By Eli Natinsky
IABCLA Vice President/President-Elect
Thank you to Jake White, principal consultant of Zaptin Communications, who hosted IABCLA’s Roundtable for Freelancers on June 26 via Zoom. He shared stories from his time as an independent communicator and offered advice to help others get started as freelancers. Jake also passed along resources that have been helpful during his journey.
A former chapter board member, Jake successfully went out on his own seven years ago. Before this, he worked both for agencies and companies in Los Angeles during a 25 year period. His career has been primarily in technology.
“As an independent consultant, you need to think like an entrepreneur — you are your own business,” he said. “Focus on your expertise and maximize your talents. Also, identify your target market.”
A. “Are you an indoor cat or an outdoor cat?”
Jake recalled an IABCLA event he attended where Victoria Dew, founder and CEO of Dewpoint Communications and the immediate past chair of the IABC International Executive Board of Trustees, posed this question to the group. She defined “indoor cats” as those who crave stability, like to receive daily meals, and look at the world from the comfort of their safe place. Someone who has a full-time job with an employer might fall in this group. Conversely, “outdoor cats” tend to be more independent in that they’re not sure where their next bite is going to come from, they live on the go, and each day is a new challenge. This feline is more along the lines of an independent consultant.
We all have different motivations, including income, health, relationships, environment, and the desire to work at home. Jake’s advice: before one becomes an independent consultant, they should first consider what type of “cat” they are.
B. Advantages / Disadvantages:
– Flexibility: Jake’s primary motivation for transitioning to full-time freelancer was the desire for a more fluid schedule, one that allowed him to head up assignments at the times that were best for him. Venturing out on his own also permitted him to work from home, so he no longer had to contend with long commute times.
– Choice: the aspect Jake liked most about being independent was the opportunity to work on projects that were most of interest to him. In the past, he took on a host of sales projects — trade shows, email campaigns, lead generation — but his real passion was dealing with that which supported branding and communication, such as public relations and content development.
– Isolation: there are times when Jake found he lacked the human contact that comes from being in the workplace. However, he makes a point to counter isolation by scheduling a networking lunch or coffee with a colleague at least once a week, as this allows him to build his network and leave his home office.
– Earnings: another challenge of freelancing is income instability and the fact that there’s little way of knowing the amount of income ones stands to generate year-to-year. This, of course, has tax implications and that’s why Jake offers this tip: one should place half of their professional income in a business account and use these funds to pay taxes. This money can also be used for IRA investments each year.
A. Differentiation: Jake suggested new freelancers narrow in on their talents, as well as the type of projects they’d like to handle. Having headed up marketing departments at various software companies, Jake had a variety of expertise to draw on — lead generation, trade shows, PR, content creation, social media — and he let perspective clients know he could perform all of these tasks. However, this worked to his disadvantage as would-be customers were often searching for certain expertise. It wasn’t until he focused on the IoT (“Internet of Things”) that his business took off – in fact, people began to seek him out once he established himself as an expert in this technology area.
B. Networking: Jake noted 75 percent of his work as an independent consultant has come from just five individuals, and he referred to this as his “Power 5.” He’s found when others make referrals it takes the pressure off of him having to be his own salesman. Folks need to let others know what kind of work they’re looking to do and that they’re available for hire, he suggested.
C. Clients: there are several employment agencies that specialize in hiring independent consultants, including M-Squared Consulting, Patina Solutions, Business Talent Group, and Resources Global Professionals. There are also many online platforms that list a variety of jobs, like Upwork, Catlalant, TalMix, Expert360, and Toptal. In fact, Jake has a client who will only hire him through Upwork, as they find it makes for a more convenient arrangement.
D. LinkedIn: people can increase their visibility on their LinkedIn profile by 40 times if they complete three tasks: populate the top section entirely (name, photo, headline), list at least two job experiences, and add five recommendations. If these three components are in place, it triggers an algorithm and provides higher search visibility. Also, people should indicate on their profile they’re an independent consultant and list their professional strengths.
E. LLC: Jake set up a limited liability company (LLC) to ensure he was protected should he encounter legal issues in the course of his work. Also, being a LLC adds a level of legitimacy. He found arranging an LLC through the State of California to be seamless and quick, as he went through Legal Zoom. The annual fee is $800, and the designation must be renewed every year.
F. Taxes: Jake advises freelancers in California to be paid as an independent contractor on a 1099 tax basis, rather than on a W-2 as one would if they were a company employee. The AB-5 or “gig worker bill” was recently signed into law, and it reclassified many independent contractors as employees. As an independent contractor, one must pay their own state, federal and business taxes. A positive to this 1099 arrangement is certain tax deductions can be made, including Internet, cell phone, laptop, and business software. In addition, they are eligible for the following retirement plans: 25 percent of income can be put in a SEP-IRA or a 401-K can be maxed out.
G. Rate: Jake recommended independent communicators price themselves accordingly and quote their rate with confidence. There is a need to get out of the mindset of how much one made per hour when they were a direct hire with an organization, as their employer was paying for their healthcare, 401K, disability insurance, and other such expenses. It should be explained to a client they’re saving money given they don’t have to pay such costs. Also, there are times when a higher rate is a purchase of not only one’s talent, but experience — a client may find someone with less knowledge or skill with a lower rate, but it may take them twice as long to complete a project.
He used the following formula to figure out compensation:
– Divide annual income goal by 2,000 (roughly the # of working hours/year)
– Multiply that by 2, 2.5, and 3
– That is your low to high range of billing rates
– e.g. $150K = $150, $187.50 and $225 per hour
Jake recommended the following services:
A. Business tax registration certificate & annual business tax for City of Los Angeles
B. 99Designs – logo package from $299 – $899
C. Jenny LaNicca – logo, website, letterhead
D. Jared Gold, Website by Tonight – $899 – $1299 flat rate
www.websitebytonight.com / firstname.lastname@example.org
G. PICA – Professional Independent Consultants of America
All Access Annual Pass is $395
Virtual sessions on topics such as “Getting Started as an Independent Consultant” and “Branding to Build Your Business”
Explore PICA’s online knowledge library for tips on marketing, business development, legal and contracting, etc. Some articles and templates are only for members, but many are open to the public.
Thank you again, Jake, for sharing your expertise and facilitating an outstanding discussion!
And thank you to those who are reading this for supporting IABCLA! The chapter is committed to helping communications professionals stay connected and build their careers during these challenging times. Please stay up-to-date on events and activities by visiting IABCLA.com, subscribing to the chapter’s newsletter, and by following the group on LinkedIn.