THE FREELANCER’S
SURVIVAL GUIDE
Second Edition
Kristine Kathryn Rusch
Copyright Information
The Freelancer’s Survival Guide
Second Edition
Copyright © 2012 by Kristine Kathryn Rusch
Published by WMG Publishing
Cover and layout design copyright © 2012 by WMG Publishing
Smashwords Edition
Most of this material appeared in different form on the blog “The Freelancer’s Survival Guide,” at kristinekathrynrusch.com from April 2009 to August 2010.
Table of Contents
Section One: Getting Started
6. Things You Need Before You Quit Your Day Job
Section Two: Time Management
7. Time
8. Schedules and How To Keep Them
9. Deadlines
10. Discipline
11. Illness
12. Burnout
13. Vacations
Section Three: Money Management
14. Money
16. Definitions
17. Net Income
18. Income Streams
20. Employees
21. Advertising
23. Incorporation
Section Four: How to Negotiate Anything
25. Negotiating for the Short Term
27. How to Negotiate Your Own Contract
28. When to Hire Someone Else to Negotiate Your Contract
Section Five: Networking in Person and Online
31. Lies, Scam Artists, and Bullshit Meters
33. Groups
36. Surviving Someone Else’s Jealousy
Section Six: Risks, Setbacks, and Emergencies
38. Risks
39. Insurance
40. Emergencies
41. Setbacks
42. Flexibility
43. Failure
44. When to Return to Your Day Job
Section Seven: Success
46. Success
Section Eight: Goals and Dreams
47. The Difference between Goals and Dreams
48. Patience
49. Expectations
51. Staying Positive
Section Nine: The Benefits of Freelancing
53. The Benefits of Freelancing
Introduction
When I initially came up with the idea for The Freelancer’s Survival Guide more than ten years ago now, I never imagined what it would become. I thought I would write a short book about the various things a freelancer needs to know to survive in the modern business world. I still have my initial outline and looking at it, I have a hunch that had I written it, the book would have been one-third the length of this one.
It isn’t that I have learned so much more in the past ten years; it’s just that I hadn’t realized how much people wanted to know.
I started my writing career in non-fiction. I saw non-fiction as a way to make money to support my fiction-writing career. At least, that’s what I tell people. If you actually look at my writing history, you’ll see that I have always written fiction and non-fiction simultaneously—beginning with the newspaper I “published” for my neighborhood at the age of ten and sold for a nickel per copy.
I worked as a journalist, mostly in radio, and published articles on business from college onward. My non-fiction style has always been colloquial—while I like imparting information, I prefer to do so in a personal way. I have published a lot of fiction books, from collections to novels, but The Freelancer’s Survival Guide is my first non-fiction book.
Honestly, it would not exist if it weren’t for my blog. Although I thought of writing this book for years, I always had other projects that took my time and interest. Articles are relatively easy to write, and they take little time. A non-fiction book, on the other hand, takes as much time as a novel. I started the book twice, believing I could just putter at it, and never finished it. I knew I did not want to make the concentrated effort—losing months, maybe a year, of my writing time—to write the Guide.
Particularly when I knew what would happen to it. If I sold it—a big if, non-fiction editors told me, because the book wasn’t geared toward one kind of freelancer (writers, for example) but because I geared it to all different kinds of people who want to work for themselves—the book would go to the back of the bookstore, and disappear along the shelves. It would have a month-long active publication life, and from then on, it would have to accompany me to conferences and book fairs if I wanted to keep the Guide in print.
I did want to keep it in print, but not because I wanted to earn a fortune at it and because I wanted it to be a bestseller. Writing a book like this is not the best way to become a household name.
I honestly had no interest in writing the Guide for me. I wanted to write it for all the freelancers I’ve met, all the people who are struggling through start-ups, all the people who are struggling to survive. I also wanted it for the people whose businesses were succeeding, but who had no idea what to do with that success. I wanted a book I could hand out to my students, yes, but also a book that someone else could find, someone in a small town who didn’t go to conventions or book fairs or conferences, someone who needed a friend who had gone through the hardships of running her own business and could give some advice.
When the Great Recession started, I realized I had missed my publishing window. I should have finished the Guide in 2005 or 2006, so that I could have found a publisher who would have had the book on the stands by late 2008, when people—having lost their jobs—decided they might as well work for themselves. I even saw the book as being useful to people who weren’t planning on starting their own businesses, people who just needed help organizing their time and their finances while they searched for a new job. Looking for a job in a down economy is, in essence, working for yourself.
I moped for a few months, thinking I had missed an opportunity, and then I realized that changes in technology had given me another option. I could write the book a chapter per week, and upload that chapter on my website. If the experiment didn’t work—if no one came to read the blog—then I would have some chapters and my outline, and I could approach publishers.
Frankly, that’s what I expected would happen.
Instead, I went through a personal revolution. I got readers and donations to keep me writing from my very first post. The readership grew. Over the seventy weeks it took me to finish the Guide, I received enough donations to equal a nice non-fiction advance from a New York publisher. I did not expect that at all. I also got a larger readership than I would have if the Guide had been published as I mentioned above. In fact, the readership is still growing. I got e-mail just this morning from a woman who discovered the Guide a week ago, and is slowly reading her way through the blog posts.
