COVID-19 Cash-Flow Update

The nationwide economic shutdown that went into effect in mid-March has done the vast majority of U.S. businesses no favors. In fact, the shutdown has been devastating for business owners and Freelance consultants alike.

According to an April 18, 2020 survey of 16, 620 business owners conducted by Alignable, an online referral and business development organization for business owners and self-employed individuals that claims 4 million members, 43% of businesses in America have had to temporarily close. Of those that remain open, 28% report that business is down by 75%; 15% said that business is down by 50%; 11% found that business is down by 25%; and a lucky 2% report that the shutdown has been good for business (maybe grocery and liquor stores?). The enormous impact of COVID-19 on the economy has compelled the federal and state governments to offer financial assistance to U.S. citizens.

The Payroll Protection Program, which is designed to help businesses that employ fewer than 500 workers to retain those workers on the company payroll in the face of often drastic revenue reductions brought on by the coronavirus business shutdown, ran through the original $349 billion appropriation approved by Congress in less than two weeks. Happily, Congress has just pushed through another bill that will not only add $320+ billion to PPP but also earmark $60 billion of the funding for small banks, credit unions and community based lenders.

Furthermore, business owners and Freelance consultants can apply for a loan that’s up to 2.5 times the average monthly payroll of the business, not to exceed $10 million per entity.

Remember, the PPP loan can flip to a grant if the recipient Freelancer or business owner applies 75% of funds received to payroll expenses (I including the owner’s draw) and 25% of the funds to business operating expenses. Otherwise the loan, which must be repaid within 2 years, is payable at 1% interest.

The Small Business Administration has also played its customary role in assisting business organizations large and small through the Economic Injury Disaster Loan program. EIDL provides loans and also a maximum $10,000 immediate cash advance to businesses financially harmed by the shutdown. The SBA reported that as of April 20, nearly $3.3 billion in EIDL grants and $5.5 billion in EIDL loans had been awarded. Congress is expected to approve an additional $60 billion in EIDL funding, bundled with the $320+ billion initiative to replenish PPP.

Still more help will be made available to Freelancers by way of the new Pandemic Unemployment Assistance program , a variation of Unemployment Benefits and therefore administered by the states, is set to provide up to 39 weeks (maximum) of unemployment benefits to those who have historically been excluded , i.e., us—- independent contractors, the self-employed Professionals, or gig workers.

To be eligible, applicants must provide self-certification to demonstrate that they are available to work but are prevented from doing so as a result of COVID-19 or actions related to it, including one’s own illness due to the virus or a close family member who contracts the virus. Even workers who are collecting sick pay or other benefits that amount to less than one’s weekly pay, or those who are working fewer hours, resulting in diminished income, might nevertheless be eligible to collect PUA benefits. For more information, search Pandemic Unemployment Assistance in your state.

Thanks for reading,

Kim

Photograph: Kim Clark 4/23/2020. The Doc Martens store on Newbury Street in the Back Bay.

The Beat Goes On : Visit the Job Boards

As the coronavirus continues to stalk the land and our political leaders and many citizens continue to see a business shutdown as the only response, making a living has become very difficult for the 57 million Freelance Professionals in the U.S. (Statista). If our clients don’t work, neither do we.

Federal government relief was rumored to be on the way, but I don’t see any evidence of it. It’s probably going to be smarter to put one’s energy into finding projects from a mix of new and current clients (same as it ever was!).

Still, maintaining the discipline and enthusiasm required for a job hunt is difficult and discouraging when the prospects for success appear bleak. But if you can make yourself surf through job board listings three times per week, you might come up with a project, however small.

I am most grateful that my largest client came through and asked me to provide a one hour marketing consultation with one of their clients, an RN/ Nurse Practitioner and midwife who recently launched a Freelance business that focuses on hormone management in women, from post-partum to menopausal. BTW, I sent Easter/ Passover cards to a select group of clients, including this one, and thank heaven my outreach paid off!

Among the marketing strategies the RN will pursue as she builds her Freelance consultancy is a new website, which will function as a lead generator. I was so excited to be able to refer to the RN a Freelance web developer with whom I had worked a few years ago. I’ve reached out to him and as soon as his schedule allows, I’ll conduct an email introduction and hope that the relationship will be fruitful.

That is how we’ll make it through this never-before-experienced crisis, my Freelancer friends. We must rally forward and do some job hunting at least two or three times each week for at least an hour at a time and as well we ought to remember to refer our colleagues along the way.

Now about the job boards—-I found a few possibilities, some familiar and others unexpected, to help you jump-start the client building work,

Aquent

Specialties covered include Management, Marketing, IT Design, Managed Services and Professional Development. Some workers can qualify to receive benefits. Free online training courses for workers are also available. http://acquent.com

This company is strictly top- drawer and seeks only cream of the crop gig workers. Extended Workforce Services is what the company provides and the work assignments may not be remote; there are 35+ offices around the world, primarily in the U.S.

Guru

The site boasts that prospective employers will work with among the most talented professionals in the field, regardless of the assignment. Among the services provided are translation/ writing, legal services, architecture & engineering, marketing & sales, business & finance, software development & programming and administrative services. https://www.guru.com/d/jobs/

LinkedIn ProFinder

The ProFinder algorithm sends jobs to your inbox, thus eliminating the need to continually search for employment possibilities. Only five proposals are accepted for each assignment, so time matters for assignments that appear very attractive .

Proposals are short, which allows bidders to quickly put themselves into consideration but limits one’s ability to sell oneself in some instances.

