20 Years Later: Freelancer or Entrepreneur?

In my “From the Editor” column from the January/February 2002 issue of Resume Writers’ Digest newsletter, I talked about the difference between being a freelancer and an entrepreneur.

Twenty years later, it’s still a great topic. 

As a resume writer, do you want to be a freelancer or an entrepreneur? (There is a difference.)

Here’s the original column:

Many self-employed professional resume writers consider themselves to be entrepreneurs when, in fact, they are more likely freelancers. Does it matter? Changing how you define yourself might create more opportunities, lower your stress level — or both.

Without resorting to the dictionary definitions of each term, let me try to explain the difference. Entrepreneurs are trying to build and sustain a growth-oriented enterprise. It is their goal to grow. These are the resume writers who hire subcontractors, affiliate with major career sites, and aim to make more than $150,000 from resume writing. 

Then there is a freelancer. The freelancer wants to derive a living from resume writing — but not necessarily be the biggest or the best. The truth is, most resume writers are freelancers. They contract directly with clients and/or write for others as a subcontractor. They can be home-based, office-based, or both.

The key difference is that they don’t take on more work than they can handle themselves. If they start to get busy, they raise their rates, or refer prospective clients to a colleague. They don’t start looking for subcontractors, or more office space.

Acting like an entrepreneur when you’re really a freelancer can cause you many sleepless nights. You read about some of the biggest names in the business and dream up strategies to conquer the town — or your chosen niche. But if you realized that goal and suddenly had dozens of new clients each day, would you be happy working with them? You wouldn’t necessarily have to become a resume mill, but if you enjoy total immersion with a select few clients each week, you’ll have to adapt your style to emphasize volume.

How you view yourself — freelancer, entrepreneur, or entrepreneur-in-training — will determine how you manage your time, market your services, and run your business.

Take a look in the mirror and answer this question: Which are you — freelancer or entrepreneur?

A note from 20 years later:
The results of the Resume Writers’ Digest Industry Survey suggest most resume writers are freelancers, working with 2-3 new projects per week. But the good news is, if you want to be an entrepreneur and expand your work with subcontract resume writers, it’s easier than ever. You can work with writers around the country — or around the world — from your home. No need to “look for more office space.”

Looking to work with subcontract resume writers? Contracting writers can get a free listing in the Directory of Subcontract Opportunities, one of the “Making Money as a Resume Subcontractor,” resources available to Bronze members of BeAResumeWriter.com. Submit your information here. 

How to Get Started as a Subcontract Resume Writer

 

Fifteen years. That’s how long ago I published the first edition of “Making Money as a Resume Subcontractor.” But that was probably five years after I actually started writing resumes for a contracting writer. I also wrote for CareerPerfect from to May 2004 to October 2008. But before that, I wrote for a solopreneur contracting writer. Along the way, I earned between $500 and $2500 a month from my subcontract writing.

Before, during, and after my subcontract writer phase, I also worked with my own clients. Many subcontract writers do the same. They write as a subcontractor to smooth out the peaks and valleys in their own client load and income as they build their business. Or they want to get exposure to writing for a variety of different types of clients while seeing how another writer or firm operates their business.

But with so many resume writers feeling burned out these days, there’s a third reason to subcontract: To focus on the writing instead of the marketing and business management. Sometimes, you just want to write resumes, not spend your time creating content to attract jobseekers and filling your days with talking with prospects. 

If you’re interested in learning about how to get started as a subcontract resume writer, I’ve got you covered. The 51-page “Making Money as a Resume Subcontractor” special report addresses it all.

Chapters in the special report include: 

• Who Are Subcontractors and What Draws Them In?
• Show Me The Money! (Compensation for Subcontractors)
• Client Interaction & The Information-Gathering Process
• Managing Your Business: Can You Market Yourself and Subcontract?
• Signing on to Subcontract
• Comparing Contractors: Big or Small?
• Once You’re In, How to Stay in the Contractor’s Good Graces
• Don’t Forget Legal Issues
• Other Subcontracting Opportunities
• Golden Nuggets: Benefits of Subcontracting
• Keys to Success as a Subcontractor: From a Contractor’s Perspective
• Words of Wisdom from Experienced Resume Writers
• Results of Survey of Subcontract Writers
• Red Flags When Selecting a Contracting Firm
• Making a Pitch to Subcontracting Firms (including a sample Resume/Cover Letter)
• Your Contract
• Seven Profiles of Subcontract Resume Writers

Even if you’ve never thought about subcontracting before, there might be a subcontracting opportunity that is the right fit for you right now. One way to know is to check out the 25+ listings in the Directory of Subcontract Opportunities.

