An American Editor

May 29, 2013

Business of Editing: Solopreneur or “Company” (II)

Filed under: Business of Editing — Rich Adin @ 4:00 am
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In “Business of Editing: Solopreneur or ‘Company’ (I)”, Ruth Thaler-Carter made her case for solopreneurship. There are a couple of fundamental points that I want to address.

An underlying premise of Ruth’s argument is that she is satisfied with her level of income. Although not stated this way, I think that is an implicit recognition that there is a income-limiting factor that is self-imposed by the solopreneurship. That limiting factor is the focus on the smaller projects.

Consider it from just one angle. When Ruth takes on a 25-page journal article, the work is finished in a (relatively) short period of time and Ruth now needs to find additional work. The nature of dealing with small projects it that there is a frequent cycle of work-no work. Ruth may be able to find another project in a day or a week, but the point is that because the project is small it provides a finite return and requires faster return to self-marketing.

When I take on a 6,000-page project, that project could provide work for months, depending on the number of editors needed and the schedule. Large projects limit the work-no work cycle. From a financial perspective, too, the larger project is better because it assures a steady income for a longer period of time.

But that is only one aspect of the large versus small project scenario Ruth discussed. (I am ignoring her statement, “As an editing company, I might miss out on smaller projects that I really enjoy doing.” because it assumes — falsely — that only small projects are enjoyable. Personally, I find book-length and longer projects significantly more enjoyable than short projects. It also falsely assumes that an editing company cannot or does not do small projects.) Ruth’s foundation is that both the solopreneur and the company work on one project at a time. I think that is more true of the solopreneur than of the company; it certainly is not true of my company where we work on multiple projects — or the equivalent — simultaneously.

The single-versus-multiple project is important only from a revenue-generating perspective. If you can only work on one project at a time — and, let’s admit it, an editor can only edit one project at a time even if the editor has three projects in-house for editing; in that case, we edit them sequentially, not simultaneously — and your hourly rate is $30, the most you earn is $30 for one hour of work. On the other hand, if you are able to have work done simultaneously on multiple projects, you can earn that same $30 plus a portion of the other projects.

Another assumption made in the solopreneur argument is that all companies are similarly structured. It does not account for the various arrangements that can be made that can make up a company. The argument confuses the presentation to the world with the arrangement between members of the company. A company can be a traditional employer-employee arrangement or it can be an association or it can be one of myriad other arrangements. But regardless of the arrangement, the presentation to the world of clients is a presentation of unity. It is not safe to assume, as Ruth did, that, depending on the arrangement, she couldn’t end up with “the whole fee [for her work] in [her] pocket, rather than some of it going to colleagues, employees, or subcontractors.”

Consider one possible arrangement. The agreement between the editors is that the editor who brings in the project receives 25% of the fees generated by the project. In this case, the editor has to do nothing to earn the 25% except find the project and sign it on. But suppose it is a project that requires three editors, and the finder is one of the three editors who will edit the project. In this case, the finder would receive 100% of the fee for the material she edits plus 25% of the fee generated by the editing of the other two editors. Doesn’t the finding editor still get “the whole fee in pocket” plus some?

Even if the finding editor received no fee from the other editors’ work, she still would be receiving “the whole fee in pocket” for her work, just the same as if the client’s in-house editor had divided the project among three editors rather than the finding editor dividing the project.

Another assumption Ruth makes to the company approach is that company fees are higher and authors might not be able to afford them. Just as easily, the fees might be significantly lower than those of the solopreneur. Considering the lack of standardization of fees in the editing industry, I’m not sure how one can draw this conclusion. Ruth’s rationale is that companies have overhead and other expenses that solopreneurs don’t have.

Again, this depends on how the company is arranged. In the association-type company where one editor finds the work and then subcontracts parts of the work to other editors, the only increase in costs would be the cost of check writing to pay the subcontractors, a very nominal sum in view of the increased work and fee opportunities. Even in a traditional structure company there need not be significantly greater overhead. In fact, based on my own experience, I can see where the overhead of a traditional company could be less, as well as more, than that of the solopreneur. The solopreneur has to bear any health insurance costs, which can be staggering (until recently, e.g., I was paying $1500 a month) whereas a company doesn’t need to offer it at all. On the other hand, companies do have costs that solopreneurs do not have, such as being required to carry worker’s compensation and disability insurance and contributing half of the cost of Social Security to anyone receiving wages. I suspect that in the end it balances out.

There is no easy, single solution. What it comes down to is trying to predict what the market is going to require in the future. The trends I see increasingly point toward collaboration among editors in some type of arrangement as a company. I think it will become increasingly difficult for the solopreneur to find sufficient amounts of work that pays enough to keep the lights on. The reasons for being a solopreneur will not change but the economics of solopreneurship will.

The argument about solopreneur versus company, however, misses a key point. The primary purpose of a company of editors is to create opportunities to increase work availability and income. This is done by relieving diminishing in-house staff of the responsibility of finding and managing multiple editors. The arrangements between the editors are not what matters; what matters is that a cohesive group of editors who can work together when needed do so and present themselves to potential clients as having that capability. In addition, it enables editors with different areas of expertise to contribute to the group by expanding the areas in which the group can comfortably work.

It is at least something to think about and not dismiss by simply saying, “I became a freelancer so I could work on my own,” especially if what you are earning is less than what you would like to earn or need to earn.

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