I’ve submitted 8 -10 proposals over the past 12 – 18 months, and I came close to being hired only once. The project was interesting and the rate of pay offered was very decent. The lady who interviewed me over the telephone was very nice and also honest.

That said, I still recommend that you sign up for ProFinder, create a profile and compete for assignments. The first 10 submitted proposals are accepted at no charge but to submit additional proposals the job seeker must join LinkedIn Premium at $60/ month and that is steep. Depending on your luck, you may decide to pay up and roll the dice on being hired. Or you’ll pull the plug on this service.

However, none of my other proposals was ever acknowledged, including one submitted by a man who had once written for the New York Times. What was his motive for the job posting? Maybe he thought he just felt my writing isn’t good enough? http://LinkedIn.com

The Creative Group

Freelancers looking to earn money and work on interesting projects may be very happy with this site. It’s the place for advertising whiz kids, marketing rock stars, genius art directors, amazing website designers and super organized account managers, too. Full time and project work is available, both on-site and remote.

The company is a division of the global giant Robert Half Staffing Agency. https://www.roberthalf.com/submit-resumeglobal

TopTal

TopTal announces to both job seekers and prospective employers that the site features the top 3% of Freelancers from around the world. software developers, finance experts, product managers, marketers, graphic designers and project managers are the principal hires. ://www.toptal.com/careers#positions

Upwork

I’ve gotten a couple of small jobs on the site but I abandoned ship when it was announced that it would cost money to submit a proposal. On top of that payment, there will be a 20% fee attached to each invoice submitted. Furthermore, Upwork clients like to low-ball on fees, so there is not a lot of revenue to be generated, unless one specializes in software development and other IT functions.

I was lucky enough to start work on a sales training manual but then the client pulled the plug and regards was the end. She claimed to really like my work. The fee charged was less than half of what it should have been. I suspect that the client suddenly got spooked by the business start-up costs Oh. well. I sometimes think about reaching out to say hello to the client. She was great to work with. http://Upwork.com

Thanks for reading,

Kim

Photograph: Runner on Commonwealth Avenue in the Back Bay neighborhood (Boston, MA) on Monday April 20, 2020, what would have been the Boston Marathon.

Coronavirus Cash Flow

Because federal and state governments chose to require most businesses to cease operations as a way to decrease public exposure to COVID-19, those entities have recently decided to throw a few dollars back at the citizens, to help us manage our financial obligations as the shutdown grinds on. As you may have predicted, the response may be inadequate and imperfectly distributed, but it will help a little bit.

CARES Act Economic Impact Payment

Every citizen and legal resident not claimed as a dependent on someone else’s tax return is eligible to receive an EIP, that is, a Stimulus payment of up to $1200 per person, or $2400 per couple, plus an additional $500 for each child.

Eligibility for financial assistance will be calculated from one’s 2018 (or 2019, if filed) tax filing, so make sure that one or both are completed and in the hands of the Internal Revenue Service and your state Department of Revenue. The new tax filing deadline date is July 15, 2020 for 2019 federal taxes and most states have assigned that date as a deadline as well, but I suggest you verify that ASAP.

Filing for extensions on the federal or state level remains April 15, 2020. To keep abreast of this fast-changing situation on the federal level, check in at http://irs.gov/coronavirus.

Single filers whose Adjusted Gross Income was $75,000, joint filers whose AGI was $150,000 and marrieds filing separately (head of household) whose AGI was $112,500 in 2018 (or 2019) will receive the full amount of the award (see above).

Single filers whose 2018 AGI was between $75,001 – $99,000 and marrieds whose AGI was $150,000 – $198,000 will lose $5.00 for every $100 that their AGI exceeds the $75 K and $150 K single or married filers thresholds. Regarding those whose AGIs are below the thresholds, there doesn’t appear to be a plan in place.

Children who qualify for the Child Tax Credit can help their family receive an extra $500 each. Dependent students aged 17 – 24 years will not bring the Stimulus benefit to the family but working students aged 18 – 24 years who file their own taxes and are not listed as a dependent on the tax return of another are eligible to receive a Stimulus payment for themselves.

The Department of the Treasury prefers to send Stimulus payments electronically so if you’d like to receive payment more quickly, make sure that your bank or debit card info is on file. If the IRS does not have direct deposit information for you as a result of previous tax refunds, there will soon be a website to allow filers to add that information.

CARES Act Paycheck Protection Program

This program was originally created to help business owners who employ fewer than 500 workers to retain their employees in those essential operations that are sanctioned to remain open during the shutdown. The PPP is technically a loan program that has the potential to become a grant. Those who apply need not prove any lost income or financial hardship. It’s recommended to apply for the loan through your business banker.

If 75% of the loan money is applied to payroll expenses and 25% is used to pay operating expenses such as rent and utilities, the loan will then be forgiven and essentially become a grant. If that formula is not followed, the business owner will pay a 1% interest rate, payable over two years, with the first payment not due for six months.

Freelance consultants benefit when the payroll portion of the loan calculation is instead applied to our revenues as determined by one’s “net earnings, wage, commissions and/or income from the self- employment venture.” If the Freelancer employed any full or part- time workers, they must remain on the Freelance entity’s payroll for a minimum of 8 weeks, at the original rate of pay, in order to qualify for the loan, as is the case with typical business owners. If the Freelancer hired other Freelancer contract workers to help out on a project, those contract Freelancers are not covered in the PPP calculation; they may apply on their own for the benefit and include that income.

