In addition to the downloadable transcript in PDF, the following highlights some of the most popular tweets from the chat:

Be sure to check out the transcript in PDF for the full discussion. Note that the transcript is in reverse chronological order.

If you weren’t able to join us this week, weigh in on the chat questions below!

The #solopr chat – held each Wednesday from 1-2 p.m. Eastern – is a weekly ritual for some of the most savvy Solo PR Pros on Twitter. Anyone with a Twitter account is welcome to participate – see Join Us for the #solopr Chat on Twitter to find out how!

The truth is that big-money consultant may not be pocketing as much as you think. When setting rates, consultants must take the following into account:

1. Taxes

Virtually all countries have increased tax requirements for businesses. If based in the U.S., a self-employed business owner pays both the employer and employee portions of FICA (known by the misnomer, “SE tax”). So, rather than paying approximately 7.5% of earnings for Medicare and Social Security (as traditionally-employed workers do), an independent consultant pays the full 15%.

As a result, many U.S.-based consultants pay roughly 43% of every dollar earned (28% tax bracket + 15% social security) to the IRS (the tax rate is marginalized, so this figure is rounded up). While the ability to deduct business expenses from income softens the blow a bit, there is no doubt about it – being a business owner comes with increased tax responsibilities.

2. Unbillable Time

It’s important to realize that working 40+ hours a week is not the same as billing 40+ hours a week. Consultants don’t get paid for time spent bookkeeping, networking, marketing, and a variety of other non-billable activities that need handling when you run a business. Consulting fees must take this downtime into account.

3. Expenses

Everything from professional memberships to paperclips – a self-employed consultant buys it all. There’s no company credit card for covering travel expenses, conference fees, or computer repairs. All of these charges come directly off consultant’s bottom line, and have to be built into the overall rate.

4. Support costs

You may not see their names on the company roster, but self-employed consultants and business owners usually have an accountant, possibly a lawyer, and other support vendors (such as virtual assistants, tech support, etc.) on call. The cost of these services is absorbed by the consultant, and must be reflected in client fees.

A consultancy is a business – one that comes with many of the same responsibilities as larger agencies. We’re firm believers that the rewards (monetary and otherwise) of being a solo PR pro far outweigh the downsides. But if you’re a new independent consultant, don’t learn about the additional financial requirements the hard way – make sure your fees are sufficient to cover these items and still provide you with a sustainable living.

If you’re looking to hire an independent consultant, before you balk at their proposed fee, realize the majority of it isn’t going into their wallet. Please keep these additional burdens, which you may not have considered previously, in mind.

What’s been your experience? If you’re a solo PR pro, were there any expenses that surprised you when you started out?

In addition to continuing to provide a downloadable transcript in PDF each week, we’re pleased this week to begin providing a Storify summary to highlight some of the most popular tweets from each chat.

Be sure to check out the transcript in PDF for the full discussion. Note that the transcript is in reverse chronological order.

If you weren’t able to join us this week, please let us know how you’d respond to the chat questions below!

The #solopr chat – held each Wednesday from 1-2 p.m. Eastern – is a weekly ritual for some of the most savvy Solo PR Pros on Twitter. Anyone with a Twitter account is welcome to participate – see Join Us for the #solopr Chat on Twitter to find out how!

Thanks to Jennifer Spivak for compiling this post.

In addition to showing clients that yours is a “real” business and not a sofa sideline, the right kind of business insurance policies can protect you from a rainy day and give you peace of mind, too. Though this post is not a substitute for the advice of an insurance professional, by educating yourself now about the types of business insurance available, you can be ready if/when you need it.

Commercial General Liability
This is the “business liability” insurance that clients most often ask you to have. Why? Because this type helps covers them if, for example, you injure someone while driving on business on their behalf.

The first time a potential client says you must carry $1 million in general liability coverage (or more) to win their business, the tendency is to freak out! But, no need to worry. Fortunately, your homeowner’s insurance carrier can usually provide this for you, and it’s typically only a couple hundred dollars a year.

Professional Liability Coverage (Errors and Omissions)
Because of its relatively high cost, whether to purchase “E&O” insurance is a tough judgment call for many independent consultants. It’s designed to protect you from any financial loses your work may inadvertently cause a client, due to negligence or inadequate quality controls.

When you analyze your options, take into account the industries you serve and the amount of litigation in them, as well as your level of exposure. This type of insurance is best purchased through an insurance broker (as providers vary by state) – ask your homeowner or car insurance provider for a broker recommendation.

Business Property Coverage
This insurance protects your building, its contents, and against loss of income. If you work from home, a certain amount of business property coverage may be included in your homeowner’s policy, so be sure to ask. If you need additional coverage, the same company can usually provide you with both – at a discount.

