The power of personal networks

While I believe that focusing on your day job generally has the possibility for greater payoffs than side gigs, I am currently under-earning based on my education and experience. I do keep an eye out for positions that would enable me to advance in my main career. However, in the meantime I have also been making a conscious effort to seek out freelance opportunities.

In order to keep as many options open as possible, I deliberately cultivate my personal networks and foster my social capital. For example, several alumni from my Ph.D. program live nearby. I make a conscious effort to meet them for happy hour or lunch once or twice each semester. It helps maintain a sense of community.

A couple of months ago, one of these friends, Shawn, posted something interesting on Facebook. He said that at the end of this semester, he would be leaving his job as a full-time adjunct at my institution (where he has been teaching for five years or so). Instead, he is taking his side gig full-time.

What he does
Shawn's side business is doing SEO for law firm websites. SEO stands for Search Engine Optimization and is basically the trick of writing copy for websites that is both 1) appealing to real people, and 2) strategically composed so that the website comes up more often in search engine results (i.e., Google or Bing). Probably almost all of you already know that, but I was shocked that almost none of our mutual friends had any idea what he was talking about.

My friend started doing SEO because his brother is an attorney and has a lot of contacts with various law firms, and it just took off. Like any freelance work it is sporadic and uncertain, but then again, so is adjuncting for a large university. However, unlike teaching, SEO work will allow Shawn to stay at home full-time with his small child (his wife is the primary breadwinner). Win-win.

I hadn't come across any interesting job postings recently that were in the salary range I am willing to accept, so I posted a comment on his news: “Teach me SEO — I am sure we can work something out!”

No interview necessary
In response, my friend offered to pick me up at work, pay for my lunch, and give me a small project right away so I could get my feet wet. As he said while we enjoyed our food, “I already know you're an excellent writer, so I don't have to interview you. I just have to show you the nuts and bolts, and you'll pick it up fast.”

He offered to pay me $20 per page, with the assumption that each page would take about an hour. “Obviously,” he explained, “in the beginning it takes longer, but the more projects you do, the faster you are able to work and the better your effective hourly rate becomes.”

I assume that he charges the law firms more than that, and keeps some money as a sort of referral bonus. Additionally, he will be editing my work for the first few projects. That works for me.

My first project was five pages, good for $100. When I asked how I'd be paid, he said he'd be writing me a personal check. I asked him to make it out to my LLC (limited-liability company) instead, and then I asked him about his business structure. Turns out he was doing business under his name and not drawing up contracts with the firms he was working with (or with me, since I was technically freelancing for him in this scenario).

My contribution
“I'm not sure that's the smartest way to run your business, especially if you're going to be doing this full-time,” I told him. Then I explained that if you do business as a sole proprietor and get sued, whoever is suing you can go after your personal assets (and your spouse's, if you're married). However, if you do everything through an LLC, only the business's assets are at risk. An LLC is a way of keeping your personal finances safe.

At first, Shawn didn't see the point. His view was that it was pretty unlikely that something would go so wrong that he'd be sued at all, let alone for an amount of money that would significantly impact his life. I mean, how badly can you mess up a website, especially if the customer reviews and approves the changes before they go live?

However, I pointed out that since Shawn's customer base consists exclusively of law firms, he'd be at a significant disadvantage if something ever did go wrong.

“Let me talk to my husband,” I offered. “I'm sure that we can work out a trade.” Since Jake changed the name and structure of his law firm in August, he had bought a website but not done very much with it. I thought that Jake might be interested in trading LLC formation for SEO work on his new site.

Turns out I was right. Jake's getting feedback on his website from someone with SEO experience; Shawn is getting his LLC formed at cost. There are some fees involved with setting up the business, which Shawn is paying, but Jake is doing all the incorporation work as well as writing the articles of organization and helping with some contract templates.

Note: Technically, barter is a form of taxable income. The IRS requires that you fill out a form 1099-B if you engage in barter for business purposes.

Going forward
Since that bit of neighborhood exchange, Shawn has given me a second, slightly larger project, and I anticipate that we'll continue to collaborate in the future. You know, with contracts and formal agreements — the way business is supposed to be run.

Once I've gained enough experience, I can start building my own client base. Shawn mostly works with firms in the state where his brother is an attorney. Since my husband is an attorney, I would have a lot of leads in Arizona. By working with law firms directly, I would also be able to charge market rate (rather than the reduced rate I am getting through Shawn).

SEO is a rapidly growing field, since so many people work and play online now. And while the barrier to entry for basic SEO services is relatively low, there are many more advanced and technical aspects that command higher prices. If I start building my skill set and reputation now, the sky's the limit.

How do you foster your social capital? Has networking improved your life in a meaningful way?

