NEGOTIATING A PAY RISE
Be prepared
Have a benchmark figure in mind, based on similar roles within your company and the wider industry. Try applying Broadly editor Zing Tsjeng’s ‘20 per cent rule’ discussed in Chapter 10. What would your company have to pay a new recruit to entice them into taking your role? Start there.
Timing is key
Set up a proper meeting with your boss, indicating that you’d like to talk about your contribution to the company and future prospects. Make sure you clearly signpost the purpose of the meeting, so your boss has time to prepare as well – nobody likes being blindsided.
Do your homework
Do your due diligence on the whole company’s fortunes, not just the issues in your immediate vicinity. Layoffs? New management? Expansion? All of these could be important factors in the timing and success of your request.
Rehearse beforehand
We only negotiate our salaries very rarely, so naturally it tends to be something we’re not very well practised at. Rehearse the conversation as much as you can with a willing friend, going over possible pushbacks and counterarguments.
Make your case
Outline what you’ve contributed to the organization, presenting tangible achievements and quantifiable wins. Avoid emotional language such as ‘I want’ or ‘I need’ at all costs, and instead use phrases like ‘I’ve achieved’ or ‘I deserve’. Frame your request as a business argument, not one stemming from personal desire or need (even if that’s the case!). Speak your boss’s language at all times.
The power of silence
Once you’ve made your argument, simply state the figure or range you have in mind and wait for a response. Asking for money tends to make most people feel pretty awkward, but resist the urge to ramble on in order to fill the silence, or provide caveats and further justifications. Once you’ve said your piece, the ball is in your boss’s court – so wait for their reply and take it from there.
Write it up
Whatever the outcome, make sure you get the agreement in writing. She who writes the minutes controls the conversation, so follow up with an email soon afterwards confirming everything that was agreed.
Set a goal
If your boss says no, query what you need to do to get a pay rise the next time you ask. Set a specific and realistic goal together, as well as a deadline to revisit the subject. And if the answer’s still no? It’s time to look for a new job.
NEGOTIATING A JOB OFFER
So you’ve just been offered your dream job – congrats! Given how tedious and protracted the job-hunting process can be, your initial inclination when you finally land a new job might very well be to jump at the first offer your potential employer makes – especially if you’re currently stuck in a job you hate, or floating on a wave of bonhomie. Yet it’s absolutely vital you negotiate hard at this stage, not least because all of your future salaries and pay rises within that organization will be pegged to your initial starting salary – so you want that figure to be as high as possible. Bear in mind too, that new job offer salaries are almost always at the bottom of the pay range for the role in question, as employers are expecting you to negotiate. Here are a few pointers on how to play your cards right:
Remember your advantage
Most employers don’t particularly love the recruitment process – it’s usually time-consuming, often boring and always expensive. If someone’s made you a job offer, then they’re probably hoping all of that is at an end, which is something you can and should use to your advantage. As their chosen ‘ideal candidate’, you actually hold a great deal of power at this stage, so, money-wise, go in for the kill.
Keep schtum
Try to sidestep being pinned to a salary too early on in the interview process, as you run the risk of either overpricing or underselling yourself. If pressed, give a broad range as opposed to a specific figure. If the interview process reveals that the job requires more from you than you initially thought, don’t be afraid to revise that figure upwards when it comes up again – just be upfront about your reasons for doing so.
Play it cool
It’ll probably feel incredibly counter-intuitive, but don’t be too effusive or grateful in response to a new job offer, or say anything implying that you accepting the job is pretty much a done deal. If your would-be employer feels like you’re probably going to accept the job come what may, then they’ve got very little incentive to improve on their offer. Keep your interactions pleasant, but neutral and non-committal.
Take your time
If you’ve been caught off-guard by an offer (i.e. if it’s made over the phone or in person, as opposed to via email), don’t feel pressured into responding to the salary on offer straight away. You’re perfectly within your rights to ask for a little time to think it over, at which point you can gather your thoughts and build your case for a sweeter deal.
SETTING YOUR RATES
Particularly when quoting for bigger projects or commissions, you should always ask potential clients for their budget first, rather than quoting blind. Doing this will help you avoid misquoting so you don’t come in wildly beyond their expectations, or lowball yourself and leave money on the table. If it seems like a client’s fee really won’t stretch to your rates but you’re keen to make it work, instead of just slashing your rates try to see if there’s room to negotiate on the deliverables (i.e. doing less work for them) – thereby still attaching the same level of value to your work.