After I finished three chapters, I did send a proposal to my agent, so that he could market the book to major publishers. He wasn’t enthusiastic about the project (for the reasons I mentioned above), although he did have a few ideas about marketing it. By the time he got those ideas to me, I was growing more and more reluctant to publish the book conventionally. It was the middle of the summer—not a good time to mail out a book—and we agreed to put it on hold.
I never went back. By the fall, I realized I wanted to publish this book myself. I wanted small distribution and more importantly to me, I wanted to be able to keep the book in print. I decided to do an electronic edition that I would give to anyone who had donated to keep me working, as well as a print edition.
It wasn’t that farfetched for me to publish the book. As you’ll discover when you read this, I used to co-own a publishing company with my husband Dean Wesley Smith. I know what it takes to publish a book, and how hard you have to work to market it. I also knew that I would need to do some organization work and trimming to make the Guide work in book form. My only concern was editing. Although I had won awards for my editing, editing yourself is a dicey proposition. Eventually I decided to hire an editor to make sure the manuscript was in order.
Fast-forward another year. I finished the blog version Guide a few weeks ago. I have just finished organizing all of the posts. Some combined into a single post; a few got cannibalized into other posts. I had to make some decisions as I did this, decisions that will affect what you read.
I decided to keep the conversational tone. The chapters were originally blog posts. Many times, the posts would not have existed without reader feedback. Indeed, the Guide is as large as it is because of reader comments, emails, and suggestions. So rather than try to artificially adopt that “expert” tone, I decided to leave the chapters as close to the blog posts as they can be. Sometimes, I’ve included a date—especially when an event or a news story inspired my post. Sometimes I haven’t.
I did divide this Guide into sections, which makes it very different from the blog. The sections cover large topics, such as Money Management. I did this so that you can skip around as you need to.
As I set up those sections, I realized that they could also stand alone as short books. I have carved the Guide into nine short books, covering everything from Goals and Dreams to How to Negotiate Anything. All of the material in the short books is in the Guide, but not all of the material in the Guide is in the short books. However, if you have a friend who needs advice on only one subject—say, Time Management—then you can buy him that short book without giving him this entire tome.
Like the Guide, the short books are available in print and electronically. This is another benefit of doing the Guide myself. I know that many people buy how-to books for only one section. I have how-to books that I’ve dog-eared in the middle, but haven’t touched the beginning. By doing the Guide myself, I unwittingly gave myself the ability to be flexible.
I am continuing a business blog on my website, called The Business Rusch, and as I learn more about the topics contained herein, I will update the sections. I’ll probably update this book once a year or so. Just check on my blog, click the Freelancer’s Survival Guide tab, and see if I’ve added updates at the bottom of the table of contents. You can find all of the original blog posts and the excellent comments from readers at kristinekathrynrusch.com.
I owe a great debt of gratitude to the online readers of The Freelancer’s Survival Guide. Without you people, I never would have finished this book. It would have existed as an outline and half-finished chapter in my computer for decades. I also owe a lot to Michael J. Totten, who discussed the practicalities of running a blog on a website (you can find his spectacular blog on foreign affairs at michaeltotten.com). Michael is the one who suggested the donate button, and I did it, although I was skeptical. That—and the willingness of readers to support my endeavor—changed everything.
So did novelist Scott William Carter. He was at the initial meeting on e-publishing with Michael, Dean, and me. Scott’s the one who helped me design the website, held my hand when I had a crisis (too often to imagine), and had some truly spectacular ideas of his own.
If you have comments or questions about the Freelancer’s Survival Guide, feel free to contact me through my website. As I mentioned, this is an ongoing project—and there will probably be supplements down the road.
I have had a surprising amount of fun putting this book together. What I initially saw as unrewarding work has turned into a life-changing event.
Which—if you think about it—is the essence of freelancing. It’s fun and it’s life-changing. It’s also a lot of work, although if you do it right, that work is not at all unrewarding. It is, in my opinion, the best kind of work possible—doing what you love, on your schedule, and on your own terms.
—Kristine Kathryn Rusch
Lincoln City, Oregon
September 3, 2010
Section One:
Getting Started
Chapter One
Job Description
My title for this chapter of the Guide, Job Description, should be impossible to write about, given the task I assigned myself. I wanted to discuss various freelancing jobs, not just freelance writing. The jobs should be so different that I shouldn’t be able to describe them in a single article.
But they’re not.
Because at its core, all freelancing is the same.
When someone else hires you to work at their business, you do a specific job for them. The radio station I worked for years ago hired me to put out one half-hour newscast per weeknight, manage hourly news updates throughout the three-hour morning show, and make certain that someone anchored the noon to one talk show. I also had to do wall-to-wall political coverage on Election Day, and handle any emergency situation that came up. My duties included maintaining the newsroom, handling the volunteer staff, and training new reporters.
I also had to attend radio station staff meetings, have a monthly meeting with the program director, and justify my budget with the station’s financial manager. I had a lot of skills—from anchoring to reporting to engineering—and I used them all, sometimes within the same day. I also did a lot of writing.
I had an assigned area (the news room), an assigned budget, and assigned timeslots for my various newscasts. I took my job very seriously. If I failed, we had half an hour of nothing (dead air in radio terminology) from 7:00 to 7:30 at night. I can’t tell you how many times I scrambled to fill that half hour because someone failed to show up for work. More than once, I wrote and engineered the entire newscast myself. A few times, I wrote, anchored, and engineered it.
