Posts Tagged ‘business expenses’

AWP Panel: Making Money as a Freelance Writer, Part 3

In this installment of my AWP presentation, I’ll talk about conceiving of your freelancing writing as a business, which it most certainly is. Check out part 1, where I discuss some good starter venues for freelance writers, or part 2, where I talk about corporate communications and briefly outline ways to get started in that field.

Once you have attempted a few freelancing writing projects or corporate communication gigs, been successful, and decided you want to do this again, it’s really time to learn about the business of writing for a living. Even if you only earn a few hundred dollars a year, failure to organize and “businessize” can create nightmares for you along the way–definitely at tax time. I had absolutely no idea how to do this when I started out, which is why I relied (and still heavily rely!) on MediaBistro and freelance writer/guru Michelle Goodman’s book My So-Called Freelance Life.

MediaBistro is a members-only, online space where you can find job leads, articles discussing stuff like how to pitch editors, how to delve into new markets, how to use social media…anything writing related. Also? The site has a directory of mastheads complete with contact information, articles about how to pitch specific publications (which detail exactly what the mags are looking for and what specific person to contact). Bottom line, this will be the best $49 you’ll spend each year. I have earned that cost back every single year and then some. Plus, it’s a business expense. More on that later.

The other source, Goodman’s book, is subtitled, “How to survive and thrive as a creative professional for hire.” That pretty much sums it up. Goodman walks you through everything you’ll need to set up a business plan, set your rates, calculate your budget, pay your taxes…all kinds of stuff you never imagined you’d have to think about.

Essentially, you should stop reading this blog, go buy the book, read it, and then go forth and write for a living. But if you want a quick and dirty low-down of essentials to writing as a profession, you’ll need to do the following:

1. Buy some good freelancing software. I use a program called TaskTime, which is for Mac. It keeps track of all my clients, all my projects, and what phase each is in. Have I got a deadline coming up? Is an invoice past due? Have I invoiced a client yet? When precisely did that company pay me? TaskTime tells me all this stuff. Then, each quarter, it tallies what I’ve earned so I can figure out what I owe the tax man. TaskTime makes wipe boards and scraps of paper seem dingy and antiquated in comparison (which they are). A crucial feature of TaskTime is that it tracks how many hours I spend on specific tasks and projects. When I’m done with an article, I know just how many hours I spent researching, organizing notes, revising, etc. Granted, much of my more creative writing happens in the shower or the wee hours of sleeplessness, but for the most part I get a good picture of my time allocation.

2. Set up a savings account for your tax money. This might not be news to you, but you don’t get to keep all the great money you earn as a freelancer. You will have to give about 30% of it to the government. My practice has been to open a separate savings account. Then, immediately upon getting paid, I transfer exactly 30% of the check into that account. It’s not ever my money so I’m not ever tempted to spend it. When I have to file my quarterly taxes, I don’t have a stroke when I see the red number I owe Uncle Sam. I just breathe easy knowing that dough is safely stashed in my tax account, as I call it. The piddly interest it earns just helps me feel more confident in case I have underestimated.

3. Get yourself some folders and learn to use Excel. You’re going to need to keep track of all your expenses. If you are going to be a freelance writer, you need/get to write off expenses like Goodman’s book, MediaBistro subscriptions, new laptops, TaskTime software, the miles you drive en route to a meeting with a client, etc. You must keep fastidious records and save all your receipts. If you don’t like having physical folders, buy yourself a scanner and make virtual ones. Then save the receipt for the scanner and mark the purchase on your spreadsheet as an expense.

4. Figure out your bottom line rates. Whether it’s a per-word rate or an hourly rate, you need to figure out what rate you can’t dip beneath. Then, once you’ve figured this out, you must NEVER work for less than this. To do so means you are paying to work. Many people don’t consider that you will not get paid for any of the time you spend pitching, setting up interviews, filing an invoice, scanning receipts, etc. In any given week, you’ll do about 14 hours of this “business” stuff. That adds up over the course of a year! Your rates need to reflect this if you want to live above the poverty line.

Disclaimer: I have strong, strong negative feelings about those bottom-of-the-barrel writing gigs you see plastered all over the internet. Taking those gigs does all writers a disservice because it encourages clients to think this is what writing costs or should pay. Do not work for a rate less than your bottom-of-the-barrel rate.

Here is an example. I was recently offered $75 to write a mid-length piece for a magazine. If I were to take this sum, I would immediately lose $22.50 to my tax savings account, meaning I would earn $52.50 for my time spent writing. It will certainly take me at least one hour to do unbillable things, like schedule research interviews, file paperwork, track expenses, etc. Probably I’d spend 5 or more hours researching and writing the article, then a few more hours revising. That means, for $52.50, I’ve worked 8 hours (minimum). After paying my babysitter $80 for that time I worked, I would have paid $47.50 to write that article.

Setting a minimum rate per word or hour in exchange for your time spent writing does not cheapen the art. Rather, it is business. You are doing this for a living. It is your profession and you need to be compensated for your work. Never work for less than your minimum rate.

What is this rate? Goodman’s book, MediaBistro and lots of other freelance writing resources offer great equations and help in determining this specifically based on your expenses, etc. In general, as a graduate student with little to no experience, you are worth at least $20 per hour for writing. At least! Remember: writing is indeed an art and it’s challenging and not everyone can do it. Value your skill. Make it your business to earn money writing.

Posted by on April 10th, 2010 1 Comment