REVIEWING YOUR RATES
If you’re a freelancer, make sure you review your rates regularly. Have you recently been published in a few prestigious outlets, or worked for a well-known brand? Think about whether that affects your value and adjust your rates accordingly. You should be aiming for a steady increase over time. Don’t be afraid to (politely) raise rates with regular clients too, although generally speaking don’t do this more than once a year. Simply let them know that your rates will be going up for future jobs, and maybe offer to work one more project at your old rate to foster a bit of goodwill. If they refuse or are reluctant, consider slowly phasing them out over time and looking for clients who are willing to pay you what you’re worth.
WORKING FOR FREE
An unfortunate reality of working in the creative industries is that, particularly when you’re just starting out, you’ll often be expected to work for free. Think of it as a (really crap) rite of passage. If the amount of money on offer for a project is ‘none’, make sure you’re getting something tangible out of the deal that makes it worth your while, whether that’s access, a referral, or a bigger platform. Don’t be shy about asking for those things upfront either – don’t assume they’ll just magically come your way.
Still – rite of passage or not – a key part of knowing your worth comes down to always assigning at least a nominal value to your time and output. As you gain more experience, there’ll probably still be a few rare occasions where the exposure, prestige, or contacts gained from a project can justify working for free or reduced rates, but, generally speaking, exposure doesn’t pay the bills. Always ask to be paid, especially if you’d be devoting time to the project in question at the expense of actual paid work. The expectation of free labour within the creative industries is rampant, but try not to be flattered (or intimidated) into accepting unpaid work. Clients who claim to have ‘no budget for this unfortunately’ often can and will conjure up at least a small fee if you outright decline unpaid work. Sometimes it just takes a bit of negotiation. Be very wary of potential clients who tell you that an unpaid project ‘will be good for your portfolio’. That’s your decision, not theirs.
Chapter 6
MONEY TALKS PART II: TAKING CARE OF BUSINESS
MANAGING YOUR AFFAIRS
‘My advice to women in general: even if you’re doing a nine-to-five job, treat yourself like a boss. Not arrogant, but be sure of what you want.’
– Nicki Minaj, rapper
So payday’s arrived,
or that magazine you wrote for six months ago has finally processed your invoice – but how do you manage your money once you’ve got it? Glad you asked: welcome to Business 101.
BUDGETING
A simple rule for figuring out how much you should be spending, and on what, is the 50/30/20 rule. Essentially, no more than 50 per cent of your take-home income should go towards essentials such as rent, utilities, food and transportation. Aim to put at least 20 per cent of your income towards financial obligations such as pension contributions (yes, really), emergency savings, student loan repayments and general debt clearance. The final 30 per cent of your income is for the fun stuff: non-essentials such as new clothes, eating out and holidays.
You might need to tweak the proportions a little depending on your individual situation – sticking to the 50 per cent rule is obviously more difficult if, for instance, you live in an expensive city (hiya London), where rent alone takes up a more-than-ideal chunk of your salary. Overall, however, the 50/30/20 guideline is a good starting point for budgeting newbies.
PAY YOURSELF FIRST
How long would your savings last if you couldn’t work, or lost your job? The answer should be at least three to six months. That means three to six months of being able to cover your rent, bills and day-to-day living expenses. Your spending priority before anything else should be making sure you have a comfortable financial cushion should things go wrong – what Paulette Perhach calls a ‘fuck off fund’. When you get paid, transfer money into your savings account before doing anything else, or set up a monthly direct debit if that makes things easier. Think of this nest egg as your emergency parachute out of bad situations. Don’t neglect it.
TRACKING SPENDING
In an increasingly cashless world, it can be difficult to keep track of your spending. Check your bank balance regularly even if it pains you to do so – in fact, check your bank balance regularly especially if it pains you to do so. Most banks offer to text you weekly updates so you know where you stand. Every few months, take fifteen minutes to scrutinize your bank transactions to get a clearer idea of what you’re spending money on. Chances are you’ll discover unexpected expenditures you hadn’t factored in, and areas to cut back on. If you’re Stateside, the Mint app is brilliant for tracking spending and creating budgets, while UK banking service Monzo is supported by an app that organizes all your bank transactions by category, making analysing your spending habits as easy as scrolling through Instagram.
FREELANCER FINANCES: TAXES
If you’re self-employed, tax is a little bit more complicated than just sitting back and having your employer take care of everything. First up – get a decent accountant. It’s money well spent, will save you time and generally just make your life a whole lot easier. A good accountant will also help you hang on to more of your income by advising on the most tax-efficient way of accounting for your earnings, whether that means incorporating as a company or reporting your income across different fiscal years.
Keeping track of tax owed on a monthly or quarterly basis and setting aside provisions accordingly will help you avoid getting caught short come tax season – if in doubt, over-save as opposed to under-save. That way if you have anything left over once you’ve paid your tax bill, you can treat yourself! Take fifteen minutes to set up an easy-access ISA to deposit your tax provision into, as money saved in ISAs is untaxed and can be interest-generating – so you can make your money go that little bit further before handing it over to the taxman. Some types of ISAs are riskier investments than others though, so make sure you consult an independent financial adviser and are fully clued-up before you stash your cash.