I worked hard. However, when the newscast ended at 7:30, I had half an hour of clean-up and prep for the morning show, then I could go home. The radio station continued broadcasting. Other people monitored the evening schedule. Someone else paid for the lights and the heat and the extreme cost of the transmitter. If the station got knocked off the air by lightning, someone else dealt with that emergency. I had no responsibilities from eight in the evening until five in the morning. If no one showed up by then for the morning shift, the daytime DJ called me, and I had to come in for the updates. But if I didn’t get the call, I got to sleep in.
The structure of that job was so absolute, I can remember it twenty years later. I still dream about it—showing up at 5:00 a.m. to find the DJ gone, the transmitter off, and the station broadcasting dead air. In my dreams, I scramble to put together a newscast while sitting in the booth as the disk jockey, playing the music, and rebooting the station itself. (People who’ve worked in radio know that one person can’t do all those things by herself—which is why these dreams are nightmares.)
Whenever you’re an employee, someone else provides the structure. They give you an assigned area, people to work with, tasks to finish, and, in many cases, a budget. You work within those structures, and for your time, you receive a paycheck. If you’re lucky, you also receive some benefits—health insurance and paid time off.
When you become a full-time freelancer, you lose all of this structure.
This is one of the areas where first-time freelancers struggle. When they quit their day jobs (or in the case of this economy, got forced out and decided to go it alone), they imagined spending all day every day doing exactly what they love.
Unfortunately, that’s not how it works.
As Bob Cooper, who works as a freelance copyeditor and proofreader, wrote to me when I started this series, “Whatever someone chooses to do as a freelancer, a major component of that will be not doing the actual work that they enjoy, but rather the just-as-important work of keeping their business viable—which involves primarily self-marketing to keep the flow of new work coming in, but also the mundanities of timekeeping, bookkeeping, tax planning, etc. And if they’re not good at any or all of those things, what to do? Spend money to hire someone to do it for you? Spend time (and maybe money) learning how to do it properly yourself? Ignore it all and hope it goes away?”
Other chapters of the Guide deal with a lot of the individual items he mentions from bookkeeping to marketing to hiring employees, but for the purposes of this chapter, his overall point is marvelous. A major component of the job will be things the freelancer never considered before she went full-time freelance.
Or as Lyn Worthen, who runs a technical communications consulting firm, Information Designs, says, “Too many aspiring freelancers forget that they have to wear ALL the hats in their business (at least until they get to the point where they can hire additional hat-wearers).”
And once you’re at the point of hiring an additional hat-wearer, you may not want that person. Remember what you were like as an employee? Some days were good, some were bad; but the consequences of a mediocre performance were simple: if the boss didn’t like it, you got fired.
Remember this whenever you think of hiring anyone. No one cares about your business as much as you do. No one will work as hard as you will. And no one will be as vigilant as you are about mistakes. So caution, caution, caution about hiring anyone to take the burden off of you—particularly the burden of managing your money.
What is your job description as a full-time freelancer? Jack of All Trades. The Boss and the Minion. You have become Da Man. And to throw in one more cliché, the buck really and truly does stop with you. The day job had an invisible structure as well. If you worked in a corporation or an organization with more than two employees, you probably saw only a handful of the things it took to run that business. You had no idea how, for example, to pay employees (payroll taxes are a nightmare), how much it cost just to keep the doors open every day, and what kind of volume had to be done every month to keep the business viable.
At the radio station, I got to know my newsroom, my reporters, my news sources, and the schedule. I only worried about the budget when our long-distance phone bill got too big, usually during some big national news cycle. I had no idea what it took to maintain the station’s equipment or to monitor the seasonal ratings. I didn’t have to worry about the pledge drives (we were listener-sponsored) or the occasional problems with the FCC.
As a full-time freelancer, I have become an expert at tax law as it pertains to my business. I loathe accounting and bookkeeping because I’m dyslexic and numbers truly vex me. But Quicken has made that part of my life easier. I keep my own books, handle my own finances, and act as my own financial advisor. Do I consult others? Daily. But the final decisions are always mine.
I remain current with the news, not just the industry news, but economic trends, national stories, and—because my work sells all over the world—international events. I constantly monitor the web. I try to scan at least three newspapers per day, listen to several news sources, and look through as many industry websites as possible.
I also monitor what everyone else in my industry does. Some folks would say I’m keeping up with the competition, but I know that writers don’t compete with each other. However, I can learn from what books other writers are publishing, what deals they make, and the mistakes they make. I’m a fervent believer in learning from other people’s mistakes. I already make too many of my own—I made a few doozies at the turn of the century that cost me dearly—and I simply don’t want to reinvent every single wheel. It’s too painful, time-consuming, and difficult.
In the mistakes area, I take a leaf from Elvis Presley’s tough business manager, Colonel Tom Parker. Parker knew he would make mistakes, but he got angry when he made the same mistake twice. Parker had a lot of bad attitudes about business, but this is a good one: it acknowledges that you will make mistakes—a lot of them—but you should always make new mistakes, not keep repeating the old ones.