FYI, PPP loans may be administered only by a pre-approved list of banks and the word is that for the most part, only existing business banking customers will be approved for the loan.

There are now millions of Freelance workers in the U.S. and the demand for PPP loans, which if handled as described above can become a grant, is high. It’s rumored that Congress is weighing the possibility of adding $250 million to the original $500 million appropriated for PPP, so that the Small Business Administration can expand the list of approved lender banks. To be continued.

Thanks for reading,

Kim

Photograph: Kim Clark. Shopping at the South End Whole Foods Market in Boston, MA.

Rituals and Recovery

This week I have another coronavirus coping strategy for Freelancers to r reand it boils down to this—do what you’ve always done, except when you have to pivot or adapt. Psychologists, sociologists and others who observe human behavior know that routines and rituals have real power. Michael Norton, professor at Harvard Business School and member of Harvard’s Behavioral Insights Group and Francesca Gino, professor of organizational psychology at Harvard Business School and author of Sidetracked: Why our Decisions get Derailed (2013) found that routines and rituals are stabilizers that ground us and help us to keep going when we’re feeling out of sorts, when we’re grieving the loss of a loved they keep families and friends closer they help to maintain the bond between martial partners.

There is a psychological benefit when, in times of uncertainty and stress, we return to our old routines and habits. Some routines that we turn to can be harmful, it is true. Binge eating, smoking and drinking come to mind. If those activities have been among your habits, I suggest that you leave them in the past. As we crawl our way through the coronavirus shutdown it will be the good rituals and habits, the sometimes silly and often idiosyncratic ways about us, that will nurture us and give us the strength and determination to see our way through this long dark tunnel.

Weddings, christenings, funerals and holiday dinners are all steeped in ritual (that is, habit). That is why whenever someone makes a change to the Thanksgiving or Easter dinner menu, there might be a mini riot. Even those who don’t love mashed turnip or mincemeat pie may complain long and loud if those items are not served on the fourth Thursday in November. The decision to serve an Easter ham or Easter lamb could lead to an armed standoff.

Routines and rituals are often small habits. One always wakes up at a certain hour, so as not to feel lazy. One always exercises in the morning (or in the evening) because at first it fits a schedule but now it is defining act that supports and even comforts.

Oddly, Norton and Franco found that a ritual or routine did not have to be practical or useful to be habit-forming and compelling. Competitive athletes are known to sometimes wear a favorite pair of socks or necklace, or eat a certain food for the pre-competition dinner because they feel the need for a good luck charm.

So what can you do to keep it together as you push through what is probably the most formidable challenge a Freelance consultant will face? As I said earlier, keep doing what you’ve been doing. If you always woke up at 6:30 AM on the weekdays, then continue to do so. If you always headed out to the gym at 7:00 AM, here is where you pivot and make an adaptation. Because gyms are closed, devise a combination run and power walk routine that lasts for 30 minutes.

This is a holiday week for Christians and Jews and I suggest that you apply the ritual usually practiced during the December holidays and send cards to your clients. Because you don’t know who is working from home and who is in the office, send an e-card (I use Jacquie Lawson).

Create a new ritual and visit online gig economy sites such as LinkedIn and Upwork. Tell yourself that you’ll check in on Tuesdays and Thursdays (or Mondays and Wednesdays) and use self-discipline to keep the routine going throughout the shutdown and beyond, because we all need money and we need lots more cash than the government stimulus will provide.

Another ritual that you can either continue , learn, or resuscitate is meditation and focused breathing. Both medical and psychological research has demonstrated that this technique promotes healing of the body and mind.

Thanks for reading,

Kim

Photograph: Kim Clark. Long-time Boston favorite Giacomo’s Ristorante pivots out of sit-down service and into takeouts, per the Commonwealth of Massachusetts coronavirus rules.

A View From the Lockdown

I am one who likes to be productive. I’ve grown weary of the enforced furlough that the civil servants have foisted upon the good citizens (and properly documented guests) of the empire. Sitting on the bench as life passes us by is a tragic waste of time and as we know, time and the tides wait for no one. We can never reclaim our lost days.

It occurred to me that education can soften the blow, at least somewhat. If we educate ourselves, we’ll come out of this madness better than we were when we went in. I’ve heard that many parents are taking a stab at home schooling their children and there’s no reason why we grown-ups cannot home school ourselves.

So after you’ve rearranged closets, done laundry, dusted & vacuumed, put spring plantings into the garden and window boxes and ranked the client list according to revenue potential, you might feel ready to pursue some professional education, ideally in the form of short workshops that are offered at no charge or low charge (because you may not be getting paid for a while). LinkedIn could have what you need.

LinkedIn Learning has 15,000+ workshops and tutorials that will grow your knowledge and the price range seems to be $20 – $40. A revolving sample of workshops are free at any given time and I’ve taken three. All were useful and very well presented. https://www.linkedin.com/learning

Whatever your specialty, you are sure to find a LinkedIn Learning workshop that will supply you with relevant information that will help you serve your clients more effectively. Not only that, but you’ll earn a certificate that will look nice on your profile.

What follows here is a sampling of workshop topics that nearly every Freelance consulting specialist and business owner might appreciate.

Business Finance

So many business owners and Freelancers shrink from the financial management aspects of our ventures. It can be intimidating. A good teacher will break it down and show you that you already know how to do most of this stuff if you’ve ever had a job and paid rent and other expenses.

