a.k.a writer

a.k.a writer

a written life | Jesaka Long

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Ask a.k.a: you hold your financial reins

September 28, 2011 — 1 Comment

What is the one thing you know now that you wish you knew when you started your freelance copywriting business? – Kim S.

My answer to this question is something I did already know, but it can’t be emphasized enough. You should diversify your income as much as you can. I use a 30% guideline to help me do this. Here are two tales as to why:

  1. I worked for a small company “XAY” (not its real name) for a few years and shortly before I left, one client was providing about 75% of the company’s revenue. When that client moved its business to another firm, XAY scrambled to keep the lights on, but they couldn’t get new clients fast enough. Within a few months, XAY closed for good.
  2. This past fall, I allotted about 115% of my time to one client, thinking that it was okay because it was their new brand launch and it was a finite time. Plus, at the time, it seemed like the only way to keep my sanity. Unfortunately, they didn’t pay me on time. Although it had never happened before, they paid several very large invoices 60 days late, which meant I was broke and stressed out at the holidays. It was my mistake—and one I don’t intend to make again.

I’m not saying that you can’t have regular clients or a retainer with one client. It’s dangerous when you let your business—and your financial health—be tied to one source of income. In fact, I still work with the client who paid me late, though we now have agreements that projects stop when invoices aren’t paid on time.  (more…)

Over at The Urban Muse today, Susan Johnston posted The Ultimate Money Guide for Freelance Writers. You don’t want to miss it!

May 16, 2011

Ask a.k.a: tax & business expense bare bones

May 12, 2011 — 2 Comments

Question: I didn’t expect the financial details to be the most difficult part of my writing business, but they definitely are! How often do you do your state and federal taxes? What tips do you have for keeping your home/business expenses separate? – Leah

When I started freelancing, the financial aspects were the most intimidating, but it’s not impossible to figure out. I promise.

For taxes, I pay my estimated state and federal taxes each quarter without fail. For every invoice payment, I set aside at least 30% to cover my taxes. I also consider those funds absolutely “untouchable” so that I never have to worry about being unable to cover my taxes. Those are my basics. Anything more than that, and I would suggest contacting your accountant—or at least someone much better at math. One resource I like for general info is June Walker – she focuses on “indies” and has a website packed with simple explanations.

In terms of keeping home/businesses expenses separate, I try to be extra strict about that. It makes year-end taxes so much easier. The best way I know to keep expenses separate is by using different accounts. I have a business checking account with its own debit card as well as a business credit card. This helps me keep all of my business receipts and statements in one place.

Again, I will reiterate that I’m not a financial expert. These are simple things that have helped me stay financially organized.

Readers, what about you? What resources do you recommend? I’d love for you to chime in!

(To post a comment, you’ll have to click on the title of the post and then you’ll get a screen with just that post and a comment box. Sorry for the confusion some of you have experienced!)

5 Biggest Freelancing Mistakes – and How to Avoid Them

March 22, 2010 — 3 Comments

Playing with Paint Handprint. Image courtesy of Gabriella Fabbri via stock.xchng®When my days were confined to cubicle walls and an 8-5-plus-evenings culture, it was easy to imagine the glory of life as a freelancer. I longed to be my own boss, pick my own projects and base my work on value, not face time.

Being my own boss has surpassed my expectations—and been much harder than I expected. And, based on conversations I’ve had with other people (from the newbie to the seasoned), I’m not alone. Whether you consider yourself a writer, designer, website developer, business owner or all of the above, there is one thing we all have in common: we are all responsible for our own mistakes.

Here are the five biggest freelancing blunders and tips on how you can avoid them.

1. Failing to follow up.

Especially when you’re first starting out, every prospect, every person who encourages you to contact them is crystal clear to you. But it’s not the same for them. You need to keep in touch with prospective and/or former clients so that you stay top of mind. Use a variety of touches, such as e-mail, phone and snail mail (such as a thank you card or postcard) to stay in front of them, without feeling like a pest. Following up is also essential when you’re trying to get published; you can find more on that here.