I market my own products, a task that sometimes takes hours per day. I do the design, packaging, and mailing. I try to keep up on new technology that makes these tasks easier, although I’m not quite as vigilant on that as I should be.
I maintain my own equipment—and I’m realistic about what I need. I need two computers—one for my internet work and one for my writing. The internet computer has to be able to process a lot of material rapidly. The writing computer can be little more than a glorified typewriter. I need a printer, a cell phone, and an internet connection. I need to see a lot of movies, read a lot of books, and watch a lot of television. I try to keep up with the recording, gaming, and comics industries as best I can. Why do I do this? Because I work in the entertainment industry, and I need to keep up on what’s going on within it.
I know what my actual product is. That may sound silly, but many first-time business owners often don’t realize what their business actually is. Writers, for example, are particularly bad about this. Many writers don’t know what they sell (and sales are the heart of this business). Writers don’t sell stories. They don’t sell manuscripts. They sell (or more accurately license) portions of their copyright. Most people in the entertainment industry work that way. So I monitor legal sites, reading articles on copyright, and am constantly reading about court cases and lawsuits involving copyright.
People who sell things like jewelry gain other areas of expertise. They learn about gems (how to tell real from fake) or the differences between gold and gold leaf. At our casual lunch one Sunday, two jewelry makers discussed various beads (while I snoozed) because one type was cheaper and worked better than another.
You have to become an expert in your field. Not just in the production of the material, but in all aspects of the business.
I probably spend twelve hours of my day (conservatively) doing the things I need to do to run my business. Of those twelve hours, I actually spend four to six—one-third to one-half—doing what I love. What I love to do is put new words on the page. (Or, as my husband says, make things up.) The rest of the time is about money management, marketing, research, and continuing education.
If your idea of full-time freelancing means spending all your time doing exactly what you love, with a lot of time off and someone else to handle “the business” (whoever that someone else might be—from an accountant to a lawyer to an agent), then you should probably keep your day job.
Successful freelancers by necessity must understand how to run a business. They have to know how to manage money, time, and themselves. All of this can be learned, and most of us learned it while we freelanced—through a lot of trial and error.
However, if the very idea of handling everything from paying the light bill to shilling your own product gives you the willies, then don’t become a full time freelancer. Do what you love part time and keep your day job. You’ll be happier—much happier.
So how do I describe my job? I am my own boss—with all the ups and downs that entails. I am responsible for the good and the bad in my business, for the successes and the failures.
And, honestly, I wouldn’t have it any other way.
Chapter Two
A Freelancer’s Priorities
From the moment we’re born, someone else imposes structure on our lives. First our parents set the agenda. Then our schools chime in. Finally, our employers tell us what to do and when to do it.
Most people set their own hours only on weekends or during vacation. One of the hardest things for a retiree to get used to is the abundance of free time. We receive training from the very first breath we draw in how to respond to other people’s needs and demands. We don’t know how to respond to our own.
Most people who start working for themselves get nothing done in the first six months. These are productive folk who used to work full time, deal with their families, and conduct their businesses on the side. Suddenly, faced with 24 hours with no schedule at all, their productivity vanishes. Many find their waking hours sucked up by television or video games, Facebook or family visits, or in my case the first time I tried to freelance, reading two to three novels per day.
First let me state that a decline in productivity is normal for anyone who quits her job to become a full-time freelancer. Without the structure, the freelancer doesn’t know how to organize her time. It’s a subtle thing, but a very real one.
And it’s frightening.
In 1985, after quitting one of my many part-time jobs, I moved into a new one-bedroom apartment. I was going through a divorce, my best friend had moved out of the city, and I lived in a new neighborhood. My very first weekend in that apartment, I received no phone calls and talked to no one in the neighborhood.
I wondered if I existed at all.
I have had that feeling many times throughout the years. It means that I let myself get too isolated. Not only is work an economic necessity, it’s also a social gathering point, one that doesn’t seem valuable until it’s gone.
The loneliness and the lack of structure often cause panic. Those two things, more than financial worries or lack of success, cause the freelancer to hurry back to the nine-to-five world.
Structure comes from establishing priorities. Once you know what’s truly important, then you make sure that thing gets done first.
Here are the priorities that I believe all freelancers should have in their lives. I’ve put these priorities in order from most important to least important. Your list might look different. First, I’ll give you the list. Then I’ll explain each item and why I placed it where I did.
A Freelancer’s Priorities
1. Family
2. Health
3. Work
4. Leisure
Seems simple enough, right? If I said the list aloud, most of you would nod, thinking that you understood. But there are elements in each category that I can guarantee most first-time freelancers have never considered.
Let’s take them in order.
Family
By this, I don’t necessarily mean your biological family. I mean the people that you live with and the people that you love. Family should always come first.
Think of it this way: When you have a day job, family and work compete. But your work has given you structure. You know you’ll be home at, say, 5:00 p.m. From 5:00 p.m. until you go to bed, you have an opportunity to be with your family, an opportunity that most people use.
You schedule doctors’ appointments during lunch, parent-teacher conferences after work, and occasionally ask for time off to attend your daughter’s soccer game. But these are scheduled events, just like your children’s bedtimes. You know where you need to be, when you need to be there, and how you have to work around your nine-to-five job.