More about...Career, Side Hustles

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
40 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Justin@TheFrugalPath
7 years ago

Social networks are key to getting ahead. If you know someone who does the hiring for a company you’ll have a much easier time getting the job than someone who doesn’t know anyone in the building. It makes it easier for them because they know you background, work ethic ect…
The old saying it’s not what you know it’s who you know rings very true.

Rail
Rail
7 years ago

In the intrest of brevity I call social networks “friends”. They can help you get a job or move a bed. They help shingle your roof, or recommend a good doctor. Friendship is what human society is all about, and is at the core of our humanity.

Honey Smith
Honey Smith
7 years ago
Reply to  Rail

That’s true as far as it goes, but at a certain point I think it’s more complicated than that. There was a time that Shawn and I were friends — so much of our lives overlapped (we were taking the same classes, teaching the same types of courses, were co-presidents of an active organization with over 200 members). However, at this point we have lunch every 3 months and exchange emails maybe 2 or 3 times per month. Mostly those emails are about business, at least lately. So are we still friends? Or have we transitioned into colleagues? I’d probably… Read more »

Rail
Rail
7 years ago
Reply to  Honey Smith

We may be just arguing semantics on this one, but I kind of see what you may be talking about. True I have “Friends” and I have “Acuaintances/I know this guy” but If I didnt have at least a general feeling that they were a decent person then I wouldnt put out my time or effort to interact with them. Since Im Blue collar and not a professional maybe my social makeup is different. I come from a small town Iowa upbringing where for the most part you have somewhat of a background for most people you meet anyway. I… Read more »

Rya
Rya
7 years ago
Reply to  Honey Smith

Sorry, but I don’t think FRIENDS qualify as a “network” network. If you are trying to market a business and your only network are your friends, you won’t get very far. I guess friends are a social network but not a business network. A business network serves a particular purpose. It includes people related to the business field, people who are “players” (for lack of a better word) in the business field. Yes, you never know who knows whom, and your friend from McDonalds might know a guy from the business field you’re interested in… but that’s the exception, not… Read more »

Rail
Rail
7 years ago
Reply to  Rya

Rya. Please re-read what Honey wrote. She spoke of SOCIAL networks, and how they can be used in a business atmosphere. I have business associates myself, but I dont go to drinks with them just to kiss their rear. That used to be considered bad form. I dare say that not much is considerd bad form in the business world today.

The Catnip Gypsy
The Catnip Gypsy
7 years ago

If by networking you include word of mouth, then yes, my pet sitting business is definitely benefiting. If by networking you mean contacting and keeping up relationships with other pet sitters, then no. The other sitters in my area want nothing to do with each other – so terrified that someone will steal your clients or outbid you on a job. An LLC has so many benefits. Aside from having to fork out $500 annually to the State for the privilege of running one, my accountant is able to deduct all legitimate expenses and, when I get ready to get… Read more »

Sam
Sam
7 years ago

My old petsitter worked with a back up petsitter, so that when she was out of town she had someone to take care of her clients. When she decided to go back to a 9-5 vet job she sold her client list to her back up petsitter so the relationship did seem to benefit both of them.

Honey Smith
Honey Smith
7 years ago

Seems like there would be reasons to be collegial to others in your exact industry, but surely even if not, you could benefit by talking to other small business owners whose business structures are set up similarly (setting appointments, getting insurance, invoicing clients, etc).

Sheryl
Sheryl
7 years ago

It’s one of the oldest tricks in the job hunt search for a reason!

Does your friend know that you plan on eventually striking out on your own with this? I’d be inclined to tread a little bit carefully there just so that if and when you’re comfortable doing the SEO on your own there are no feelings hurt friendship wise.

Patrick
Patrick
7 years ago

LLCs do not protect your personal assets against all business lawsuits. If *you* do something wrong, even when acting solely in the interest of an LLC, both you and the LLC are liable. That’s not to say that it’s worthless, but if you slander someone, you’ll be on the hook for it.

http://www.litigationandtrial.com/2009/05/articles/attorney/automobile-accidents/can-i-set-up-an-llc-to-avoid-personal-liability-in-a-lawsuit/

tmr
tmr
7 years ago
Reply to  Patrick

I came here to post and make a similar point – too many people form an LLC and think that automatically protects their personal assets. In many cases, it does not, because sole proprietors are not careful enough or knowledgeable enough about keeping their LLCs entirely separate entities from their person. Since Honey’s husband is a lawyer (I think), hopefully he will counsel Shawn about the importance of doing this correctly.

Honey Smith
Honey Smith
7 years ago
Reply to  tmr

Yes, this is true. Get an EIN for your business and a business checking account, route ALL income through your business checking account, have contracts for all the work you do, etc. etc.

