Tax Time

April 15th is only 2 weeks away. If you don't have a good accountant then I'd suggest contacting my friend Kevin whose contact info is listed on the right side of this blog as soon as possible. Don't forget you can always file for an extension.

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It's All About Leverage

Just over a year ago I announced that I had agreed (for the first time in my freelance career) to lower my hourly rate in order to stay afloat financially. In total I was asked by two tiny shops and one large agency to lower my rate. I agreed to the two tiny shops, but thankfully I managed to avoid lowering my rate with the large agency. The reason for this was because work had picked up, and I was able to use that fact as leverage. "If you don't want to pay me my normal hourly rate, then I'd be foolish not to go down the street and work for another shop who'll pay my rate." They really needed my help, so they agreed to pay my rate. Considering the shape of the economy at the time, I got lucky.

Leverage is a wonderful thing when it works in your favor. In 2009, a lot of shops used the poor economy as leverage to beat up freelancers on their hourly rate. And that leverage worked on the majority of freelancers that I talked with. But the new year has brought us new fortune, and now the freelancers have the leverage to demand their normal hourly rate again. From what I've seen there is far too much work out there, and simply not enough people to do it. I was at an agency several weeks ago and counted at least 10 freelancers of different capacities walking around. After talking with several of them, I found out that they were currently working at a reduced hourly rate. I was shocked given how much work there is, but after last year I guess it's not surprising to see folks just happy to be working at all.

I've been waiting for the second quarter of this year to arrive as the bean counters will be sharpening their pencils, and analyzing how well the first quarter went. I'm no economist, but judging from the amount of work now, there will be no slow down in the second quarter. Regardless of what the future holds, the market is tipped in the freelancer's favor right now.

Extended bookings aside, if you're currently working at a reduced hourly rate, then you really need to consider some quick renegotiation. It's simple economics. If you can't get the rate you want then just go down the street and get it. The work is out there, and that's all the leverage you need for a fair shake.

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More Advertising Humor...

Enjoy...



BTW, that little girl was totally asking for it.

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If It Weren't So True I'd Laugh

Pretty funny (in a really depressing way) despite the PG13 language...



YouTube has a lot more of these as well.

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Is a Day Rate the Answer?

I've been asked by fellow freelancer Joe Criscuolo if he could contribute to The Daily Freelancer. So I said "Sure!". Anyhow, here's Joe's first submission.
Enjoy,
Slim

Is a Day Rate the Answer?
by Joe Criscuolo

I think we can all agree that day rates suck. Or do they?

I mean let’s face it, for us career freelancers, a day rate is tantamount to career suicide! But, in our current wonderful and vibrant economy – sarcasm intended – we would be remiss to cast aside any deal because of a day rate.

So, what’s a day rate anyway? Well, it’s basically when a client (you’ll recognize the client if you look over your shoulder – he’s the one administering jail house justice) asks if you could adjust your rate from an hourly standard to a daily or weekly standard. For example, a freelancer who works at an hourly rate of $65 per hour accepts a (often lower) rate based on a gross rate of let’s say $600 per diem. If that freelancer works a ten-hour day, his hourly would be $60. The client will save $50 and the freelancer would secure the gig.

Granted, that’s a potential $250 loss for you on the tail end, but also a $3,000 guarantee for the week! Let’s see… don’t accept the day rate and lose the $3,000 because of a $250 net loss, or take the loss and get a mortgage payment in one week… Hmmmm, tough choice. Boy those day rates suck! Again, sarcasm intended.

So, what’s the problem with this scenario? The client is happy, the freelancer gets the gig, and the world gets to be saved yet again by some lame form of advertising that will either end up in the proverbial ass end of the ‘social collective consciousness’, or even better, buried in a landfill on the island of misfit POPs.

Simply put - emotions.

Emotions are, in fact, the mortal enemy of the career freelancer. If we could somehow surgically remove the emotional center of our cerebral cortices, we might have a fighting chance for survival in this dog eat dog world of advertising. Hell, it would make saving the universe one standee at a time more palatable.

The problem for most of us career freelancers is our inability to adjust to the challenges of being our own boss. I mean, let’s face it, once we dive into the freelance pool and taste of its waters, very few (if any) of us ever go back to the rigors of the daily art director’s routine. Sadly, many of us have great difficulty making the transition from worker bee to principal. Many more still haven’t made the realization that they are no longer part of the ‘machine’ and continue to carry within them the deep, dark emotions that come with being a career creative person.

As a business owner of many types of businesses, I can safely say that the key component that separates the winners from the losers is one’s innate ability to check his emotions at the door and function in a pragmatic and rational manner consistent with one who owns a competitive business.