What is needed is confidence and big- picture thinking. Discover the guidance that business finance workshops will provide to support the growth and health of your venture.

Financial Modeling and Forecasting Financial Statements will explain the basics of your financial statements and how to learn from them, help you figure out cash-flow, plus teach you how to use your company’s past financial data to predict future financial performance.

Brothers Jim and Earl Kay Stice will lead you through step by clearly explained step. Earl Kay Stice holds a Ph.D. in Accounting from Cornell University and he teaches the subject at Brigham Young University. Jim Stice received his Ph.D. in Accounting from Brigham Young University, where he is the Distinguished Teaching Professor of Accounting.

Microsoft Excel

There are numerous Excel workshops and tutorials available and I am ready to dive into two or three of them, at minimum.

Excel spreadsheets make data analysis so much easier. There are even tutorials on functions as basic as filling the cells and adding highlighting color and fonts to make your data pop.

There are workshops that teach learners how to create a basic dashboard and how to create charts in Excel, from classics like bar graphs and pie charts to more recent configurations such as funnels and Pareto.

Value Based Pricing

Your business will not be optimally profitable until you learn how to properly price your products and services. Pricing for B2B services is especially challenging. The concept of Value Pricing is an excellent strategy and you can learn how to apply the principles to your venture after dipping into this most useful course.

Strategic Planning

Take your pick—Strategic Planning Foundations, Strategic Planning Case Studies and Assessing & Improving Strategic Plans, all taught by Mike Figliuolo, author, West Point graduate, former assistant professor at Duke University, author and former McKinsey consultant.

Listening Skills

I took a great one hour listening skills workshop taught by Dorie Clark, adjunct professor at Duke University School of Business, author and frequent contributor to the Harvard Business Review. Excellent communication begins with active, meaningful listening. Listening well will help you to become more persuasive, a better negotiator, a more successful sales professional and an effective leader.

Thanks for reading,

Kim

Photograph: Kim Clark. Social distance grocery shopping March 2020.

COVID-19 Crisis Management

How are you holding up? I assume that you are taking steps to manage the impact of our coronavirus crisis and that you’re feeling somewhere between frightened and overwhelmed? This thing has hit like a tidal wave that has upended all business and taken nearly every Freelancer under, at least in the short term.

The shelter in place orders that panicked public officials have instituted have the ability to do particular harm to self-employed professionals and small business owners. We are concerned about public health and we understand more than most about the need for decisive action because our livelihoods depend upon it and our money and our brand are always on the line. We wish that along with epidemiologists, economists and even ethicists would also be invited to the decision-making tables.

The strategy that’s seen as quick fix crisis management by ventures large and small is to shed all or most Freelance workers and review all supplier and vendor contracts, with the purpose to renegotiate and trim fees.

I agree that cost-cutting measures are prudent and if I presided over a larger entity I would recommend such actions to my leadership team. Yesterday, I read that Exxon Mobil will follow exactly the same strategy.

Yet being perceived as expendable does nothing to improve one’s ability to sleep nights, to say nothing about one’s ability to pay living and business expenses. If a survival strategy ever was needed, the time is now! So what can we do? The short answer is to get practical, be resourceful and use online tools wherever possible because the practice of social distancing will be with us for a number of months.

TECH ENABLED TOOLS

I teach business courses and present workshops and that means I have an audience. Or maybe I should say I had an audience. For the time being, public speaking and gatherings as we have known them are over. I’ve already been in contact with two clients to discuss how educational programs will proceed.

One client has been doing online workshops for a number of years and they’re conducted over Skype and so my ID for that platform has been sent to them. Unfortunately, what was scheduled in the near term was cancelled, but since they have clients to satisfy and need me to achieve that imperative, I know that by late April I’ll be presenting on Skype.

To another client I recently sent an email and suggested that we postpone by a couple of weeks the workshop that I was scheduled to present and repackage it as a webinar. I offered to come to their place of business to use their equipment (and also guarantee a quiet studio, something that a home broadcaster can seldom provide what with the sirens of emergency vehicles passing by, however occasional).

A third client has for a number of years hosted social events that regularly attract 500 – 1000 visitors. I will soon reach out to my contacts there and suggest that they experiment with an online format. The logistics, format and flow will have to be carefully considered, but for several years many people have attended meetings virtually and the concept is no longer novel.

While on a recent (audio only)conference call meeting of 18 participants, three or four spoke up about using online platforms to conduct social events that have been successful. One caller spoke of online dinner parties that she and her husband share with their adult children who now live in other parts of the U.S. Another caller spoke of attending and enjoying a virtual cocktail party, where participants dressed up, poured themselves a cocktail or glass of wine, nibbled hors d’oeuvres and engaged in conversation with other guests all from their kitchen or dining room tables. Apparently, they had a blast.

Finally, to the writers among you, this crisis is the perfect time for clients —and Freelancers ourselves—-to review marketing strategies and update our messages and materials where needed. Stay the course and be brave.

Thanks for reading,

Kim

Photograph: Kim Clark. Star Market, Prudential Center Boston MA March 23, 2020

Continue reading

5 Clients You Need to Fire

It takes all kinds of people to make a world and unfortunately, from time to time one is destined to encounter an individual whose mission in life, so it seems, is to attack others and make them unhappy. Such people obtain a perverse pleasure from making the lives of others miserable. These people like to criticize, demean, diminish, bully, gaslight and even humiliate those with whom they interact, professionally and personally.