Each listing includes the following information:

• Specialization (what kind of clients does the contracting writer/firm target, and what services are provided)
• Client fee (what the client pays, not what the subcontractor gets paid)
• Writer qualifications (desired/required)
• How to apply
• What spells rejection for a candidate
• Special requirements
• Turnaround time for projects
• Pay to subcontractor
• Demand weekly (# of projects)
• Client management (client contact vs. ghostwriting; also, if the contracting writer uses a CRM)
• Phone consultation? Paid extra?
• Do writers upsell?
• Revisions? (how are revisions handled; included in pay or compensated separately?)

The Making Money as a Resume Subcontractor Special Report — and the 25+ listings in the Directory of Subcontract Opportunities — are INCLUDED in Bronze membership on BeAResumeWriter.com. There are opportunities with no client contact — and some with. Some offering 1-2 projects a week … or 1-2 a month. Some that pay as little as $75 per project, but some that are $500+. Like I said, there’s something for everyone, even if you’ve never considered subcontracting before.

Join as a Bronze+ member for $27/month or as a Bronze Annual+ for $279 a year. 

You’ll get full access to the “Making Money as a Resume Subcontractor” resources, plus all the other benefits of Bronze membership:

• New done-for-you content each month (Pass-Along Materials)
• A Special Report to help you with some aspect of your bsiness or work with clients
• A Profession-Specific Career Worksheet (licensed from Evelyn Salvador), based on member votes
• Two new Content Checklists each month to help you create client-attracting content
• 30 Ready-to-Use Social Media Graphics (conversation starters, inspirational quotes, and month- and holiday-related themes)
• Discounts on Resume Writer’s University courses (including the signature “Pricing Right” course)

Learn more here.

Note: If you are a contracting writer looking to connect with subcontract writers, fill out this online form to be included in the Directory of Subcontract Opportunities.

Q&A: I Think Subcontractors Aren't Getting Paid Enough

I sent out an email last week to promote a subcontracting opportunity for one of my listings in the "Making Money as a Resume Subcontractor" membership program and received the following response.

I think the 20% to the writer is the wrong way around. Especially for only a couple of assignments per month.

A fairer business model would see the writer getting 80%+ and the originator getting a 10% - 20% “finder’s fee”, based on the premise that the writer is doing the majority of the work. Also, I think the client gets a better result when the writer interacts with them directly, rather than adding links into the chain of communication.

Having said that I am definitely interested in subcontract work and will check out your site and the YouTube.

Just my two cents!

– G.S.

Compensation for subcontract writing projects generates a lot of controversy.

Ask a subcontract writer, and they will tell you the pay is too low. Compensation is generally ranges from 20-35% of the project fee. Factors affecting the percentage include: the amount of client contact (and whether writing from worksheets vs. conducting the phone intake session) and whether the subcontractor or the contracting writer handles revisions. In general, the more client contact and the more of the project the subcontractor handles, the higher the percentage the subcontract writer receives.

Ask a contracting writer about compensation, and they'd remind you how much more goes into the project than the actual writing of the resume. There is marketing and client acquisition time and costs, selling the client on the project and fee (including determining project scope), getting payment and onboarding the client, conducting the information-gathering process, and managing the project through completion, including project finalization. There's also the risk of chargebacks, which is almost always fully realized by the contracting writer, with the subcontact writer paid regardless.

The author of the question above raises several excellent points. Skilled writing should be compensated well. How much better? I would argue that 30 percent should be the mininum amount, and that should be writing from worksheets with no client contact and no revisions. A project with direct client contact (including conducting the intake session) should be compensated at a higher rate than a ghostwriting opportunity.

But it's never going to be an 85/15 or 80/20 split in favor of the writer. The industry standard for compensating referrals is 15%. That's the "finder's fee" model the original email referred to. But that's very different from subcontracting.

It can be tough to find a qualified (especially a certified) writer who will work on a project for less than $200 (their percentage). At current rates, that means the contracting writer would have to charge $600 (at 35%) to $1000 (at 20%). With the industry average for resumes currently at $500-$600, that doesn't leave a lot of wiggle room.