Most successful full-time freelancers schedule family time around their work, just as they would if they have a nine-to-five job. Sometimes it takes training. Some good friends of mine consistently ask me out to dinner, which falls right in the middle of my workday. I’m a harsh boss and I only give myself an hour for dinner, including prep and clean-up time. Going out takes an hour and a half or two hours, which gets in the way of my work schedule. I have to repeatedly explain to these friends that I cannot come to dinner because I work during that time. I know they don’t understand, but they’re slowly learning. Now they only ask me out to dinner on very special occasions—the kind of occasion that would cause me to ask my real-world boss (if I had one) for the extra time off.
As you’re learning to plan your schedule, figure out how much family time you normally have, how much more you need/want, and how to fit it in. Then divide the hours in your weekly schedule, placing the family time on the calendar first.
Health
Everyone plans to take care of their health but very few people do. It’s extremely important for freelancers to monitor their health because if they get sick, they don’t get paid. I’ve seen more than one career cut short by freelancers who put off basic health care because they didn’t have the time or the money or the proper insurance to solve a minor problem that eventually became major.
First, limit snacking. First-time freelancers always gain weight because the refrigerator is only a few steps away. Do what it takes—whether that is scheduling your eating times or failing to buy your favorite snacks.
Drink a lot of water. Not fruit juice, not Red Bull, not alcohol. Water. There are two reasons for that. First, water cleanses the system, keeping toxins out and helping to fight fatigue. Second, water flows through you pretty quickly. Most freelancers are doing work they love, and don’t move around much, which puts them at risk for repetitive injuries. A glass of water per hour equals one bathroom break per hour, which means getting up once per hour and walking around. Sometimes staying healthy is just that easy.
Get enough sleep. Most people need six to eight hours per night. A lot of creative people take a twenty-minute refresher nap in the afternoon. Sleep allows you to think clearly and perform at your best. It also staves off illness. However, don’t sleep too much. Some first-time freelancers sleep ten to twelve hours per day. That’s as unhealthy as sleeping too little. Get the recommended amount of rest, no more and no less.
Begin an exercise routine and/or maintain your exercise routine. Exercise improves mood—which is important, considering how much time freelancers spend alone (people who spend time alone are prone to depression). Exercise also improves blood flow, oxygen intake and nearly everything else. If you pay attention to studies of almost every disease and chronic condition, you’ll learn that people who exercise do better than who don’t exercise.
I’m a loner. I don’t like exercising around other people. So I go for a run, a solitary bike ride, or a half hour on the elliptical machine six days per week. I prefer the run or the bike ride, simply because it gets me outside in the fresh air.
If you’re not a loner, schedule a daily walk with a friend or join the local cycling club. Keep your gym membership and use it at least five times per week. Yes, exercise takes time from both family and work, but it is not a leisure activity. It’s a necessity—especially now that you’re not walking around the office, taking the stairs from the parking lot, or running errands all over town. Exercise improves health, reduces stress, and boosts creativity. Need I say more?
Get routine check-ups, even if you have to pay for them yourself. Do not let a high deductible get in the way of maintaining your health. That includes eye exams and dental exams. No fun, I know, but essential to a long-term freelancing career. If you catch a problem early, you have a better chance of recovery. You’ll also lose less work time to illness. Get a flu shot, take your vitamins, and do all the other things that go into prevention. Freelancers don’t get paid sick days, so it’s better not to get sick.
Finally, socialize at least once per day. It sounds silly to say this, particularly in the health category, but freelancers are prone to loneliness, which is an extremely destructive emotion. My husband Dean (who also freelances) and I go out to lunch every day, often at the same restaurant. We see people, talk to friends, and touch base with the community. One of my freelancing friends swims with the masters (adult) swim team four times per week. Another friend takes an hour per day to run errands that he could easily get his wife to do. It gets him out of the house and seeing people, which is all we freelancers need.
Work
This is the actual thing you quit your day job to do. Give it at least as many hours per week as you gave that day job, preferably more. The harder you work, the more success you will have.
Schedule the same time for work every day and post that schedule on your fridge or on your family’s bulletin board. Tell your friends not to interrupt you during that time, unless it’s an emergency—just like you would expect them to do if you worked for someone else.
Know this, however. If you do not stick to your schedule, your friends and family won’t either. If you think missing one day won’t hurt, then the next week you’ll miss two. Eventually, you’ll go back to getting nothing done, and you’ll become frustrated and angry with yourself.
It’ll take time to set up this schedule. You’ll have to find the best hours for your business and the best hours for you. I’m a night person, but I do most of my business with people who live in New York City. I live in Oregon. I make sure I’m available at noon my time (3:00 p.m. New York time) just in case I need to return a phone call or answer important e-mails. That’s a compromise between my schedule (I’d prefer to start work mid-to-late afternoon and work until 11:00 or 12:00 at night) and a schedule imposed by the type of business I’m in.
Remember this rule about freelancing: The more time you put into your job, the more you will gain from it. Not just financially, although that’s true too. But you’ll also gain opportunities. So make sure you schedule at least 40 hours of work per week, preferably much, much more.
Leisure
Human beings need to rest. The hardest thing for me to learn as I took up sports in my late thirties was that I needed a day off. I wore myself out exercising and even fractured a bone in my foot because I didn’t give myself enough relaxation time.