Here’s an example: If business A advertises lower prices and better benefits over business B, who will invariably get the business? That’s right, nobody because the economy sucks! But when things are great, usually it’s business A. Now why is that? Pretty simple, in a competitive capitalist market, our goal is to stand out and be better than our counterparts by offering a variety of goods and services at competitive prices. Why should we be any different? I’ll tell you why we aren’t – because we are emotionally attached to our wares.

“But wait, I’m better than that other schmoe and should get a better rate – screw this day rate garbage! If they want me, they’re going to have to pay for me, period! Top dollar even!”

Fantastic. Keep thinking that way - because all the business you lose fostering that emotional attitude just makes me richer. Okay, maybe not richer because that would imply I’m actually making money. What I’m saying is that when we inject emotions, or rather, fail to extract our emotions, we become just like any other caged art director but without the benefits, perks or false sense of security.

So, in short, are day rates a bad thing? My answer is no, but that’s because I’m a businessman and treat what I do, and who I am, as a business. I disconnect emotionally and allow the rational to override the emotional. If a deal needs to be made, I will make it. When you realize that you didn’t get the gig and hear through the grape vine that I’m working, it’s for that reason.

This doesn’t mean that I am dispassionate about my work and the quality of my product. Quite the opposite. I love what I do and the products that I provide. I just learned many years ago that the caged beast is one who fails to flee when the net is cast. I’m not sure what that means, or how it pertains to this article, but the moral of this story is simple: be firm, be professional and don’t shun something new simple because it might tinker with antiquated habits. Day rates may not work for some, but for most of us it could be a way into a new agency and a means to an end in this crazy world of advertising.

Joe Criscuolo

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2010 - Is The Slump Over?

Given how 2009 went I've been shocked that 2010 has started off like gangbusters. Kinda weird how as soon as the ball dropped in Times Square that my phone hasn't stopped ringing. I've been booked almost every day since Jan 1st (at my normal rate), and not by the little guys either. This past week I turned down 2 jobs in one day because I was already booked up, and I'm also getting booked for a couple weeks at a time instead of a day here and there. This hasn't happened to me for over a year and a half. Apparently, a lot of agencies have been winning pitches and the work is pouring in. Even though there are plenty of folks waiting to be hired, freelancers are still needed to fill in the holes until those hires can be made. In addition to the new business coming in, it seems that existing clients are really starting to open their purse strings as well, which translates into even more freelance work.

I know that it hasn't even been 2 months yet, but from what I'm seeing the industry looks like it's starting to turn around. Here's to hoping that 2010 will quickly erase the memory of 2009 from our collective memories.
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Freelancer Party On Hold!

As mentioned previously, I had every intention of hosting a holiday freelancer party. Over the past 5 or 6 weeks I have found out that quite a few fellow freelancers have taken full-time staff jobs, and know of a couple who have left the biz entirely. I'm now trying to find out who is still a "Career Feelancer" and who isn't. Once we iron that out then it'll be time to celebrate the fact that we're still alive and kicking. After all, it won't be much of a party with half a dozen people standing around wondering where everyone is! Stay tuned...

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2009 In Review - Part 2

In addition to the changes that the bad economy brought to the overall freelance industry in 2009, I also wanted to mention several things I did to help keep my lights on. To compensate for the lack of income, I found myself trying to save money in every way possible. Downgrading phone and cable services, refinancing our mortgage, keeping the heat turned down and using coupons at the grocery store were only a few ways to save a buck. These savings made a huge difference and allowed me to upgrade both my computer and phone - both of which were totally out-dated. I do my own bookkeeping, but I've found that a good accountant can result in more cash back at tax time. I also found a mortgage broker that I trust, and refinancing has saved us hundreds of dollars each month. Note: I've listed the contact info of both my accountant and mortgage broker to the column on the right under "FREELANCER FINANCIAL RESOURCES". And no, I don't receive a commission.

Shopping around to find the best insurance, as well as not letting credit card companies bully you will also save quite a bit of money. I recently received a letter from CITIBANK stating that they plan on charging an annual fee of $60 a month to "maintain quality service". This is the second or third notice I've received from a bank/credit card company trying to squeeze me for a few extra bucks, and it's total bullshit! The way I see it is if I have to cut my hourly rate in order to stay in business then a bank who has received a Federal bailout can eat any extra operating costs. There are plenty of other credit card companies out there competing for my dollars, and I'm sure I can find one who won't try to screw me out of my hard-earned cash as badly as CITIBANK is!
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2009 In Review

I've been meaning to update The Daily Freelancer for quite some time, but unfortunately I've let this blog "wither on the vine". As fellow blogger Kathy can attest, it's hard to find the energy to post comments to a blog that has little to no following. But, as I'm still freelancing I guess I'll try and keep posting whenever I can.

