I don’t read as many blogs as perhaps I should, but one I do follow is Rich Adin’s An American Editor (http://americaneditor.wordpress.com/). Rich is a tough-talking lawyer-turned-editor who looks at freelance editing as a business rather than an art and offers constant reinforcement for those who take a business-like approach to freelancing. He has made a number of convincing posts about the value of doing editing as a company with more than one editor on board, rather than working solo, and why that business model might be the wave of the future.
Choosing a business model is one of the basics of freelancing for any of us to focus on, either when we begin our freelance careers or sometimes when we’re well on the path to success as freelancers. Rich’s business model is that of a company owner with people who work for and with him; mine is that of the solopreneur.
Becoming an editing company makes a lot of sense for anyone who, in particular, wants to handle large publishing projects. A solopreneur or one-person firm can take on big projects, but probably not ones as huge as a company with more than one editor (or writer, proofreader, indexer, graphic artist, webmaster, etc.—whatever your niche may be) can tackle. I just turned in a 1,123-page book manuscript that I edited for one of my clients, and that’s about as big a job as I want to do. It pales beside a 20,000-page ms. that Rich mentioned recently, but it’s certainly more than the couple of dozen pages I usually write, edit, or proofread for most of my clients.
With smaller projects, the overall fees may not be as attractive as what a huge text might generate, but the work can be as profitable when you take into account the different level of effort or scale of project and the fact that the solopreneur ends up with the whole fee in pocket, rather than some of it going to employees or subcontractors.
Most of my writing work is for magazines, newsletters, and websites; I write articles and columns, for the most part—not books. Most of my editing and proofreading work involves articles and layouts for magazines, newsletters, blog posts, occasional book-length manuscripts for trade associations, website content, and other relatively short or small-scale assignments. A company might not find such projects worth doing. I enjoy working on them and I make enough money on them, especially because I work fast and efficiently (as well as accurately!), to pay my bills and have a comfortable profit margin as well.
There have been times when I’ve been offered a project much larger than what I normally work on or that I prefer not to handle for some reason. Those are the times when it might be useful to be a company with employees or subcontractors already in place. However, thanks to my history of networking over the years, I can turn to colleagues who might be comfortable working together or on such projects.
Editing colleagues who work with MA and PhD students or academic authors trying to submit manuscripts to journals often do quite well as solopreneurs on projects that would not be big enough for a company, or whose authors might not be able to afford the fees of a company. Of course, some of the financial aspect is a matter of perception and assumption; a large editorial company might not charge that much more than a solo freelancer, but a lot of prospective clients assume that companies will be more expensive than individuals. Individual freelancers can often use that as a bargaining chip when negotiating with prospective clients.
It can be difficult to find individual clients who will pay enough to be worthwhile for solopreneur editors, and the expanding world of self-publishing may mean more and more authors who don’t think they need editors, rather than more and more who understand the importance of editing to make their work its best. But some of us do well in working with such clients, once they find us or we find them.
If I had a business partner or employees/subcontractors, I could and would take on much bigger projects, but I also would have a whole new layer of administrative responsibility that I don’t want! Having a company means finding, vetting/testing, hiring, training, overseeing, and paying the people who do some or all of the editing work, as well as finding projects big enough to support a staff or network of subcontractors. Only some of those tasks can be handled by someone other than the head of the company. I would rather spend my time doing the actual editing work; the billing and related aspects of my business are nominal compared to what I assume such administrative activity is for a larger-scale editing company.
I’m open to reconsidering how I structure my business over time as the markets evolve, but for now, my solopreneur model is working nicely for me, both personally and financially. STC colleagues who are considering freelancing can look at the pros and cons of being companies rather than solo businesses and pick the business model that works for them. Keep in mind that the solopreneur can always branch out into being a company at some point, and the company can always cut back and revert to solopreneur status if necessary.
STC member Ruth E. Thaler-Carter is a long-time, award-winning freelancer; author/publisher of “Get Paid to Write! Getting Started as a Freelance Writer”; author of “Freelancing 101: Launching Your Editorial Business” for the Editorial Freelancers Association; and owner of Communication Central, which presents an annual conference for editorial entrepreneurs every fall.
I agree with you, Ruth. I don’t relish the idea of managing other editors. My motto has been: Stay small; keep it all (after, of course, paying Uncle Sam, etc.)
Great blog post!
Some interesting points on the transition from being a freelancer to starting a tech comm services company. One of the challenges in addition to delivering the work is to keep the sales funnel full. I spoke on this topic at STC India Summit 2011, the deck is available at: http://www.slideshare.net/vingar/starting-a-technical-documentation-company.
We have to keep the “pipeline” full regardless of whether we’re sole proprietors or heads of companies.
True. Only that stakes are higher when we have a ‘company’ as an entity, when compared to working as a freelancer!
True, more people may be at risk when you have a company than if you’re a solopreneur, but either way, your business/livelihood is at stake.
Vinish, you make the same mistake that Ruth makes — company does not mean “has employees other than oneself”. Company is simply a business structure for purposes of taxation and presentation. Company does not require that one have employees for whom one must pay, for example, social security contributions or health care benefits. You can be a solopreneur who subcontracts but who presents yourself as a business entity other than a sole proprietorship. And, FWIW, the IRS views a sole proprietorship as a “company” for tax purposes; it is just a type of company within a panoply of types.
Yes, we do, but the effort required to do so is different and the frequency with which that effort needs to be expended is different. I’d rather have to put out the effort to find work every 6 months than every week.