As you can probably tell from the above paragraph, I have trouble taking time off. I like being busy, and I like my work. But a person needs to recharge. Time off does that.
The time off can come in one hour per day or the standard two days per week. The key is this: You must schedule your leisure time weekly. Rest isn’t something you do for two weeks out of every year. It has to happen on a regular basis to have any value at all.
But don’t overdo your leisure either. I learned the hard way that I had to schedule my leisure time after my workday was over. I like to read. Early in my freelance career, I’d pick up a book at lunch, promising myself one more chapter, just one more chapter, until I finished the book. By then it was dinner and “too late” to start work, so I read another book. I lost entire weeks before I realized I couldn’t read until the work was done. Then reading one more chapter became a reward instead of work avoidance.
You’ll learn all of these things—what keeps you from work, what causes you to overwork, and all the other problems in between—over time. You learn what works for you and what doesn’t, how to arrange your day, and what makes you the most productive.
But to start, make your list of priorities. Figure out how you juggled those priorities when you had a day job, then translate that juggling to your new freelance career. Add in the health care and the exercise (I know—you thought that could wait, right?), and keep track of your daily schedule to monitor how you’re doing.
You won’t get it right the first week or even the second. It’ll take time to refine your schedule to fit your life and your priorities. Gradually, however, you’ll find what works best for you and what makes you both the happiest and the most productive.
Chapter Three
Building Your Workspace
When I started the Guide on my website, I promised myself that I would answer readers’ questions.
The first question I got came from Dave Goodwin: “I’m about to move into a new home, my first place with enough space for a dedicated office. Since creating the proper setting is the first step of any project, would you mind starting with your advice on setting up a proper workspace? I could be the first real-world test for your theories.”
This is a tougher question than it initially seems to be. I want this Guide to work for all types of freelancers from plumbers to writers. Since I’ve owned or been a part of four retail businesses, and started two other businesses (not counting my own professional writing), I can help with more traditional businesses as well.
Workspace Outside of the Home
Recently, I met a contractor who now buys and sells distressed properties. He sat at a booth in our local Thai restaurant, phone in one hand, printouts of retail listings spread across the table, and a legal pad at his side. His laptop, closed, rested on the booth beside him.
He had stopped for lunch in the middle of a very busy day. He made calls, talked to potential clients, and scanned properties while waiting for his Pad Thai. After the food arrived, the restaurant’s owner asked about the value of some property he had seen.
This question led to more questions, which led to a discussion involving me and my husband Dean. We learned a lot about the contractor’s new business. He spent his days examining properties on a 100-mile stretch of the Oregon Coast.
He had three workspaces: his car, his home office, and wherever he found himself. Fortunately, in the 21st century, we can take the important parts of our office with us. The contractor illustrates my hesitation in tackling this topic. Workspace is what you need, when and where you need it. Workspace varies from profession to profession.
Pam, a housecleaner who recently retired, came to her clients. She carried her equipment in her truck and billed the clients who required a formal written statement from her dining room table.
Thomas, a gardener, also comes to his clients. He has two trucks, an equipment shed, and a room in his house for the bookwork. Last month, he informed me that he had just learned how to operate a computer. Now his statements, which had been typewritten and minimal (Thomas does not like being indoors), have a modern structure, with a place for the current amount, past due amounts, and balance forwards. His estimate form can be customized. The new computer also enabled him to get rid of his fax machine because he has finally learned the joys of e-mail.
Sue, who owns a collectibles store, works at the shop from 10:00 a.m. to 6:00 p.m. While the entire store is her workspace, she now has a dedicated area for eBay. On one desk, she has a computer and printer. Behind that, she has a flat table so that she can ship items without bending over too much or reaching up too high.
Unlike most workspaces of the self-employed, Sue’s workspace provides no real privacy. She doesn’t dare hide from the walk-in customers who might buy something from her shop. Her computer setup also houses a security monitor system so that she can watch customers even if she is momentarily unable to leave her desk.
These outside-the-home workspaces have some similarities and many differences. The main similarity is that they suit the owner’s business. Pam, who rarely billed her clients since she got paid as she finished the day’s work, didn’t have a computer or a home office. She didn’t need one.
Thomas needs the home office to keep track of all of his (hated) paperwork. Eventually, he hopes to hire an assistant to help him with that part of his job, so he has designed the workspace with the future assistant in mind.
Sue doesn’t work at home. Her business has retail customers who walk through the brick-and-mortar store, and retail customers who buy from her on-line. She has to accommodate both—and keep an eye on the inventory during business hours.
Those of you currently looking for work have businesses that most closely resemble the contractor’s. Your workspace exists in three locations: your home, your car, and wherever you stop. You need a cell phone and some way to remain organized on the road.
Very generally, then, what an office outside the home needs is:
1. A phone.
You must stay in contact somehow. Most of the self-employed who work outside the home have cell phones. Many of these phones are sophisticated high-end models that dispense with the need for a laptop. I know that Thomas synchs his phone with his new computer because he told me how much paperwork it saves him every single day.
2. As much privacy as possible.
Midway through a phone conversation that day, the contractor (who was one of those guys who spoke too loudly when he was on the phone) said to the person he was talking to, “I’m in a restaurant. I can’t discuss this right now. I’ll call you back when I get to my car.”