Business Interruption Coverage
This coverage protects against losses due to a temporary shutdown (as with a fire), and provides reimbursement for lost net profits and necessary continuing expenses. Though it sounds good, be sure to crunch the numbers and read the fine print: sometimes you must be out of work for several months before it kicks in, and you’d be better off putting the money this policy would cost into savings (which you could tap in the event of an emergency).

Personal Liability Umbrella (Excess Liability Policy)
This insurance provides protection once the limits of a standard liability policy have been met. Though this is not technically business insurance, it can sometimes be combined with your other policies at a given insurance carrier (if you have both business and personal with the same company) at a steep discount, giving you more liability coverage in all aspects of your life.

What’s been your experience with business insurance? Do you have some minimal coverage? Any tips for saving money? Let us know in the comments.

1. How do you build a national media contact list when you don’t have budget to buy one? #solopr

2. Have you ever used mindmap software (e.g., Mindnode, iThoughts) for key messages, showing hierarchies, etc.? #solopr

3. When you’re collaborating with a client on their social network presences, how do you handle it logistically? #solopr

4. We avoided the requisite “resolutions” post on the #solopr blog, but do you have any you’d like to share? How can we help?

Be sure to check out the transcript in PDF for the full discussion. Note that the transcript is in reverse chronological order.

If you weren’t able to join us this week, please let us know how you’d respond to the chat questions below!

The #solopr chat – held each Wednesday from 1-2 p.m. Eastern – is a weekly ritual for some of the most savvy Solo PR Pros on Twitter. Anyone with a Twitter account is welcome to participate – see Join Us for the #solopr Chat on Twitter to find out how!

Thanks to Jennifer Spivak for compiling this post.

This week on the Solo PR PRO Premium membership site, as everyone prepares for 2012, we’ve released Part One of a multi-part series called Show Me the Money!, which steps members through the process of managing expenses, setting rates, and maximizing profits with multiple 20+ page ebooks, worksheets and templates. Being able to produce resource-intensive courses like this is why we launched the Premium site in November, so we’re excited to birth this baby!

As we worked on this course, we’ve identified some of the most common mistakes consultants make when setting their fees. I had a chance to sit down with Show Me the Money! co-author, Jenny Schmitt (@Cloudspark on Twitter) and chat about this critical topic. (note: there were technical difficulties and the video on my end wasn’t recorded, but that’s OK — Jenny is the one you want to see!)

If you can’t see the video, you can watch it on YouTube here.

Do you agree? What mistakes have you seen consultants make, and what issues do you still struggle with when it comes to setting your rates?

This post is by Solo PR Pro Content and Community Specialist, Heather Rast.

Last week, Kellye celebrated her 16^th year as an independent PR practitioner. Her post, “Celebrating 16 Years And Counting,” called out three key lessons for those wishing to commit to a solo career path. I think her points are important to remember. Working for yourself isn’t for everyone. And even if consulting is a right fit for your personality and work style, it certainly doesn’t mean it’s easy or simple.

A year ago last week, my digital marketing company was born. While I recommend a lengthy planning and preparation period (pro tip: while gainfully employed) to help you become familiar with the myriad things you never had to think of before (well in advance of making the big leap), that wasn’t the case with me. “On the job training” took on new meaning as I tried to figure out how to build something while doing work to earn the revenue to fuel said something. It was tough. But thankfully, I had a lot of people in my corner. And more than one hero helped save my day.

1. Business contacts – former clients, co-workers, network connections, and supervisors. When I went out on my own I thought about all of the people I admired who were doing good work or undertaking interesting projects. I systematically worked my way down the list with a series of breakfasts, lunches, and stolen coffee breaks to probe their brains for business leads, suggestions for setting up my company framework, and venues for gaining exposure.
2. Relatives – my father-in-law once owned a successful industrial equipment business. Even though a few of his methods were outdated and our products vastly different , he helped me focus on ways to serve my customers. If there’s one thing about business that transcends technology, it’s how our users need to feel attended to.
3. Career coach – I’m not sure I buy into the notion of life coach and what-not, but I’ll attest to the value a good career advisor can provide. Fortunately, I’d worked with a fabulous one while with a former employer, so I already had a relationship and the confidence that she could help me step off the roller coaster I’d found myself on. Even if your budget is tight, I can’t understate the value of someone who can help you understand your strengths, how to use them to your advantage, and how to honestly look at your areas that need work.
4. My family – My husband and I are both pretty independent people and have always had separate pursuits as well as an appreciation for each others’ space. My kids have grown up watching me work at my computer while attending to other family tasks. Even though they’ve seen me work hard, long hours, that was nothing compared to this past year. I’m saddened by the little moments I know I’ve lost. But I’m eternally grateful this group of special people support what I’m doing.
5. Friends – I had more than a little help from my friends. A couple awarded me some work based on their first-hand knowledge of my capabilities. Virtual-born relationships were infinitely helpful, too, as a few of the friends I met via social media helped me uncover some top-notch opportunities to publish my writing.

