job done. And, of course, many agencies are little more than a front. The business developers and a small core team work directly for the agencies - and many services sold on to clients are actually bought in from independents (and we're charged out at well over the price we charge the agency).

Occasionally, clients have a very naive view of payments though, and assume that the £xxx a day I charge them goes straight in my pocket. Somehow the fact that I have to cover pension, insurance, office costs, legal and accountancy costs, VAT, corporation tax and all the rest before I even see any of the income passes them by. Though there are undoubtedly some tax advantages in operating as a limited company, it's marginal these days. What I would say is that it's apples and pears to try and equate a day rate to a salary.

Driving down on price has a harmful effect on clients in the end as many really good small suppliers are simply driven out of business - and those that remain will, in due course, simply push up prices again as their services will be scarce. It's all terribly cyclical when it doesn't need to be.

Meanwhile, those independents who deliberately undercut the market do themselves no favours. Names soon get around in what's a pretty small, tightly-knit community - and once you set a value on your services, it's hard to increase your prices later. If your clients know you as a £200 a day person, how can you expect to justify double and triple that - even if that actually reflects your market worth?

So, as a microbusiness, it's essential to check out what the rest of the market is charging, not just when you start, but on a regular basis. You will have to justify your worth time and again. You'll know what it costs you to run your business - you have to get to know your break-even point and the point at which you can make the money that delivers the lifestyle you want. If your service justifies it, price around that (without being greedy). If not, it may be time to get a job.

Wednesday, June 01, 2011

The Freelance Rules #5 - know your place

I learned a very salutary lesson on one of my first projects after I left Forte. I was commissioned to collect testimonials for an internal change team and produce an internal communications strategy, activity plan and toolkit they could use to promote their services to the rest of the organisation. They were a busy bunch, so after agreeing a budget and timeframe, they pretty much left me to get on with it. It was a relatively large project and I decided the best way to fulfil it was to work with a larger consultancy who could provide both bodies and expertise to ensure we got the research completed effectively and could then work on the necessary tools.

The problem was, as we interviewed stakeholders across Europe and the US, the picture of the change team that emerged was not as rosy as we'd expected. The feedback was by no means awful, but a number of issues emerged . The value of the change team was called into question by some stakeholders; some points of process clearly rankled with some of the areas of the business they'd worked with and some of the personalities in the team - including its leadership - had definitely rubbed the internal clientele up the wrong way. We sat down as a research team to discuss our findings and rapidly moved into solution mode. Over the course of the next week - a week in which I devoted a good 70 hours to the project, we turned a six figure assignment into a small five figure one - all by exceeding our brief and not being attuned to what the client required.

The meeting where we presented our research back to the client ranks in the top two of awfulness for me still - the best part of a decade on. It's only trumped by the day I wore one suit's jacket and another's trousers to pitch for a hotel's PR account while beset by a migraine and not knowing that the brief had changed significantly between getting the appointment and delivering my presentation.

But back to this early experience. In my days at Forte and Barclays I had been expected to stand up and challenge management on their behaviours and practices. My comms team had fulfilled the role of corporate conscience, calling to account actions that sat outside our corporate culture, vision and values and then working with the leadership team to use communication as the enabler to role model the desired culture through the organisation.

I hadn't been asked to do that here. I'd been asked to facilitate a sales communication process for a team that was confident in its own abilities; had the mandate of the global management team and was delivering a significant change that was painful but necessary for many of its stakeholders. We weren't being asked to hold up a mirror to them to show them their faults. I have never known a client so incandescent with rage either before or since that day. Much of what we had to say was right and the issues we were highlighting were real. But we did not have the authority to presume that we were the people to provide the solutions to those issues.

Our mistake had been two-fold: first, to jump into solution mode and to second, to bypass the team's communication manager who had hired us. We assumed we could change the nature of our assignment by appealing straight to the top guy. We had brought the comms manager into the loop a couple of days before the meeting. But she, feeling undermined, had quite understandably let us hang ourselves in front of her boss. We hadn't set out to undermine anyone, and thought we could add real value and integrity to our offering. But in listening most acutely to the views of the most disgruntled on the receiving end of the change process, we'd manage to completely lose sight of the brief. Our proposed strategy, though sound, never had a chance of a fair hearing and the lucrative website, training, events and supporting collateral all disappeared to another supplier more willing to execute the brief as stated.

At that point I learned the difference between being an internal communication lead and an external supplier. Ever since I've worked hard to deliver on the brief given to me to the best of my ability. By building relationships with clients and working closely with them over the years, I've reached a point where often I can influence a brief; where my viewpoint is respected, sometimes sought and sometimes acted on. I'm a partner in the communication process, but when my input to the company is measured in four or five figures, and their turnover is measured in billions, I know that it's no way a partnership of equals. I know my place.

Knowing my place doesn't mean being humble or simply delivering without question. My value comes in being able to get to the heart of an issue, challenging where necessary and charting the best course of action. It's best expressed by getting on board early in a project working with and for my internal contacts and finding the best way to use communication as an enabler to achieve the required outcome. But the bottom line is that whatever project I'm engaged on is owned internally. I can influence the shape and direction of the project, but the buck doesn't stop with me.

In effect, my role is to make whoever commissioned me look good, not to undermine them. There's a business dynamic at work here: the best way I can make them look good is by delivering my best possible effort. The more I do that, the more I get invited to pitch for better quality work and the more word gets around that Leapfrog's a decent business to work with. The more that's the case, the easier it is to pay my mortgage and even provide some decent work for others.

Sometimes, work comes along where it's best just to bite your tongue, execute the brief well, and take the money. Take pride in what you do, but leave your ego at the door.

Next up on The Freelance Rules will be: Know your value.