I’ve met more than my share of these damaged creatures (even one is too many!) and my recommendation is to keep them at arm’s length and whenever possible, cut ties with them altogether. There is no relationship compelling enough to justify any level of abuse as the price of interaction. Forget about keeping the peace. Troublemakers never worry about keeping the peace (but they will throw that excuse at a target, as a way to maintain control).

Some relationships are difficult to avoid but when it’s a client (or for that matter, a close relative), I guarantee that there is nothing positive that will ever be derived from a dysfunctional relationship. The best course of action is to politely cut the cord. Have you met any of the characters in this rogue’s gallery listed below? Deport and build the wall!

Commitment phobics

Some prospects prefer to shop around and consider several options before they decide which solution to invest in. That’s a smart thing to do; shopping is not a problem as long as the prospect is really a prospect and serious about finding a good solution for their needs. However, some “prospects” fall into analysis-paralysis quicksand and never move forward to get the project done, no matter what they promise you. They just string people along and waste time.

Fee hagglers

Start-up entrepreneurs, more than a few small business owners and many Freelance consultants, whether their venture has high growth potential or is likely to become only modestly profitable, may have limited funds. Likewise, leaders at not-for-profit organizations may direct as much of their financial resources as possible into supporting the mission, which may be a cause about which s/he feels passionate.

If you are offered an assignment that while it has a very modest budget but that you nevertheless feel is worthwhile, whether it advances a cause about which you are also passionate, or you’ll be able to take on a project that will, for example, allow you to expand into a niche that you’d like to enter and therefore has significance for you, then accept a lower than usual fee. Just don’t allow yourself to get bullied and frightened into lowering your fee by someone whose aim is to exploit. Respect that you must adequately cover the time and expertise that you will devote to this project. Be aware of what matters to you and set clear boundaries when deciding whether to accept “charity” cases. Establish a “walk-away” amount for every fee negotiation and accept nothing less (it’s not easy, I know).

Abusive

Along with time, expertise, judgment and resourcefulness are among a Freelancer’s most valuable and marketable attributes. In order for us to perform at peak efficiency, so that we can fulfill the needs and expectations of our clients, it is tremendously helpful, if not necessary, that those with whom we work, our clients, respect who we are and what we can do for them. Uncommunicative, uncooperative, unethical or just plain obnoxious clients greatly diminish our ability to do our best.

Behavior that persistently negative, undermining, passive-aggressive, micro-managing or outright verbally abusive are unacceptable and should never be encountered in the professional (or, for that matter personal) sector. Watch and listen for sign of this type of behavior in client meetings. If you see a red flag in the distance, back away quickly. You may need a contract, but you’ll pay back every dime that you earn in misery.

Complainers

Some clients are never satisfied, no matter what you do to please them. When clients provide negative feedback about your pitch or the work you’ve done, it’s important to determine its validity and make improvements as indicated. But some people make it a habit to continually criticize and complain about everything because nothing is ever good enough for them. It makes sense to avoid these clients whenever possible.

Slow payers

Late payers (or God forbid, no-payers) have no place in a successful business. A business requires steady cash-flow. Clients who don’t pay invoices on time disrupt your financial viability and make it difficult to effectively manage business and personal finances. Slow pay/ no pay clients can even prevent you from making important investments in the business or yourself.

Clients who constantly delay payment don’t appreciate the value that you and your organization bring to their business. While in fee negotiations with a client, remember that the best defense is a good offense; establish a protocol that will minimize, if not eliminate, the slow-pay/ no-pay risk.

A reasonable risk management fee collection strategy is to request a certain amount of the total fee at the signing of the work contract, maybe 15 %, before commencing work. Get agreement from the client on one or two project milestones and tie payments of 25% to them. Invoice the client for the final amount within two weeks after project completion and ask for payment upon receipt of the invoice.

Thanks for reading. Stay healthy!

Kim

P.S. Apologies for not publishing this post on March 17, as was my intention. The publish button was clicked and I thought that the post had published.

Image: “ The Scream, “ 1893, by the Norwegian painter Edvard Munch (December 1863 – January 1944) courtesy of The National Gallery in Oslo, Norway.

Create Your Crowdfunding Campaign

Crowdfunding has caught on among entrepreneurs in need of funding for their start-up ventures and numerous business incubators across the country now offer information on crowdfunding sources. Crowdfunding veterans know that the fundraising campaign is won or lost before the campaign goes live and that the most important decision a campaigner will make is to choose the most suitable platform for the business or project that will be funded. Please see my March 3rd post for a sampling of crowdfunding platforms.

To get an insider’s understanding of how a smart crowdfunding campaign is created and managed I spoke with Alice, a neighbor who is a documentary filmmaker. Alice said that she spent about 8 – 10 weeks, working about 4 -5 hours each day, to prepare for her campaign kick-off and another 4 weeks or so running and managing the campaign while it was live on Indiegogo. The post-launch phase was easier, focused on follow-up and updates.

To create her campaign, Alice asked a friend to build a 6 page campaign website, she filmed a pitch video (she is a filmmaker, after all) and developed a synopsis to further explain and “sell” her film concept. She even planned a small campaign kick-off party to encourage friends and family to participate on day one and create momentum and good results that often make the difference between reaching the fundraising goal or falling short.

Once the campaign was in motion, Alice estimated that she spent about 10 hours/ week on upkeep during the second, post-launch, month. This phase involved follow-up, consisting mostly of engaging updates and donor outreach on social media and in emails.