Regarding '09...
Looking back, I think most of America would rather forget 2009 from an economic/business stand point. The Career Freelancers working in the promotional industry certainly weren't alone. Talk to anyone and they'll all say the same thing... 2009 was the shittiest year they've ever had. Last year the theme of my posts all revolved around how the poor economy was affecting our industry; lowering your hourly rate, creating a freelance union, competing with freshly laid off Art Directors, doing pro-bono work, etc. These posts highlighted just how grim the situation was. So why bother recapping such a shitty year? Because the landscape of the freelance market changed dramatically in 2009, and those changes have carried over to this year. As a Career Freelancer I think it's important to monitor and adapt to these changes in order to remain a viable resource.

What was the biggest change? In my mind, the fact that a lot of agencies used the poor economy to strong-arm freelancers into lowering their rates. The bottom line here was that everyone from Toyota to Disney to the local bakery slashed their prices to stay afloat. Any freelancer that thought they could maintain their established hourly rate in the face of this economy was delusional (myself included). Four out of the six agencies I worked at last year beat me up on my rate. And when I say "beat up" I mean a $15 to $20 hourly rate cut (sometimes at agencies that were over an hour drive away). You'd expect this from the smaller "Mom & Pop shops", and I guess I wasn't that surprised when one of the Promo Top 10 agencies pulled the same shit. Fortunately, I was in demand at the time (blind luck), and was able to push back and get my normal rate. As predicted, lowering rates has unfortunately set a precedent where the new lower hourly rate is now the standard. The only thing that will reverse this is an upswing in the economy.

Another big change was the massive influx of out-of-work staffers who jumped right into the freelance market, and fell in love with freelancing. Overall, this was a huge hit to the established Career Freelancers, and the impact is still lingering. As a result, quite a few Career Freelancers have taken staff positions, or left the field entirely. It may seem that this doesn't equate to anything more than the promotional industry version of musical chairs. However, the market is still saturated with "fake freelancers" who are competing with Career Freelancers until they find a staff position.

Unfortunately these newly-minted career freelancers have no point of reference regarding income earned as a "temp employee" (W-2) versus as an independent contractor (1099). To them it's all work, and at this point any work is better than no work. In a slow economy this is a valid point. However, when the economy turns, it would be in their best interest to fully understand the economic disadvantages of working as a temp employee.

The only real positive note I saw in 2009 was that a lot of smaller shops were getting a lot of new business, and they didn't hesitate to call in help. Obviously a smaller shop is going to offer their services for a lot cheaper than the big guys, and it paid off for them. As stated above, these small shops want you to lower your rate so they can stay competitive and maximize their profit. It's not easy for a freelancer to make these kinds of concessions, but it's necessary to keep the lights on.

In a nutshell, I'm glad 2010 is here.
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Happy Holidays From The Daily Freelancer!

Greetings fellow freeloaders! This year has come and gone in record time (or so it seems), and now it's time to gather with friends and family to celebrate the holiday season and ring in a new year. I'd like to apologize for not posting more often, but life (unfortunately not work) has taken priority over any well-intentioned blogging. I'd also like to apologize for not organizing a freelancer holiday gathering as I promised I would. I have not given up on a freelancer summit and am planning on putting something together in late January or early February - whichever comes first. Until then, I hope you all have a safe and happy holiday!
Regards,
Slim

Freelancer Survival Part 2 - Phone Upgrade

Evolution Of The "Monkey Phone"...



Yep, I finally upgraded my phone too. Another situation where as a freelancer I couldn't get by using broken, out-dated equipment. After being openly mocked for using a phone with an antenna, I walked into the Apple store where the sales staff mocked me one last time. I left the store in even more debt, but at least now I knew what an "app" was.

To my shame, I realize that I'm probably the last freelancer on the planet to adopt this modern technology. Obviously, going from a phone with no internet connection, camera, antenna, etc. to the iPhone was an instant benefit for my business. The 100,000 apps (some of which aren't games, and can actually be used to help run your freelance business!) are just icing on the cake. Unlike trying to get the most miles off of your computer, this is one instance where not staying current with technology can really hinder the effectiveness of your business. Lesson learned.

Freelancer Survival Part 1 - Equipment Upgrade

Back in January I wrote an article about the MacWorld convention and how Apple had failed, yet again, to deliver on their promise of the mythical Power Mac which would break the 3GHz barrier. I was shocked that a company (especially Apple) had still not managed to produce what they had promised 6 friggin' years earlier. This infuriated me as I had been wanting to upgrade my system for years, but was waiting for "the next big thing". I ended my remarks about the MacWorld convention with... "Unfortunately, I'll probably end up with some half-ass, stop-gap system whose overall performance is marginally better than what they put out over a year ago." Sure enough, in March Apple unveiled it's latest and greatest offering which was exactly what I had anticipated. A nominal speed bump to their previously released system. The big news however was the fact that their latest systems were now the highest priced Macintosh computers ever sold - a whopping $6,100 for their top-of-the-line model!