This advice also goes for current clients. A client once paid me a deposit and hosted several conference calls for a project. I would submit work, he’d call me and then disappear for months. At first, I was diligent about following up, always making a note on my calendar, even though I never knew if I’d hear back. However, at the end of an overwhelmingly busy streak, I realized it had been more than two months since I’d contacted the client. I sent him several e-mails and left several voicemails for him over the next six weeks. He never returned my messages. A few months later, I checked his website to see if he’d at least moved forward with the new design he’d shown me. He had—and he had moved ahead with copy, too. Just without me.

I’d done more than enough work to earn the deposit funds, but I was so upset at losing the client. Based on how we were working together, I’m confident he wrote the copy himself. He may have made that decision even if I had stuck with regular follow-ups, but I’ll never know for sure because I let contact with him slip.

2. Putting all your financial eggs in one basket.

Sometimes I miss knowing that a paycheck will be automatically deposited into my bank account every two weeks. Now I’m always doing worst-case scenario calculations with my checks, figuring out how long the funds will last me should something happen (e.g., a proposal being rejected, a client not paying on time). A client who offers an on-going project, such as a monthly newsletter, can help bridge that gap. However, you should be careful about how much time you give that gig. For example, if it’s going to take up 50% of your time every month, that could mean it’s also going to make up 50% or more of your income. What happens if that client suddenly goes out of business? How will you make up that lost income?

Here’s where you can learn from the big companies. Many large corporations with their own procurement departments actually include parameters that limit how much business a vendor can do with the corporation. For example, a company I worked for stated that a vendor could make no more than 30% of its gross annual revenue from that company. It’s meant to protect the big company should they terminate the contract. But it can protect us freelancers, too, from relying on too few clients.I try to keep a client at a max of 25% to 30% of income. That way, if I lose a client, I won’t be financially devastated. I’ve seen such a thing take down a business with 10 employees—it can take down entrepreneurs even faster.

Don’t rely on my word alone. Also check out the Urban Muse on why that steady freelance gig could be holding you back.

3. Relying on the handshake.

When you have a great rapport with a new client or you’re especially eager to take on a creative venture, it can be tempting to deal with the paperwork later. Stop immediately!

On several occasions, I’ve received e-mails from frustrated freelancers, asking how I would handle a non-payment situation. The writer has turned in a first draft and can’t get the client to return his call. Or the designer has submitted design concepts and now the client is refusing to pay. There are steps you can take to get paid, but you can also avoid this situation in the first place.

Get everything in writing. Preferably, you are using a contract with every client. If you’re not willing to go that route, at the very least make sure you are documenting a statement of work via e-mail with the client. A contract protects you and can help you spell out deliverables and payment schedules (such as deposits, monthly or milestone payments). I always ask for a deposit before I start working. It can be hard to wait, but you must. Otherwise, you risk doing work and not getting paid. Nolo has great contract templates that you can purchase for a small, very worthwhile, fee. In addition, Peter Bowerman, author of The Well-Fed Writer, offers examples of letters used to document work and deposits required.
4. Undervaluing your services.

Pricing is one of the hardest pieces of business to master. Price yourself too high and your prospective clients may move on to the next designer. Price yourself too low and your client will think you don’t have experience. By overpriced, I mean charging $180 an hour for something most people charge $75 to $100. You can make a simple adjustment there. It’s pretty easy to tell if you’re overpriced. Connect with fellow freelancers (as well as online forums) to get an idea for the rates they charge. Or, if you don’t want to ask specifics, ask about market rates. Of course, if you truly believe your services are worth more than most freelancers, stick with it. Just be sure you can clearly articulate the extra value you’ll provide with the higher fee.The harder issue to address is undervaluing your services. While this can be a simple issue of simply bumping up your prices, it can also be a sign of something much bigger: you are worried about the amount of experience you have (or lack), you haven’t taken time to educate yourself about market rates or, worst of all, it can be a sign that you don’t believe in yourself.