Keep at top-of-mind that your campaign is unlikely to succeed without a total commitment on your part. Think of crowdfunding as a full-time job while you’re driving your campaign goals. Leverage every relationship and marketing channel available to you. Crowdfunding campaigns are a lot of work but if you build it right, you can possibly meet and or even exceed your funding target. 

Storytelling

Help potential funders understand how backing your product or business idea can benefit them. Tell them who you are, what you’re planning to do, where the project idea came from, what your budget is and why you’re passionate about it. Show that you’ve thought through your idea, which helps prove the legitimacy and credibility of your project. Communicating your story through visual imagery is particularly effective and many successful fundraisers create a 5 (or so) minute video.

Make sure to create an eye-catching campaign landing page image as well as a persuasive video pitch. The video quality must be good, your story must be clear and compelling and your product must shine. Show that you are knowledgeable and articulate as you clearly outline your concept and the benefits and demonstrate exactly how it works.

Connect emotionally by expressing your story in a way that helps potential backers to relate. Show and tell why your product is desirable and unique. People need to know what problem you can solve and why the solution will appeal to target customers. Be advised that your backers are of primary importance. When you show them that you care, they’ll be more willing to trust you and may even reach out to friends to share your campaign with them.

Funding goal

Research your business start-up or expansion costs. Prepare 12 month P & L and Cash Flow Statements, plus a Break-even Analysis, to confirm with confidence both your expenses and when you expect that sales will equal and then surpass expenses. Furthermore, be realistic about your fundraising potential as you estimate how many of your friends and family might be willing to donate. Based on that information, set your fundraising target. Alice predicted that while your campaign might attract the attention of new people, most of your support will come from those who know you. BTW, your fundraising goal cannot be changed once you’ve started the campaign.

The rewards

People will support your project if they think it’s worthwhile, but it’s always good to have interesting donor perks, since people expect a little swag. You might check out the Kickstarter Creator Handbook to figure out what you can and cannot offer, as there are some common restrictions that you’ll need to know. Also, be mindful as you structure your rewards in terms of price points. It’s fine to promise big rewards, but remember that delivery can take considerable time and effort.

Promoting and updating

Your Crowdfunding platform may have built-in tools that allows campaigners to update project backers and send messages to them and you should take advantage of these tools. Email marketing, your blog or newsletter (you might create either or both for the campaign) and social media can be effectively employed to spread the message about your campaign and its progress. Continually keep your project backers in the loop as you move forward with the campaign. Fail to share regular updates and you risk losing donor interest and that can result in a smaller donor pool. Be positive, yet transparent, in your updates. If things aren’t going quite as anticipated, let folks know.

Encourage product feedback

One of the most important things to do before starting a crowdfunding campaign is to run a beta-test and obtain some product reviews. Feedback is essential to making helpful product or process improvements before launching the campaign. You may have an amazing product or service, but that doesn’t mean it can’t become even better with a little extra work.

Deliver on rewards and promises

Your crowdfunding campaign isn’t over if and when you reach your funding goals. It’s over when you’ve fulfilled your promises. This means completing your project, delivering your perks or rewards and continually communicating with your supporters. Only when fulfillment is complete can you truly say you had a successful crowdfunding campaign.

Thanks for reading,

Kim

Photograph: ©Lai Afong, Hong Kong photographer and founder of Afong Studio, one of the first in China. Afong was considered the most influential Chinese photographer of 19th century China. His photograph shows men betting on and playing a game of Fan-Tan in Canton (Guangdong), China circa 1890s.

Crowdfunding for a Business

What do you do when you need money to either launch or expand your business venture and the bank won’t give you enough money? For many entrepreneurs, crowdfunding is the answer. Originally used to fund charity drives or creative projects like recording music or film making, crowdfunding is now recommended as a business financing strategy by organizations that support aspiring entrepreneurs.

That said, I remain skeptical. I understand the allure of crowdfunding—people will give someone money to finance a creative project or business venture and that person will, ideally, achieve the goal without taking on debt. In exchange for the financial support, the entrepreneur, in many cases, will promise to give backers a reward, or even a small equity stake (ownership) for certain investors.

But ask yourself—why would a total stranger contribute to a crowdfunding campaign for a start-up, unless it’s a not-for-profit venture and I believe in the cause and would like to support it? Well, some folks are just of a mind to be a part of someone’s success and that’s the best reward. However, campaigners are advised to align the reward offered with the project.

If the campaign will fund the production of a big special event, for instance, the campaigner might offer free admission, backstage passes, or even a chance to hop up onstage and jam with the band. For consumer products, the most obvious reward would be to provide backers with a digital or physical copy of the item in advance, or offer a purchase price that is far less than the typical retail value. Bear in mind that creativity pays: among the most consistently popular rewards are those that offer personal or unique touches, or provide singular opportunities, e.g, lunch with the founders or the inclusion of donors’ names in the new software product’s credits.

Since there is growing interest in the entrepreneurial community about this nontraditional funding source, I decided to research. Here’s the first half of what I learned. Next week, I’ll follow-up and examine how one might create a successful crowdfunding campaign for a business.

WHICH PLATFORM IS FOR YOU?

CircleUp—Best for fitness, food & beverage, technology

  • Campaign types: Equity, credit
  • Industry focus: Early-stage consumer brands
  • Funds you can keep: All or nothing
  • Funding fees: N/A
  • Payment fees (US): N/A
  • Startup locations allowed: Worldwide

If you’re an entrepreneur working to get your consumer product on the market, CircleUp offers an excellent array of services, including a platform for connecting with accredited investors, insights from machine-learning technology and access to special lines of credit for start-ups. Accredited investors must have a net worth of at least $1 million and earnings of $200,000 a year or more, per SEC regulations. In other words, the investors are quite affluent and capable of writing big checks.