One more point: The author mentioned "especially for only a couple of assignments per month." Many subcontractors only take on a few assignments per week or month. (The industry average for most writers, according to the Resume Writers' Digest Annual Industry Survey  is 1-2 projects per week, or 4-8 projects a month.) Many resume writers pursue subcontract opportunities while they build their own client base, to smooth out the peaks and valleys. Most subcontractors are looking for extra income, experience, and the opportunity to learn how other writers run their businesses and interact with clients. Some subcontract full-time (or as their only work), but that's not the majority of subcontract writers.

Interested in subcontract resume writing? Check out the Making Money as a Resume Subcontractor membership site. Your annual membership includes the "Making Money as a Resume Subcontractor" special report (with information for subcontract writers about compensation, project management, and more -- and profiles of other subcontract writers), plus access to the Directory of Subcontract Opportunities, with more than 25 full listings for subcontract writing (with more being added and updated all the time).

What is a "Fair" Referral Fee for Resume Writers?

I got a couple of questions from a resume writing colleague today about referral fees, and I wanted to share my answers in today's blog post.

Securing Referrals Special Report

* Can you please advise what is the prescribed fee amount/percentage range that one should offer another career professional for a referral (career service) that would be fair? (Is there any minimum and maximum offered?)

Referral fees are negotiable. 15% is the most common referral fee, but I've seen anywhere from 10-25%. 

One thing to consider when you're deciding what percentage to pay as a referral commission for being sent prospects from a colleague is: What is the QUALITY of the referral? If someone sends a client to you who is pre-qualified and pre-sold (meaning they're a good fit for you and they're ready to buy from you based on what the referring person said), that's worth it.

There's a mathematical way to figure this out, for the most part. You can add up what you're spending (in money and time) each month, and divide it by the number of clients you secure yourself. For example, you might spend 1 hour/week on marketing and $100 on your marketing (website, paid ads, etc.). Let's say you value your time at $75/hour. So that's $75 x 4 = $300/month (time) + $100/month (hard costs) = $400. Let's say you secure 6 new clients/month. So divide $400/6 = $66 (cost to acquire one client).

Let's say that referral partner sends you a client that pays $500/project. Your 20% referral fee would be $100. But remember, unlike your own marketing costs, you only incur this "marketing expense" if you secure the client. With your other marketing costs, you spend $400/month and might get 0 clients out of it. (Or, things might go really well, and you get 10 clients out of it!). But the advantage with referral commissions is you only pay them when you're making money (the other 80%). 

* Are referral fees always required or mandatory? For instance, I offered a referral to a resume writer once for a client that I was not able to take due to other deadlines. However, I did not charge a referral fee upon the client retaining her service. 

No, referral fees are not always required or mandatory. As the referring person, you can always request a referral fee, but it's not mandatory. HOWEVER, thinking of that resume writer, wouldn't you be MORE likely to send clients their way if they HAD sent you a 15% referral commission (even if you hadn't asked for it?) Or even some kind of thank you?

* Are referral fees based on certain factors, or more on the negotiation or agreement between two career professionals what is suitable?

Just like with subcontractor fees, I believe that the more "work" one party does, the higher the compensation should be. For example, subcontract writers who have direct client contact (including conducting intake interviews) should make more than subcontract writers without client contact (and who work from questionnaires). However, because there is no standard in the industry, this isn't always equivalent.

In an "ideal" world, I think it would be:
10% referral fee -- pass along the name of a colleague

15% referral fee -- "normal" amount of selling -- give name/contact info and some information about the resume writer to convince the client they're a good fit

20% referral fee -- going above and beyond -- information about why this resume writer would be a good fit plus introduction of client directly to resume writer

The reason why I generally think referral fees should be 20% and under is that now you're getting into the "subcontract" rates territory. When you'd pay 20% to another writer to create the actual content for the client (again, subcontract fees are generally 20-35%), I think that's the top level. But I have seen some writers who offer 25% referral fees.

In the affiliate marketing world, referral commissions can be up to 75%, but usually these are for set programs (webinars, courses, group programs), not custom services.