The solution: spend time figuring out what makes you special. Is it your customer service? Your edgy ideas that get client results? Is it your eye for interpreting design trends into a gorgeous website? Know how you bring extra value to your client—and don’t be shy about telling them.

In addition to fellow freelancers, there are great resources available to help you determine rates for your services. For straightforward advice, I highly recommend Michelle Goodman’s book My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire. Another helpful book is What to Charge: Pricing Strategies for Freelancers and Consultants by Laurie Lewis. You can also find your rate with these resources.

On the flip side, if the client belittles you and uses inappropriate, unprofessional language, you do not have to accept that. In such a case, suggest that you reconvene the conversation when you’ve both had time to step away and re-evaluate the situation. Or, if it’s e-mail, be sure to respond with a professional, calm tone. If the client refuses to calm down or uses abusive language, you have the right to walk away. Did you ask for a deposit upfront? Here’s a good reason for why you may wish you had.

5. Not managing your mistakes.

Despite your best efforts, it’s possible you’ll make a mistake while working on a project. While we’d all prefer this never happen, it’s better that you’re equipped to deal with the mistake than believe this won’t happen to you. Errors can range from hitting the wrong tone with copy to accidentally excluding a design element the client wanted. The key is how you approach making it right. Like many people with experience in the retail industry, I approach an upset customer with the attitude that the customer is giving me a chance to make it right and strengthen the relationship.

The first step: apologize. Even if you disagree with a client, offering an apology is a way to show that you are listening to them and that you care about correcting the mistake. As I’ve written before, you’ll be surprised at how an apology can open the door to a constructive conversation with a client, helping you gather the right feedback for an on-target re-do.
The worst thing you can do is assume the client is going to walk away. If you act as though you’ve already lost the client and avoid his or her calls, you could lose the project, the client and future clients. Own up to your mistake and explore what can be done to make things right.

Your turn. Are there mistakes you think are bigger than these? If so, what are they? If we were going to create a list of the biggest mistakes #6-10, what would be on your list? Please share your expertise, opinions and experiences in the comment below.

Image courtesy of Gabriella Fabbri via stock.xchng®

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50/50 Post: The Best Freelance Advice You Ever Received

March 15, 2010 — 21 Comments

Women Sharing Advice. What's Your Advice About Freelancing?Whether you’re a seasoned freelancer, part-time freelancer or freelancer-to-be, I’m asking you to share here. You can be a writer, designer, photographer, consultant, or artiste. All that matters is that you participate!

Long before I took a last gasp and made the life altering, “I’m going out on my own” announcement, I’d been reading everything I could about life without cubicle walls. Ideally, I wanted to have a few clients on a part-time basis first, but that’s not how life worked out. With my move to Denver, I had to leap or get a new full-time job and hold off on the dreams of being my own boss at least another year.

With all the ups and downs, especially that cold first month, I’m so glad I did it. In fact, I’m so thrilled to be on my own, I’ve been helping other freelancers (or almost-freelancers) navigate their way. It’s inspired me to ponder about my own journey and the best advice I received. It was this:

Tell everyone you know about your freelancing business. Since I was leaving a job, this part was easy. In simply sharing my news, I received amazing support and (most valuable of all) referrals. I was floored at the number of people who provided email addresses and said, “Tell ’em I sent you.” It opened doors and boosted my confidence.

Now it’s your turn! Like my other 50/50 posts, this is where you share your experience. What’s the best freelancing advice you’ve ever received? Was it from a fellow freelancer? Or did a mentor share her wisdom? Or maybe it was a favorite book that’s since become your favorite go-to resource? And, if you didn’t receive advice for taking the leap, what’s the one thing you’d share with a budding freelancer today?  Please share in the comments.

Photo attribution: http://www.flickr.com/photos/g-hat/ / CC BY 2.0

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