Marketing is a constant process, whether one is a solopreneur or the owner of a company that employs others.
By the way, viable business models will be among the topics at “Be a Better Freelancer: Marketing Magic and More for Your Business,” the 2013 Communication Central conference for freelancers. Rich Adin will present the keynote on the future of freelancing, as well as a special four-hour session on the business of freelancing. And STC members are eligible for the colleague’s discount on registration! Details:
http://www.communication-central.com/2013/events/2013-conference/
First, Ruth, thanks for the pug for my An American Editor blog.
You wrote: “With smaller projects, the overall fees may not be as attractive as what a huge text might generate, but the work can be as profitable when you take into account the different level of effort or scale of project and the fact that the solopreneur ends up with the whole fee in pocket, rather than some of it going to employees or subcontractors.” I don’t believe this is quite right.
If you have a project that will take you 3 days to edit, it means that you must have another project already lined up to start on day 4 or you must take day 4 to do some marketing to find your next project, which might not appear until day 8. I understand that in your case, after many years of being in business, it is likely that you have a project to start on day 4, but I also know that there are times when you do not have that next project in-hand, ready to go. What that means is that what you earned doing your 3-day project has to carry you until the new project arrives on day 8. In other words, if you earned $300 for the 3-day project, you didn’t earn $100/day; you earned $37.50 per day ($300/8 days). (In fact, you actually earned less in both instances if we apply the Effective Hourly Rate formula which is a truer indicator of your real earnings.)
On the other hand, if I accept a large project that requires multiple editors but will take 90 days to complete, I will earn (a) 100% of whatever I bill for my share of actual editing; i.e., for those pages that I assign myself and edit myself, and (b) a percentage of the amount of the work performed by the other editors on the project who work for me. In other words, I have income coming from 2 different avenues albeit on the same project. In addition, I have a project that I would not otherwise have and I can determine how much of the work I do. I can even have the choice of assigning all of this project to other editors and collect a percentage of the billed amount while I work on a wholly different project for which I am collecting 100% of the fee.
But also important is that the length of time between working and having to find work is longer; I am not in a short cycle of work-no work-work.
The primary fallacy of your statement is that you conclude I earn less than 100% of the fee. In fact, I earn more than 100% because I earn 100% of whatever I would earn by my own work plus the percentage from the work performed by other editors.
I am not suggesting that my model is either the ideal model or one that will work for everyone. I am suggesting, however, that with the changes in the industry, my model warrants consideration and not out-of-hand dismissal.
One last thought: You arrange the battle as one between company and solopreneur. That is a false battle. Solopreneurs are companies too and need to look at their business in that manner. By labeling solopreneurs as something other than a company gives solopreneurs a false sense of what it is they are and how they need to conduct themselves in order to have a future in editing.
For those interested in more in-depth analysis and reasoning, this will be part of my presentation at the upcoming Communication Central conference in Rochester, NY. See http://www.communicationcentral.com for information about the conference. (I have no financial interest in Communication Central and my only compensation for my presentation is reimbursement for my travel expenses.)
I agree totally that a individual freelancer/solopreneur/sole proprietor has to think like and present him/herself as a business or company, and I encourage that mindset whenever I do my presentations on starting out in freelancing. Far too many freelancers don’t do so, and those are the ones who succeed less. I may use “business” rather than “company,” but I agree wholeheartedly – freelancers, whether operating independently or with employees/partners/subcontractors, absolutely must behave in a business-like way.
I don’t see this as a “battle”; it’s different ways or models of doing business. Neither is the only way, and neither is ideal for everyone. I do want to encourage solopreneur colleagues to think about whether they have the personality and the vision, as well as the necessary contacts, to expand from being on their own to creating a formal company that employs other writers or editors. It definitely has its rewards for those who have the personality and contacts to make it work.
DC colleague Gabe Goldberg said, in response to my similar article in the new issue of InterCom: “I’ve been an incorporated solopreneur since 1992 or so. LLC form of business wasn’t available then or I might have chosen it; a large client/customer (IBM) insisted on doing business with incorporated entities and incorporating was the best $500 investment I’ve ever made. There are advantages to being incorporated (either as Sub C or Sub S corporation) or being an LLC; they can all support one person doing business without other employees. I’m my company’s only shareholder, director, officer, and employee. That’s pretty clearly being a solopreneur but with advantages and disadvantages (paperwork, mostly) of being incorporated. Sub C/S corporations and LLC also provide different tax structures/advantages/disadvantages. ‘Company owner’ doesn’t necessarily mean hiring/managing others.”
Hi Danielle great answer, I love your cotcisnensy it’s so refreshing Quick question along the same line I target financial service professionals (mainly planners and advisors) what i’ve noticed is that they put their Admin Consultant/VA on their team but in the description/mini bio (of that person) they mention that they are business owners and some (most) even have a link back to the Admin expert’s site. How do you feel about that approach? I haven’t been asked to be added in that respect but would love your input as a reference.
Sorry for the delay in responding – this question just showed up.
Who is Danielle?
I don’t quite follow the question or how it relates to the original post, but … some freelancers might include virtual assistants or administrative consultant on their teams, and sometimes those people are part-owners of the business. We can always ask to be included in a client’s team as a consultant; many will be willing to do so and even include a link to the consultant’s/freelancer’s website. Several of my clients include my name in their magazine mastheads, and some include me in their websites.