To call this a Thanksgiving post might be a misnomer. The timing isn’t coincidental, of course. But for me, this holiday is symbolic of a much deeper appreciation of the people who gave their time and energy to guide me this past year. Without their generosity, compassion, and patience (I ask a lot of questions), I might have given up. I might have given in to the fear and self-doubt.

The fact that I didn’t says more about those people – and their collective wisdom – than me.

What blessings are you thankful for this year? Did you have heroes help get your business off the ground?

—-

This post contributed by Heather Rast, Content and Community Specialist for Solo PR Pro. Heather is Principal of Insights & Ingenuity, a Cedar Rapids digital marketingcompany. She develops brand identity and marketing communications plans for small businesses that distinguish them from the competition. Her content planning and online community-building work for larger organizations helps them better serve their consumers.

In last weeks’ #SoloPR chat, we talked about the circumstances in which an indie consultant might elect to decline a work offer and the best ways to handle communicating a “No, thank you” decision to the potential client.  A few of my favorite comments from the chat are below:

@dariasteigman:  It’s not b/c we need work less as we “mature.” It’s b/c we learn some work isn’t worth having. Big difference. #solopr

@dwannolsen: 15 yrs ago, I said YES way more. Now, I value, my time, my brand and RESULTS enough to pass on purpose. #solopr

Sometimes When You Say No To Them, You’re Saying Yes To Yourself

I think there are two important messages woven in these tweets. One is that in time, as an indie gains experience running their own business, they become better attuned to the types of projects that really further their business goals beyond straight revenue generation. Sure, revenue is important. But to build a viable, sustainable business, an indie must look at each project opportunity and ask “How does this support the reputation I want to build? Will it gain me experience in a sector I want to penetrate or access to people I consider strategic to my next-phase plans? Does it play to my strengths or give me a chance to grow an essential skill?”

And while these (or other) philosophical questions run through your head, your inner analyst is assessing whether the prospect’s communication style is a match for yours and how well you sense they’ll accept your counsel. Reality is, some clients think professional marketing communications services (including PR) should be inexpensive and, because you’re being paid, you should make magic happen. Even if they don’t give you the info you asked for when you needed it.

You may have but a moment to sort through these questions and assimilate a response, so it’s important to think through your priorities and hone your instincts early. If a project as it’s presented doesn’t feel right, a client’s demeanor puts you off, or there’s no indication you can achieve respectful collaboration, it’s best to bow out.

Assignments You Can’t Afford To Take

I once had a referral (great, right?) approach me about taking on some contract work. This client had developed a pretty nifty SaaS product aimed at B2B sales forces. With some pretty impressive venture funding, this client wanted some work done that I knew I could do. Wrinkles began to pop out, though, when it was clear my contact had previously been paying an intern to handle some tactical work and expected to pay me the same rate. I wasn’t comfortable taking over the tactics without planning and implementing a guiding strategy first (who knew for sure if those were even the right tactics?). Plus, I bring more to the table than an intern.

I elected to develop a detailed proposal outlining service components at a rate I believed appropriate. Not only did the client heartily disagree, but he chose to insult me in a petty way and make sure the referring party knew his opinion of me.

This wasn’t about the breadth and quality of the work I could do or how what I proposed might achieve business goals. It was about the price my contact placed on getting some posts published and tweets chirped.  He wasn’t looking for a partner. He wanted an intern.  That’s not me.

Missed Opportunities That Yield More

I know, his actions said more about him than about me. Whether you’re the consultant or the client, it’s always best to handle evaluations and negotiations with as much circumspection as you can muster. It can be hard to let incidences like this one go (Could I have done anything differently? Does the referrer now think badly of me?), but once you do, you’ll realize taking the high road – suggesting the right (in this case, more expensive) solution instead of kowtowing to what he’s willing to pay or just mindlessly doing the tactical stuff for the intern price – means you’re in a defensible position. It may also mean your calendar’s free to take on the kind of client that makes you do fist-pumps. You know, the kind of client who wants your expertise and your opinions and knows it doesn’t come at $15 per hour.

@JanetLFalk:  When I turned down the project this week, I suggested 2 others. What goes around comes around. #soloPR

@KellyeCrane: But the irony is, once you turn down work that saps your energy, usually you get *more* work! #solopr

—

This post contributed by Heather Rast, Content and Community Specialist for Solo PR Pro. Heather is Principal of Insights & Ingenuity, a Cedar Rapids digital marketing company. She develops brand identity and marketing communications plans for small businesses that distinguish them from the competition. Her content planning and online community-building work for larger organizations helps them better serve their consumers.