While the focus is on early-stage companies, the platform is nevertheless best suited for more established start-ups looking to scale, rather than companies in their infancy.  CircleUp doesn’t charge any fees for friend and family investments and provides special access to funding through partnerships with Procter & Gamble and General Mills. 

Fundable

  • Campaign types: Equity, rewards
  • Industry focus: Healthy startups ready to expand
  • Funds you can keep: Whatever you raise for equity; all or nothing for rewards
  • Funding fees: $179 monthly subscription
  • Payment fees (US): 3.5% + $0.30 per transaction for reward campaigns
  • Start-up locations allowed: Must be headquartered in the US

Most crowdfunding platforms, whether equity or reward, take a percentage of funds raised. However, this platform just charges a flat monthly subscription fee. As long as you’re subscribed, you can create campaigns to raise money.

The flat fee makes it a great deal for many successful crowdfunding campaigns. The only problem is that campaigners must pay the fee whether or not one is successful. A failed campaign will lose you money, so Fundable is best for start-ups that have a high-potential business model.

But if you’d like a little extra help with your campaign, Fundable offers consulting services and will do everything from design assets to market your campaign. These consulting services do cost more than Fundable’s monthly fee; contact Fundable to obtain pricing.

GoFundMe—Best for not-for-profits and charitable causes

  • Campaign types: Reward, donation
  • Industry focus: People and causes
  • Funds you can keep: Whatever you raise
  • Funding fees: 0% for personal campaigns in the US; 5% for charities and countries outside the US
  • Payment fees: 2.9% + $0.30 per transaction
  • Start-up locations allowed: 19 countries

GoFundMe campaigns are donation-based and focus on not-for-profit start-ups and charities. If you operate a not-for-profit, or are trying to raise money for a cause, this is the preferred platform.

IFundWomen—Best for women entrepreneurs

  • Campaign type: Reward
  • Industry focus: Women-led businesses
  • Funds you can keep: Whatever you raise
  • Funding fees: 5% of all funds raised
  • Payment fees (US): 2.9% + $0.30 per transaction
  • Start-up locations allowed: 23 countries

Women entrepreneurs, who own a growing share of new startups, still face significant challenges in securing investment capital to get their businesses off the ground. iFundWomen offers a a solution to some of those challenges. The founders created the platform as a “fundraising ecosystem for women-led startups and small businesses.” It also provides coaching, marketing and other services for start-up owners.

Unlike some reward-based crowdfunding sites, iFundWomen lets campaigners keep whatever funds they raise. Of the money the site earns from funding fees, 20% goes back into supporting campaigns and services that benefit women business owners.

Indiegogo

  • Campaign types: Reward, equity
  • Industry focus: Tech and innovation
  • Funds you can keep: All or nothing; whatever you raise
  • Funding fees: 5%
  • Payment fees (US): 2.9% + $0.30 per transaction
  • Start-up locations allowed: Worldwide

A big plus is that Indiegogo allows campaigners to choose to structure either a fixed or flexible funding arrangement for your campaign. If you choose flexible funding, you still get the money even if you don’t fully reach your goal. Fixed funding is the same as all campaigns on Kickstarter. Reach your funding goal or the funds are returned to prospective backers (see below). Either way, campaigners must deliver the equity and/or rewards that you promised to supporters.

The site has millions of visitors and the traffic can, in theory, be great for your campaign. If you get featured in your category, your project will be exposed to a ton of people and possibly bringing in many backers. The problem with the mega-sites is that it’s difficult to get featured and your campaign can easily get lost in a sea of other aspirants.

Kickstarter

  • Campaign type: Reward
  • Industry focus: Creative arts
  • Funds you can keep: All or nothing
  • Funding fees: 5% of successful campaigns
  • Payment fees (US): 3% + $0.20 per pledge $10 and over; 5% + $0.05 per pledge under $10
  • Start-up locations allowed: US, UK, Canada, Australia, New Zealand, the Netherlands

Red alert people! Kickstarter campaigns are all or nothing. Meaning, if you can’t meet or exceed your funding goal, all the money is returned to your prospective backers. You had better know that you have enough check-writing friends to get your campaign to the first milestone and that the strength of your project, supported by a very compelling marketing outreach, will carry you across the finish line.

On top of that, the platform is highly competitive and carefully selects the projects allowed on the site. You cannot fund just any business on Kickstarter—you must “create something to share with others.” Your project also needs to fall under one of site’s curated categories, such as arts and crafts, fashion and design, film and photography, games, and technology.

Moreover, investors will expect some type of reward, so you’ll need something of value for the swag bag you must distribute to investors (and you must categorize rewards by their value, to correspond with the amount of donations). So if you’re trying to scale your Public Relations business, what might your reward be—3 years of free press releases? I dunno.

Kiva—Best for micro-loans

  • Campaign type: Debt
  • Industry focus: Startups interested in microloans
  • Funds you can keep: All or nothing
  • Funding fees: N/A
  • Payment fees (US): N/A
  • Start-up locations allowed: United States

If you will accept taking on debt, this not-for-profit style platform could be your most affordable option. Successfully funded Kiva campaigns give your start-up a 0% interest loan, the best of all borrowing options.