Sue’s eBay computer is in a cubby at the very back of the store. She can see anyone who enters the front door, but they can’t see her or her computer, unless they go all the way back and step inside that cubby.
3. The tools of your trade.
Be they vacuum cleaners and dust mops, lawn mowers and clipping sheers, or a high-speed computer with the fastest internet connection possible, make sure you have the right tools at your fingertips. I’ve seen small business owners lose customers because the owner wasn’t prepared to handle a problem or a new sale right at that very moment. Figure out what you need and be prepared.
4. An ergonomically correct workspace (wherever possible).
Those of you working out of your car can’t do this, but the rest of you probably can. Thomas uses earplugs and braces to keep himself in shape. Sue has a shipping area suited to her height, with everything in reach so that she doesn’t have to bend too much or lift too much. Treat your body well and you’ll work more efficiently (and you won’t get the kinds of injuries that often force the self-employed to retire).
As for the rest, I can’t help much for those of you working outside the home. Your businesses have such different and individual requirements that I’ll probably miss most of what you need.
Office in the Home
Most freelancers work out of their homes—or should. In the words of Randy Tatano, who has freelanced for NBC for four years, “The freelancers I’ve known who have had problems are the ones who set up fancy offices and buy all kinds of equipment. I’m sure you’ll have a chapter on minimizing overhead.”
An office in the home saves money. For those of you who are afraid to take the office-in-the-home deduction on your tax return because you’ve heard that it’s a red flag for an audit, stop worrying.
If you follow these rules, you’ll make it through any audit just fine. (Please do remember, however, that I am not an accountant or a tax attorney, so any tax advice I give here is based only on personal experience, which includes surviving two full audits and several small ones.)
1. Your home office must be a workspace only.
Don’t store your Christmas decorations in the back corner, don’t put the exercise equipment in the center of the room, and don’t set up next to the washer and dryer. Your office must be a professional workspace, the kind you would have if you worked in a corporation. If you wouldn’t put the kids’ toy box in your office at your former day job, then you shouldn’t put the toy box in your office at home, either.
2. If you must use part of the utility room (or the dining room) as your workspace, block your workspace office.
When I moved to Oregon, I had a small one-bedroom apartment. I used part of the dining room as my office and walled it off from the living room with bookshelves. The office space, while tiny, housed a desk, my computer and printer, my chair, two filing cabinets and my bookshelves. I couldn’t see the living room from my office, and no one in the living room could see me. The only problem that office had was noise—I could hear everything in the apartment. Fortunately, I lived alone, so the noise problem was a minor one.
3. Figure out what you need and buy the best equipment you can—used.
I have a custom-made desk in my office. My husband found the desk used at an insurance liquidator’s auction for $75. The desk is built for someone 5’5” (my height), so I don’t have to elevate my chair and put little blocks under my feet to sit in a proper position at the keyboard. None of my file cabinets, mismatched though they are, cost more than $25. Some were free, since businesses often junk the things that they no longer need. Remember that your office is not a public space, so it doesn’t have to be pretty. It just has to be functional.
4. Your home office needs a door, preferably one you can close. I didn’t have a door that I could close in that dining room office, but I could have rigged one up with a beaded curtain or a blanket. But you need some way to shut out the world, to let your family know that you are working and cannot be disturbed except, as novelist Nora Roberts used to tell her children, in cases of fire or serious injury (she actually said arterial bleeding, but I think injury is a bit more prudent). If you live with others, keep your door closed when you’re working. Open it only when you want company. Post your hours on that door, so that everyone respects them—including you.
5. Remove all distractions.
I took the television out of my office when I stopped writing non-fiction. (It was a good thing too, because I’m a political junkie and in election season, I can watch the cable channels 24/7.) Take the games off your computer and anything else that might waste your time. (I finally had to ditch Garage Band from mine because it kept me from writing.) Figure out what your business requires and put only those things in your office.
6. If your business is not something like eBay that needs a continual on-line presence, then set up a separate computer for your e-mail and your internet connection.
You can buy a good internet computer used (on eBay, in fact) for a few hundred dollars. It’ll be the best investment you can make. E-mail distracts. Most computers are set up so that the system pings when new mail comes in. My internet computer pings for e-mail, bongs for instant messages, and trills when my Facebook page updates. Those little sound effects are hard to ignore. So is the temptation to research something when you should be producing. Make a list and research later. Find a space for another computer and use it for the internet.
7. The same goes for the telephone.
If your business does not require you to use a phone most of the time, take the phone out of your office. Set times to make phone calls. Let voice mail pick up when you’re working and return calls later. The fewer distractions you have in your office, the more efficient you will be. The more efficient you are, the more you’ll get done—and you won’t have to spend as many hours at your desk.
8. Make hard and fast rules that help you become more productive.
For example, I do not allow any fiction in my office except my own fiction. I am too prone to reading other people’s work instead of doing my own. No novel without my own byline crosses the threshold. For some reason, non-fiction doesn’t distract me, so I can keep all my non-fiction books inside my office. But fiction? Forget about it. You’ll find your own time sinks. Ban them from your workspace.