You can’t just set up a business; you have to run it like one.

wubbly@chubblywubbly.com
7 years ago

To deliberately cultivate social networks is not something I would do regardless of the gains. When I was living in a foreign city, lots of people wanted to be my friend because of my husband’s job. People were buttering me up and telling me things I wanted to hear because they knew the firm he was working for had a lot of openings and wanted to get a direct referral instead of going through HR. I wouldn’t mind helping out at all if these were longtime friends, but these were people I only met a few times in large social… Read more »

Jean
Jean
7 years ago

You’re missing the point of networking. People in your networks aren’t necessarily your personal friends. They are usually more business colleagues or acquaintances, or friends/colleagues of friends/colleagues with whom you have at least some low level of contact. Getting together with a group once a quarter for happy hour as Honey mentioned, joining a professional organization, or just keeping in touch via Facebook or LinkedIn can be the difference between getting that job offer and not even getting a call for an interview. Like someone else said, it’s who you know – and you don’t have to know them well.

CincyCat
CincyCat
7 years ago
Reply to  Jean

I agree with Jean. It’s like having your own personal Chamber of Commerce with whom you exchange ideas and business (or job) leads vs. tricking your friends into sitting through a direct marketing pitch by inviting them over for dinner. Not remotely the same thing. I have reached out to my professional network (on Linked In, mostly) to find everything from a forensic accountant to a caricature artist for a school fundraiser. If someone who was a passing acquaintance asked me to refer them for a job, I would be honest and say that I really don’t have an inside… Read more »

AMW
AMW
7 years ago

Networking and friendships are not the same thing. And networking does not consist of buttering people up. Networking is building relationships with people (that person in the office, that guy you volunteer with, the people at your church, etc). We all have these relationships…they are not necessarily are friends but are acquaintences. And you are not obligated to help anyone but If you heard person A was looking for a job making widgets and person B was looking for workers for his widget factory, I’m sure you would say “Hey- I know a guy”.

Flounder No More
Flounder No More
7 years ago

I realize this is not the focus of the post, but one of my pet issues is mentioned… In some high-tax States (like California specifically) the popularity of LLCs have led to “gross receipt fees” that a lot of folks don’t know about. This can lead to a nasty surprise come tax time (especially if you have a particularly good year!) There are other business structures that might be more advantageous tax-wise, while offering similar protection, depending on your State. Ask a pro before you go!

Honey Smith
Honey Smith
7 years ago

Yes, rules for LLC’s vary by state. In my state, there are no ongoing costs — once your LLC is created, you’re done. It may be different elsewhere. You can form an LLC in a state you’re not necessarily physically located in as a human being, but your LLC will be bound by the state law where IT’S located. This can have tax or other benefits. However, if you ever did get sued, would be problematic because that’s where you’d have to appear in court.

CincyCat
CincyCat
7 years ago
Reply to  Honey Smith

Ohio is similar. Once you’ve registered your LLC, that’s all you have to do. I think the fee is $25. If you’re registering a corporation (S or C corp), then you have to file articles of incorporation and you have to sign a “statement of continued existence” every few years, but other than that, there isn’t much to it.

Ohio does require that the statutory agent of the company is a resident of Ohio. If you are physically located elsewhere, then you have to appoint an S/A who lives in the state.

amber
amber
7 years ago

Honey – this was your best article yet.

Tom
Tom
7 years ago

Good luck but be aware that there is a deep, dark underworld of SEO that attracts shady characters. There is also a strong draw to this type of SEO as there is a lot of money to be made but you may have to check your morals at the door to make that money. I personally have no experience but I know that it requires a LOT of time and effort to stay ahead of the game and at the drop of a (black) hat you can lose your income stream.

Elizabeth
Elizabeth
7 years ago
Reply to  Tom

I’ve seen a multi-million dollar business go under because of black hat arbitrage. When the search engine companies catch you not playing by the rules, they can block you from showing up in searches.

Some friends of mine in the tech industry say SEO is already on its way out. I don’t know if I believe that, but it’s definitely worth cultivating other skills such as social media and content marketing if anyone is looking to make a business of it.

El Nerdo
El Nerdo
7 years ago
Reply to  Elizabeth

Agreed, when people attempt to exploit algorithms the search engines catch up– HOWEVER (big however)– writing for the web is an art in and of itself and you still need a pro to do it. (I’m a big fan of Jakob Nielsen when it comes to web things.) So while SEO may be doomed there’s always going to be copy writers.

Elizabeth
Elizabeth
7 years ago
Reply to  El Nerdo

Ah yes, I’m a fan of Nielson too 🙂

I think writers have to be more than “just writers” these days. Many pros I know have their hands in social media, SEO and content marketing in order to stay competitive. It seems everyone wants to write these days — but not everyone can do it well.

Eileen
Eileen
7 years ago

Nice story. I was sure you were going to apply for whatever position he vacated, but there was a curve!

I deleted my FB account last Feb. I haven’t missed it, but I do realize that there are some benefits that I’m probably missing in a few areas.