FREELANCER FINANCES: EXPENSES
If you’re self-employed, many of the costs incurred in the running of your business (which technically is you) can be deducted from your total income to work out your taxable profit. Make sure you’re clear on the various deductions, reliefs and allowances you’re entitled to, as they’re more extensive than people often realize. File your expenses once a month instead of leaving it until tax season to decipher a pile of tattered receipts; paid-for accounting software such as Xero, FreeAgent and Freshbooks are all great at helping you keep track of your income and expenditure. FreeAgent has the added benefit of allowing you to upload photos of receipts from your phone on the go, so you don’t end up faffing around with endless bits of paper, or worse, forgetting to log your expenses altogether.
FREELANCER FINANCES: MANAGING YOUR CASH FLOW
Much like death and taxes, irregular cash flow is an unfortunate but inevitable fact of life for the self-employed. With that in mind, try to resist the urge to splurge after a big fee comes through, given that there might potentially be some leaner periods around the corner. Instead, pay yourself a set monthly salary, regardless of your fluctuating earnings. Building up a financial buffer so you’re not dependent on one particular invoice – or beholden to one particular client – will allow you to make decisions about the kind of work you do from a place of security, not desperation. Regardless of whether you’re set up as a sole trader or decide to incorporate as a company, having separate bank accounts for your business and personal expenditure will make managing your income far easier, and prove extremely handy when tax return season rolls around.
FREELANCER FINANCES: CONTRACTS AND SOWS
You should always get a written contract clearly outlining the terms of any project you’re about to undertake, especially if you’re working for a new client. It might seem overly formal, but having some kind of written agreement in place is vital for clarifying everyone’s expectations, and protects both parties. As a starting point, your contract should spell out:
•The SOW (scope of work): outlining what is included as part of your fee, and what isn’t.
•Details on how work that falls out of scope will be billed.
•A payment schedule: especially for larger projects and those where you might incur third-party costs on behalf of your client, being paid 33–50 per cent upfront is fairly standard practice.
•Details on who’ll retain ownership of intellectual property rights for the work created, and a clear licensing agreement if relevant.
•Project timings and deadlines: be sure to include client feedback turnaround times too. You don’t want a project being dragged out by a client who’s slow to respond.
Always create a clear and itemized breakdown of the project’s deliverables, so that your client understands exactly how their fee has been put together, as opposed to mentally assigning a lump sum to an overall project. Not only does that instil confidence in you, it also means that if something gets cut (or goes over), both parties know what proportion of the budget that affects. When it comes to putting a project scope together, transparency is key.
Depending on the type and scale of the project in question, you should also consider including a cancellation clause that makes provision for a ‘kill fee’ – so that if for some reason the project is cancelled after you’ve already started working on it, you still get at least partial compensation for your efforts. Ask around among creatives who do similar work so you’re clear on what the standard terms are for your line of work – the kind of contract a writer might sign can be fairly different from that of a designer or illustrator.
FREELANCER FINANCES: INVOICING CLIENTS
You should have a clear and consistent invoicing system that keeps a record of the payment status of every job and tracks your invoices meticulously. It doesn’t have to be anything fancy – a simple Excel spreadsheet will do the trick, and there are plenty of reliable templates freely available online. Keep a copy of every invoice you send or receive, and be sure to include the following details on all of your invoices:
•Your name/company name.
•Company number (if applicable).
•VAT number (if registered).
•Your registered office address.
•The word ‘Invoice’ on the document.
•A unique
invoice number to help you keep track.
•The name and address of your client.
•The date, so you have proof of when the invoice was submitted.
•Item and description: briefly outline the service provided, and give a breakdown of time spent if your final fee is based on a day rate.
•Payment terms: include clear payment deadlines and a late payment clause that stipulates penalties for clients who fail to pay you on time.
•Payment details: make it clear how and to whom payments should be made. Include your bank’s name, account number and sort code.
•Any relevant job/PO number issued by your client.
•Details of whoever commissioned you for reference, particularly if you’re invoicing the accounts department of a large company.
FREELANCER FINANCES: DEALING WITH LATE PAYMENT
Set aside a weekly time slot to chase outstanding invoices, the bane of every freelancer’s life. As well as including late payment clauses on your invoices (and enforcing them), another way of ensuring timely payment is to include terms on your contracts that specify intellectual property isn’t transferred to your client until they’ve paid you in full. Essentially, this means that the work you’ve done isn’t theirs to use until they’ve paid you, which gives you greater leverage and can be particularly useful if you’ve been commissioned to create work where ownership of the intellectual property in question is important.
Little Black Book Page 3