In that time, there have been some opportunities missed because of the public nature of our various channels. Many of you have also stated this – there are things you’d prefer not to send out to the whole world, but you’d be happy to exchange this information with others in our community.

To meet these needs, we’re happy to unveil the premium Solo PR PRO membership site, now in public beta (at special beta pricing). Specifically for us, this premium PRO content offers road-tested deliverables and downloads, a members-only Forum, a special upcoming Show Me the Money! series on setting rates, and much more.

Why do we need a PRO membership site? I did a quick video to explain the reasoning, and some of the benefits:

If you can’t view this video, watch it on YouTube.

Though some of the Solo PR PRO membership site features won’t be available until after the first of the year, we wanted to go ahead and share this beta content with you at a low initial rate (locked in for life for those who sign-up early), which will increase slowly over time for new subscribers as more content is added. That way, you can start putting the current content to use as you plan for 2012 (never too early to start!).

What does it cost?
As indie consultants, price is always a key consideration – as it should be. Though we’ve seen membership sites that cost $50 a month or more (and they have generic content that often doesn’t apply to indie consultants like us), we’re doing our best to keep costs low so everyone can participate.

The deal: While we’re still in beta for the next few weeks, you can join for just $14 a month, and be a Charter member! The cool part is: you’ll lock in this monthly rate for as long as you maintain your PRO membership (but, at the risk of sounding like an infomercial, you can cancel any time). We’re also offering a money-saving Annual Subscription for just $120 for the year. In addition to the price break, the Annual Subscription offers the tax benefits of purchasing now for the year ahead.

For more details of all the offerings and to sign-up, just visit: Become a PRO Member.

We’re excited to offer something that can help you be more efficient, effective, and profitable in your business, and we fully expect that this content (especially the fee-setting info) will help many PRO members increase their profits by thousands of dollars in 2012. That’s the mission that will drive everything around this effort.

If you have any questions, just let us know in the comments. Hope you can join us!

Are You A Highly Social Animal?

Do you love to hang out by the coffee machine at work and chat? People who receive energy from working in close proximity with others for extended periods of time may have difficulty adjusting to life with limited external stimulation. Sure, even solos use the phone, attend meetings, and jump into social media discussions. But those in-between spaces are when solos are most productive, and likely feel the most fulfilled. For solo-oriented pros, water cooler talk may be the source of more frustration than relief from afternoon tedium.

Does Networking Make You Cringe?

After the point above, this one may sound counterintuitive, but successful solo pros are capable of quickly, easily slipping into networking mode for new business or when a job calls for it. If in-person events make you want to hide in the bathroom while downing your double-fisted drinks, you may want to re-think hanging out your shingle. Networking is an absolute must for developing a client base and building a web of acquaintances in key positions.

Do You Prefer To Take Anothers’ Lead?

No judgements here – this world of ours requires all types of people to run it, from dreamers to planners to doers. Achieving success on your own means, by definition, that you’re comfortable setting goals, making recommendations, and defending decisions. The person on point is you.

Are You Looking For A Smooth Ride?

Think about the picturesque 9-to-5 gig where good people show up, do good work, and go home to their personal lives. Yeah, well, being solo can be the complete opposite of that.  If you don’t want to work crazy hours while juggling 9 bouncing balls and have your mind race at all hours (“Did I remember to send that conference report?”), then you may want to re-think going solo. Or have the budget for a virtual assistant, at least. There’s probably not a solo out there who doesn’t have days when he/she wished for a clock to punch.

Are You Financially Capable?

Nothing says “you’re on your own now ” like managing the books, paying vendors, and following-up on late receivables, and it also brings the practical necessity of positive cash flow into sharp relief. If you carry high balances on your credit cards, squeak by paycheck to paycheck, or have a spouse in a precarious job situation, you may want to resolve core issues before trying to venture out on your own.  Combined with a financial cushion in the bank, the ability to delay the instant gratification of impulse purchases is a key skill for the successfully self-employed.

If You’ve Got the Goods

The most successful solos are people whose work is talked about. They leave a trail of happy clients and co-workers behind them, and have done this for most of their careers. Long hours, clattering away at a keyboard, often fly by before we realize it’s time to close down  for the night.

If you answered no to the questions above, and want to be in charge of your own destiny, you can do it! Whether you start your business now or in the future, it’s never too early to start planning.

If you’re an indie consultant, what do you think are the key qualities we need to possess? Any potential pitfalls those considering consulting should keep in mind?