Making the transition from Inhouse SEO to Self Employed SEO Consultant

I have been making 6 figures as an inhouse SEO, but I just got laid off after completing a major successful project. As I collect unemployment, spend the rest of my great severance package, and hit the pavement for another position... I wonder do I want to work full time for a company? I have found a bunch of contract projects... but I have no idea what to charge to cover my costs and still bring in the kind of money I'm used to.

How do you make the transition from employee to consultant? What do you charge to keep the same amount of money coming in, plus keep up health insurance and cover all your taxes and expences? Let's say I want $2000 for a project what do I have to charge to actually take home that amount? It is not $2000, it's much more.

Anyone have any advice?

Swirleigh.....sorry to hear you got laid off. You have a lot of questions here so I'll try to do my best to help out.

First if you want to NET $2,000 on a project then what you charge will have to be about 30-50% more $2600 - $3000. If you go self employed you have to pay all of your social security and Medicare. Your company was paying 6.2% for SS and 1.45% for Medicare and you were paying the same. Now you have to pay all so 15% of your gross goes to the Feds. A smaller amount goes to the state of California but be prepared to pay about $500.00 quarterly to the state if your net goal is 100K.

If you incorporate you need a good bank roll to get started but you pay yourself as President of the company and your company pays the. 6.2% and 1.45%. Then you have to pay quarterly corporate taxes too.

As for what to charge clients. My suggestion is to do a market study and find a price point in between the big SEO firms and small ones (just a suggestion). I found charging by hour works the best for on-page optimization but I have a fixed charge for advanced keyword research, link building, SEO training, public speaking and some other services. Build in 10% for paying for referrals to and find some web designers who don't do SEO. You can get a lot of clients that way. Of course you are not limited to the Bay area either. I'm in So. Cal and about half of my clients are So. Cal based. Most I have never met either so your location doesn't really matter.

Consider what services you want to offer too. Do you want to do SEM and SEO. Do you want to provide other Internet marketing services? I do SEM on a limited basis for retained clients. It takes time and limits your opportunity to bill for more hours unless you can hire someone to manage it and/or sub-contract to.

For me the toughest part is finding clients that "get it". Setting expectations is very difficult and can be time consuming. Make sure everything is written and signed too.

I'm lucky because I have a couple of large clients that carry me so I'm not really in need of new clients. I'm very selective about the communication style of clients and interview them while they think they are interviewing me. I think if you can find a similar situation where you can get a retained monthly fee for SEO from two or three firms and then choose smaller clients as time allows is a great way to make a good living. You might be more ambitious than me and want to dominate the SEO world though.

Working as a retained contractor for less than 100K and starting your business on the side is also a great way to build your business.

Do you want to stay corporate? If you can find a gig that pays 100K you should consider it. Netting 100K on your own isn't that common in the SEO industry. You don't have to take my word for it. You can read the results of 3000 SEO's and SEM's surveyed by SEOMoz at this link:

http://www.seomoz.org/dp/seo-industry-survey-results

Next if you are confident of your SEO skills and have some money to invest find companies who will pay you a commission on sales generated that you create through SEO. I have a program with a So. Cal based health insurance firm and I receive 10% monthly commission on group and individual health insurance policies that come in through the web. It took 16 months to get going but my commissions are starting to exceed 1k a month and should be close to 5k this time next year.

Lastly....work on your own site(s) and forget consulting. A good percentage of the members here own their own businesses and do their own SEO. The risk might seem high at first but what kind of risk do you face every time someone decides to lay you off again?

Feel free to contact me off line. Call or email. After 2:00 p.m. PST mid-week works best.

Good luck!

If you can avoid doing SEO for others that's best... If you're worth your SEO salt why not do your own projects?

Obviously there is "no net" e.g. if you can't perform you as the paying client isn't going to pay you the consultant... but you have an edge that most companies that make money online don't have - you are your own ace in the hole.

There are big problems doing SEO for others including:

1. The 1st issue - "it ain't what you did for me - it's what are you doing for me lately"? If you want all your fees up front you don't get many clients - so you build your contracts on a monthly budget that's affordable. Most times though if you achieve success the client want more of the same [rather than paying for what they already have]. You can point to your contract and say "it's in writing"... but when they stop paying... they say "sue me"... and as a small business you tend to not have the resources [people, money, or power] to sit in court or pay a lawyer to.
2. The 2nd issue - you will always have some contracts where the fulfillment aspect can't be achieved for the fees you set based on the current competitive landscape that you didn't know in advance. While you can clause yourself to protect your interests the problem is $$$ - you don't get paid for what you can't do. [Even if the problem is the client doing or not doing something - that's your failure not theirs... they have the money you want.]
3. The 3rd issue - the moving target... a good example of this was when Google introduced supplemental results. A shift in at the search engine end - makes your strategies unpredictable in reseources needed, what those are, and their costs... you can price your model out and over months find your "quote" is eating away your net profits... client's don't like being told "more money please".

There are many more... but your opening comment is equally ensightful:



From the client-side right? Obviously from the owners side things were not so rosy... they rarely discontinue things that work well...

Becoming your own business 'consultant' is not very easy... there is a big difference between being handed a project to do... and finding those on your own... and believe me you'll be pumped for free information, free advice, free proposals, free reports, free this and free that and for everyone that becomes a paid contract you have 10 that you wasted hours on for no money... and then you have the issues I mentioned earlier.

Find a couple juicy opportunities and start working on them while you have UI [and] if UI have any retraining pots to help in those areas of opportunity - "USE IT" to get ahead start.

Just adding to the other two posters excellent points....

Strategic alliances are IMO one of the best business models to become a successful Small to Meidum Enterprise (SME). Do some consideration of other people/businesses you know. Or seek out businesses/people that you believe could benefit from increased web presence. Approach them with a patnership proposal. ie what I did with my parttner basically our agreement was "You run the business and I will grow the business". This is a very effective business model if you pick the right product to promote.

The ability to capture a market wether local/regional/national or global can turn a smallish business into a profitable bigger business very quickly.

Best of luck with your future...

Wow. Wonderful advice everyone. Thank you so much for your time and the well thought out answers.

I've been doing SEO for 9 years. The first 7 was at a SEO firm. They made their money to branch out into other new business ideas on the money I and one other SEO made them. There, I got paid half what I've been getting the last two years working inhouse. I was very successful inhouse. I got a 25k raise after the 1st year for raising ranks, traffic and conversions. This year I helped develop 4 sites from scratch that are all tip top listing already. Unbelievably incredibly great rankings... which allows me to ask for even more money for a full time position now.

I love doing SEO. Love taking a site noone can find, or creating a site and move to tip top rankings. I hate SEM though, too much like work.

I wish I could come up with a great idea to sell online and top list myself... but for now, I'm happy just helping others get their ideas found. I'll keep my mind open to find one though.

Thanks again! And wish me luck!

...hopefully the end of that statement doesn't sound like: "so long as someone else is willing to pay for the risk of doing it.

I've helped alot of people get a start in this racket and the bigger drip I have about that... almost all "needed the work" - "few wanted to work"... there is a big difference.



If you want to do both give a shout... I've done my time and not wanting to do SEO period [I'm just really good at it]... so if you wantta run with something... you can... but I'm not an employer in need of an employee looking for security.