Now the computer I was using at the time was a gray and white G4 that I bought back in 2000. Over the past 9 years I upgraded the internal components two times, bringing it to a point where further upgrades to either the hardware or software was no longer possible. Even after 9 years the computer functioned flawlessly in every aspect. Unfortunately, I was running into compatibility issues with agencies who would send me CS3 or CS4 files that I couldn't open with CS2. I knew that if I was going to continue working from home I needed to bite the bullet.

I looked at every possible Mac configuration 10 times a day for weeks on end. I checked out iMacs, Power Books, used Intel-based Mac towers and even considered buying a "Hackintosh clone". I ran all the numbers and considered every price range. I hung out in all the Mac forums to see which models were having problems, and read through all sorts of bench mark speed test results. Yes, I know. I'm a Mac nerd. Anyhow, in the end I did what I always do. I bought the most powerful Mac tower available.

I've had a lot of folks ask me why I would spend so much money on a high-end tower when an iMac or laptop can handle much of the work that we do these days. Yes, a laptop or iMac can perform many creative needs, but for how long? A computers longevity represents increased profit. Case in point; my old G4. In 2000 I bought the top-of-the-line model which generated income for the better part of 10 years. For the record, this is remarkable given the sheer amount of work that I've produced on it. I know for a fact that this wouldn't have been possible with any iMac or laptop as they lack the expandability that a tower has. Yes, I had to cash in two 401Ks and drain my bank account to purchase the new Mac Pro, but I firmly believe (and have experienced first hand) that spending more money up front can save twice as much (if not more) in the future.

So did I do the right thing? So far, yes. I barely had time to install all the new software when I picked up an illustration job. The illustration was for a beer mass display that needed to be built hi-res at full size. While I did see a few progress bars I sure didn't see them for long. The new Mac Pro handled the huge Photoshop file (5GB working size) like Sally Struthers handles a Twinkee. Considering that I went from an old G4 to a new Mac Pro, the speed increase is incredible. Obvioulsly, I doubt that anyone who is currently using a newer Intel-based G5 or Mac Pro would see the performance gains that I have. I've been using the Mac Pro for several months now and have had no major issues other than an application or two unexpectedly quitting. I'm using CS4 and the latest Snow Leopard OS, and both have been working well. The little work I have had so far has paid for a good portion of the equipment, and the tax write-off will be significant. I'm keeping my fingers crossed that I'll pick up some work to pay off my debt, and look forward to rockin' this new Mac for the next ten years!

Sign On The Dotted Line

I started freelancing at an agency that I haven't been to in quite a while. Of course there is the usual stack of papers that needed to be signed first, like the standard confidentiality agreement, W-4 forms, etc. However, there was one multiple-page document that really caught my eye. A non-competition agreement.

The first two paragraphs of the agreement specifically state that you, as an independent contractor, will not engage in any type of activity that represents a conflict of interest to the agency, including employment or freelancing for any other agency or client. The term of this agreement (get this part) is for two years after the agreement has been signed.

I'll now wait until you all stop laughing.

The contract goes on to specifically forbid all sorts of things that are, for all intents and purposes, the life blood of working as a freelancer. Did I mention the 60-day terms on payment? Right. Suffice it to say that I refused to sign this nonsense.

I'm sure there are many folks out there who just may sign an agreement such as this and think to themselves, "So what? I'll just sign it, and do what ever I want to. No one will ever know the difference! After all, if I don't sign it then I won't be able to work here, right?" Wrong. Don't fool yourself into believing this is just another piece of paper. You'll be signing a legal and binding contract that a bunch of high-paid attorneys spent hours writing up and revising. And as we all know this is a really small industry and everyone knows EVERYTHING.

No freelancer or staffer should ever sign one of these, no matter how much pressure there is to sign it. Once you sign it you immediately forfeit your legal right to effectively operate your freelance business, or find another staff job while under the 2 year term limit. It's pure horse shit, but that won't stop certain agencies from browbeating you into signing something that will be in your worst interest. This isn't the first time I've rejected this type of agreement, and I doubt it will be my last. And even though I have always refused to sign it, I have never been refused work because I didn't sign it.

Comments and Contributions

Just a quick note...

Anyone who is interested in contributing to this blog (either by writing articles or simply by suggesting topics) please send me an email with your thoughts and ideas. Your input is most welcome. I know we have a few "lurkers" out there, and I'd like to invite them to post comments or suggestions as well.

As far as posting comments goes, you can either post anonymously, or by leaving your name. You do NOT need to create an account to comment on this blog. Obviously I would prefer if you would leave your name when posting comments just as a courtesy so I know who is saying what.

Thanks and I hope to hear from you soon!
Slim