The loan must be repaid, but there are no funding or payment fees for you to worry about. Since Kiva requires that you prove your social capital by kicking off your campaign with donations from family and friends, that means convincing people you know to fund your business—but were’t you going to do that anyway?

Note that Kiva loans top out at $10,000; this is micro loan territory. But if you want affordable debt crowdfunding for your small fundraising goals, Kiva’s worth a look.

Publishizer

  • Campaign type: Equity
  • Industry focus: Book publishing
  • Funds you can keep: Whatever you raise
  • Funding fees: 30% of money raised
  • Payment fees (US): 2% – 4% per PayPal transaction
  • Start-up locations allowed: United States

Not all crowdfunding sites are giants, as are GoFundMe, Indiegogo and Kickstarter. In fact, most are smaller, niche-specific platforms, such as Publishizer, which was designed specifically to help authors crowdfund their books. Authors can certainly still use Kickstarter or Indiegogo, but this platform gives the benefit of having a specialized audience that supports authors and books.

Republic

  • Campaign types: Equity, reward
  • Industry focus: Start-ups with a focus on diversity
  • Funds you can keep: All or nothing
  • Funding fees: 6% for the startup + 2% Crowd SAFE fee
  • Payment fees (US): 3.5% per transaction
  • Start-up locations allowed: United States

As an equity-focused crowdinvesting platform, Republic is the new kid on the block and with it’s highly selective curated selection of companies, it’s not for everyone. But for growing U.S. companies with large revenue potential, Republic’s 95% success rate for selected campaigns make it one of the most enticing platforms for connecting with willing investors. Furthermore, Republic also looks for organizations with diverse founder teams.

SeedInvest

  • Campaign type: Equity
  • Industry focus: Technology startups
  • Funds you can keep: All or nothing
  • Funding fees: 7.5% of successful campaigns + 5% equity fee
  • Payment fees (US): $0 paid by the startup; 2% paid by the investor
  • Start-up locations allowed: United States

Founded by MBA graduates and experienced investors, SeedInvest started as a way to give technology startups access to capital from people willing to make sizeable equity investments.

To start, you need at least a minimum viable product or prototype, proof of concept and two or more team members. If you make the cut, you’ll get access to both accredited and non-accredited investors for campaigns starting at $100,000.

SeedInvest’s biggest drawback is its expensive 7.5% placement fee on all successfully funded campaigns. Still, the site has a growing base of investors and successful companies, as well as a positive reputation in the entrepreneur community.

I’ll be back next week with information on how to set up your campaign. Thanks for reading,

Kim

Photograph: ©David Cairns/ Getty Images. Roulette at the Playboy Club in London, England early 1960s

Press Release: To Send or Not to Send?

I’m impressed! You have news that you’d like to share with the world, with a particular emphasis on those who are potential clients and referral sources for your business venture, and you are sophisticated enough to think outside the box in an old-school way and consider sending—-ah ha!!—a press release. Yes, a press release remains a relevant tool, the standard route to media outreach.

While most everyone else chooses to make big announcements by way of social media you, sophisticated Freelancer friend, understand the reach and power of traditional media outlets, be it radio, neighborhood newspapers, or digital-format regional business magazines. Social media is great outreach but there are times when you want to get beyond your followers and obtain third-party support that implies objectivity and real world legitimacy.

Be aware that a press release is a marketing and sales tool. The idea is to communicate a message to customers and prospects through the vehicle of a print or online article, adding the authority and credibility of the publication to the message.

Before you go online and remind yourself how to write a press release—Who, What, When, Where, Why and How—first ask yourself these two questions and follow a couple of pointers. These may sound stringent but they’ll help you make a rational decision regarding media outreach for your organization.

  1. Am I newsworthy? Do you or your company that regularly receive media attention? If so, then you are newsworthy. Press releases by larger, established, household-name companies receive more attention than smaller companies and startups. Have you or your enterprise received any media attention at all? If so, that puts you at an advantage. Or, have you served on the board of your local chamber of commerce, library, or neighborhood business association? Are you a long-term and active member of a neighborhood group, school, Rotary Club, or place of worship? In other words, are you well-known in your community and can you leverage your renown to persuade an editor or reporter that you have sufficient name recognition among the media outlet’s readers or listeners that would motivate them to learn more about you?
  2. Is my story/announcement news? To get your message communicated through the publication, you’ll need to convince a reporter or editor that your message (or the story surrounding it) is newsworthy. Your story must have the potential to appeal to the readership of the publication, or listening audience if podcast or radio. So if your goal is to fill seats at a conference, don’t send a press release. The most important element of a press release is that it’s helpful to reporters, by offering them news of interest to their audience. Journalists don’t care to help fill seats at your conference.                                                                                                3. Write like a reporter   If your press release looks and feels like a real article, reporters will often just file it as a story with minimal editing. Therefore, it’s up to you to make sure that your press release looks and feels like a real news item. Avoid using business jargon.                                                     4. Call media outlets to confirm interest in your story Before sending a press release, call all media outlets on your wish list and ask to speak to the (business) appropriate editor or reporter. Do yourself a favor and read 3 – 4 issues to familiarize yourself with the types of stories that are carried and the names of reporters who cover your topic. Then, contact the reporters that you really want to cover the story. Mention that you’ve read their stories and name at least two. If you reach an editor, still make it known that you are familiar with other stories in your category.

Thanks for reading,

Kim

Photograph: (circa 1988) Phil Donahue (L) and candidate for president George H.W. Bush on The Phil Donahue Show.