CincyCat
CincyCat
7 years ago
Reply to  Eileen

Eileen, I know of some people who use FB for professional networking, but for me, that’s what LinkedIn is for. I only have FB “friends” who are truly family & true close/long-time friends of mine. I do have some ex co-workers as FB friends, but only because I worked with them for years (like 10+), and we know each others’ families, kids, etc, and are truly friends. I don’t have anyone who is affiliated with the non-profit where I am on the board as FB friends (but they are in my LinkedIn network). This is primarily to avoid any question… Read more »

Elizabeth
Elizabeth
7 years ago
Reply to  CincyCat

I second LinkedIn — someone recommended it to me when I finished grad school. It’s nice to keep in touch with coworkers and classmates on a professional level. I’ve had recruiters contact me there too.

Honey Smith
Honey Smith
7 years ago
Reply to  CincyCat

I will always be a fan of LinkedIn, I got $2500 worth of freelance work through a college friend within a month of joining. Nothing like that since, but it’s always in the forefront of my mind when I log in!

Kathleen, Frugal Portland
Kathleen, Frugal Portland
7 years ago

You’re so right — and great work with that freelancing position. Getting paid to learn SEO is amazing! My social networking has led me to more friendships than I ever could have expected — people who dropped off the face of the earth after high school are in my life in real and wonderful ways. The power of the network cannot be understated.

Elizabeth
Elizabeth
7 years ago

Interesting post! I like how Honey approached the opportunity — it never hurts to ask!

El Nerdo
El Nerdo
7 years ago

There are words that don’t belong together in this word because they imply such atrocity and inhumanity they should never be paired.

One such pair is”legitimate rape.” Another one is “full-time adjunct.”

Congrats to your friend for fleeing the “legitimate rape” of academic employment.

For those who don’t know what I’m talking about, please read this:

http://www.mindingthecampus.com/forum/2008/10/the_sorry_plight_of_the_adjunc.html

Honey Smith
Honey Smith
7 years ago
Reply to  El Nerdo

Amen (and also, why I never became an adjunct).

KSR
KSR
7 years ago
Reply to  El Nerdo

I’m belly laughing right now! I’m going through the motions of becoming an adjunct (I have an in due to my husbands current position). Look, it sucks. I can see that clearly now. But, for me–at this stage of life, this is going to work out pretty well. It’s like charity, of a sort==for the aged. It will keep me out of trouble. Though, I do feel guilty supporting or participating in the diabolical.

Congratulations Honey. Sounds like you found a hook that has good earning potential. Excellent job girl!

El Nerdo
El Nerdo
7 years ago
Reply to  KSR

Noooooooooooo!!!! Ha ha ha ha. That’s–ahem–horrible!!! No, look, let me be fair– I have nothing about being an adjunct for fun. Like, teach a course in your professional field, for the glory and because you enjoy the interaction with the handful of good students you’ll come across (they do exist, the curious, engaged, hard-working ones, and they are great to work with–when you’re lucky to get them). But as a way to make a living, in a full-time situation, it’s… overworked and underpaid and unappreciated, and I’m sure you can find better things to do with your time. No?? The… Read more »

Debtgirl
Debtgirl
7 years ago

I am trying to focus more on my day job as well. I also am trying to put as much into during the day and be as productive as possible. I take homework home so that I can work, usually learn, something new!

Perth Book Keepers
Perth Book Keepers
7 years ago

It really pays to be active and knowledgeable with the latest online trend nowadays. Being an expert in seo is really an advantage because you get to earn more doing part time than on an average day jobs.

JMV
JMV
7 years ago

The social network has never worked as well for me as it has worked in the last week. I put a resume in for a new job and mentioned to 4 people that I had applied. Two of the people know people who work there – one works for the person who would get my resume. The other person actually said he would go and pull my resume and get it going. Hoping for the best!

Kelly@Financial-Lessons
7 years ago

I think that personal relationships have become even more significant in the business world these days than they once were. Who you know is not just as important as what you know because once you get your foot in the door, you can then learn and be molded into the employee they desire. Also, because so many things are being done online now, getting a chance to meet in person with someone because of a personal connection with them through another party is much more likely to land you a position than handing out resumes would. Awesome post.

Kumar Gauraw
Kumar Gauraw
7 years ago

Honey,
Social networks have tremendously helped me expand my business not just in US but even several other international markets.

And when it comes to personal networking, I am a huge huge believer of this concept. I truly believe in the statement:

YOUR NETWORK IS YOUR NET WORTH!

I think social networking is a great conversation starter. But serious networkers take that lead and convert that initial conversation into personal connection doing networking with phone calls and meetings one-o-one. I have benefited from this process tremendously.

Thank you for sharing your story. Enjoyed your post very much.

shares