If you're looking for more information about eliciting referrals from colleagues, check out this special report:

Securing Referrals: How to Get More Referrals From Other Resume Writers

If you're interested in learning more about subcontracting as a resume writer, check out:

Making Money as a Resume Subcontractor

Why Subcontract?

I've been a professional resume writer since 1996, but in the early 2000s, I decided to supplement my own business marketing with subcontract resume writing. I no longer work as a subcontract resume writer (my own business took off too much for me to continue writing for others), but this is a topic that continues to interest me.

In 2007, my colleague Diana LeGere collaborated with me to write a report on subcontracting, "Making Money as a Resume Subcontractor." We just published the fifth edition of the report, and I wanted to address the second biggest question I'm asked by folks considering subcontracting. (I'll do a blog post later about the BIGGEST question, which relates to subcontract writing compensation.)

The second-biggest question 

I get is 

“Why should I subcontract?”

There are a couple of reasons that I give resume writers considering subcontracting.

• You want to supplement the income you're earning from your own resume writing business. Resume writing can be a "feast-and-famine" business. Subcontracting can help fill in the peaks and valleys, giving you the opportunity to stay busy -- and earn some extra money -- when your phone isn't ringing (or your email isn't pinging).
• You're getting started in the business and you want additional experience. Especially when you are new in the business, you need to write more to improve your skills -- and to learn which kinds of clients/projects you don't want to work on! (After 20 years in the business, I specialize in sales, marketing, PR and advertising clients primarily and I do not write technology resumes or military-to-civilian or federal resumes. Live and learn!)
• You are tired of client management hassles. An emerging area of subcontracting is individuals and firms that ONLY subcontract write. Don't like marketing? Just like writing? Subcontracting may be for you! (I can't promise you won't work with any PITA clients, but at least you'll have your contracting writer to help intervene.)
• You can learn how to manage your own resume writing business better. Individuals who employ subcontract writers have figured out many of the systems and processes involved with client management and business operations. You can get a peek into how they work and adopt these practices in your own business.

If you have questions about subcontracting, I'd like to help answer them! I'm offering a free webinar next week as part of the launch of the "Making Money as a Resume Subcontractor" membership site. You can register for the webinar here or check out the MMRS membership site here.

Is Subcontracting Right For You?

http://bearesumewriter.com/MMRS

One of the biggest issues for new resume writers is the "feast or famine" nature of the work. As you're working to get your own clients, you may consider working as a subcontract writer for another resume writer or a resume writing service (often referred to as the "contracting writer" or "contracting firm."

How do you know whether subcontracting is right for you? Here's some things to consider:

• Are you self-motivated? You need to be the type of person who can get work done when it needs to be done. If you've been assigned a project and a deadline, it's up to you to decide when, where, and how to get it done.
• How are you at managing your time? You'll need to estimate accurately how long any one resume will take you to write you -- and be able to do this with multiple clients. How will you handle things if you get your OWN resume client while you have three subcontract projects to write? Deadline management is critical as a subcontractor.
• Can you work with different personalities? Whether you're a subcontract resume writer or not, you're not working with just one individual at a time. However, it's important that you get along well with your contracting writer (or your contact at the contracting firm). 
• Do you have your own tools? I'm not talking about hammers and nails. You'll need a computer, Internet connection, and software (Microsoft Word). As a subcontract writer, you're responsible for supplying your own tools.
• Can you pay your own benefits? Speaking of providing your own stuff, unless you're subcontracting on the side while you're still employed, you'll have to furnish your own benefits -- including health insurance. Of course, if you're already a self-employed resume writer, you knew this. (And you've been setting aside money for your quarterly estimated taxes too, I hope!)
• Are you good with money? If you're not good at budgeting, being a subcontract writer might be difficult. For example, you may write 8 resumes this month for one contracting writer and receive a $1200 check. Should you spend all $1200 this month because you earned it this month? No. You should save some for taxes, savings, and for the slower months.
• There's still feast or famine moments. Payment doesn't always come on time, like it does with a job. Even your contract writer may have slow times, so that makes it harder to budetyour money. If you can budget through the hard times and ride the wave, you'll make it as a subcontract resume writer.

Hopefully, this has given you some things to think about when it comes to becoming a subcontract writer. There's lots of other things to consider too, of course, like how to find a contracting writer or contract firm to work with.

I've got a resource that will help you with that too. Check out the"Making Money as a Resume Subcontractor" special report and directory of contracting writers.