9. Insurance.
Get a business rider on your homeowner’s policy. Insurance usually doesn’t cover business computers in the home and often won’t cover any other business equipment in the home. So your family’s computer in the kitchen is covered, but your precious work computer, where you make your living, is not—unless you spend an extra few bucks per month to insure it against disaster. (Also, if you have people visiting your workspace [your yoga studio or your therapy practice, for example], then you’ll also need liability insurance, with a multimillion dollar rider. People can sustain lifelong injuries just by falling down stairs. You don’t want someone to fall down your stairs and sue you for everything you own.)
10. Finally, make your workspace comfortable.
Make it a place that’s your haven, somewhere you want to go every day.
Setting up your workspace is complicated, and you won’t get it right at first. You’ll have to re-evaluate it as you get used to freelancing and you identify what your needs really are. Be flexible. Try not to spend too much money. And make sure your workspace is yours, not someone else’s.
Chapter Four
Business Plan
In some ways, this is an ironic chapter, because I have reached a point in my life where I’ve realized that most plans don’t work. What I envisioned for myself as an 18-year-old wannabe writer has not happened. What has happened are things that I never could have imagined. Even my somewhat more realistic visions from my 25-year-old post-Clarion Writers’ Workshop self have not quite happened the way I expected.
From the vantage point of 1985, I never would have thought I’d be sitting here.
Of course, if I took my 25-year-old self and showed her my life, she’d be awed and thrilled and she’d be happy she achieved it, although she would ask why I had not achieved some of her wilder dreams. Some simply aren’t possible in 2010. I decided some weren’t for me. And a few, well, I’m hoping I’ll achieve them in the future.
So as I sit here, with a deep understanding of how futile planning is in a career in the arts, I also realize the importance of a business plan.
You may all go “huh?” in unison now.
Business planning is important, no matter what you do as a freelancer. Yet you need to be flexible and understand that your plan is simply that: a plan. And like all plans in the movies, it never quite goes the way the protagonists think it should.
Business plans come in a variety of forms. Some business plans are required. In the early 1980s, my then-husband and I wanted to open a frame shop and art gallery. He had a lot of experience with custom framing, and he’d operating a frame shop out of our home for a year. He had made some money. Then we figured (for reasons now lost to the mists of time) that we needed to open a storefront.
We did what all broke former college students do: we applied for a loan. First we went to our bank. Credit was as tough then as it is now, and so the bank (nicely, because banks were nice way back then) declined to loan us money.
So we went to the Small Business Administration and applied for an SBA loan for $60,000. (Boy, that number makes me shudder these days.) The SBA required financial records and a business plan. We had no idea what a business plan was. The SBA nicely supplied us with a form, which we filled out.
I’m sure some version of that form is online now. You can find other versions of business plan forms in accounting software and in self-help books. I’m not going to supply one here, but I will talk about it briefly. If you need something like that for your new business, then I would suggest you cobble one together from a variety of forms, just to cover all your bases.
In essence, what the SBA had us do was project five years of income. We had to justify that income—we couldn’t just pull numbers out of our butt. We justified our projected income based on my former husband’s sales for the previous year out of our home, and the yearly sales at the two frame shops that had employed him before he started the home store.
Then we had to extrapolate that income to a storefront, with advertising and good traffic. We had to show how other businesses in our area did—not just frame shops, but other businesses in the strip mall where we hoped to open the store. We had to understand the traffic patterns, the number of possible clients, and the way that all became sales.
When we finished our educated guesswork, we had to turn to our expenses. We knew what the rent and utilities would be. We knew what we would pay our single employee. We knew what our supplies would cost. Framing was easy—our expenses were a percentage of each order. The customer chose the design, and then we ordered the supplies. We had mat board and mounting boards on hand, but mostly, we had no up front supply costs. It was all sixty-to-ninety days after we ordered the material.
The only expense we had was the art itself, and we got a lot of the original work on commission. We bought posters at a discount so that browsers had things to frame, and we framed some of our favorites.
As for the equipment, we already owned the expensive stuff for the in-home business. So our expenses were pretty low. Where did that $60,000 number come from? Two years of operating costs, plus some cushion for our own salaries, etc.
The SBA came through with a loan…of $20,000. Which my ex promptly turned down, without consulting me. He then gave the business plan to his father, who funded us, which turned out to be one of those colossal mistakes, mostly because of our naïveté. I think now if we had taken the leaner, meaner SBA loan, we’d have worked harder, and we might still have a business.
Not, mind you, that I’d rather be doing that than this.
The SBA looked at our business plan, found problems with it, particularly in the overly optimistic estimates of income, and decided to fund us for a year. They then cut our salaries, and that’s where they got the $20,000 number.
Which isn’t bad. They were wrong on the income—we had a lot of traffic: my ex was good at what he did, and had a lot of loyal customers from the moment the shop opened. But they were right about the hidden expenses.
And that, I’m sure, comes from looking at countless business plans from countless businesses, all built on hope and fear and guestimates.
If you haven’t opened your small business yet—be that as a freelance writer or a frame shop owner, a pediatrician or a tow truck driver—then write up a business plan as if you were applying for a loan. Download those documents, design the right one for you, then do the research and be honest with yourself.
Don’t fudge the numbers. If you can’t get the income to outweigh the expenses by being honest, then you probably aren’t ready to go freelance. See the section on money management in this book, because it is in financial planning that most freelance businesses go belly up.