"Required reading" for today's smart writer.

"Required reading" for today's smart writer.
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Wednesday, August 14, 2013

Failure to Launch! The Top 5 Mistakes Writers Make in Transitioning to Full-time Freelancing


 


Guest Post By: Yuwanda Black
 
I’ve been in the editorial/publishing industry since 1987 and I’ve been freelancing since 1993. I owned/operated an editorial staffing agency in New York City from 1996 to 2004, interviewing and hiring/firing tons of freelancers. I held my last full-time job – while freelancing on the side – in 2007.

As you can see, I’ve been on both sides of the freelance hiring desk and I’ve done it while working full-time and part-time. I recount all this to underscore that what I’m about to tell you comes from a healthy dose of first-hand experience.

You can read what others have gone through and you can think you know what it’s all about if you freelance on the side, but nothing could have prepared me for the joys and pitfalls of being a full-time freelance writer.

FYI, there have been far more joys than pitfalls. And speaking of pitfalls, here we’ll discuss the top five mistakes freelancers make – in my opinion – when
transitioning from a full-time job to the wonderful world of freelancing fulltime.

1. Not treating freelancing like a business: Plain and simple, when you freelance, you’re starting a small business. Too many freelancers aren’t prepared for this.

It doesn’t mean you have to go out and get papers on your business (ie, incorporate it), but it does mean that you have to become organized as far as keeping receipts; budgeting for expenses; learning about tax write-offs (or hiring an accountant to handle it for you); etc.

If you don’t make this mental switch when you give notice at your full-time job, not only will freelancing be a nightmare for you, tax time might be too.

Because of my lack of knowledge and preparation, I once wound up owing Uncle Sam a whopping $17,000 in taxes – and I didn’t have the money to pay it when I filed. It took me about three years to pay off this tax bill and you’d better believe I ran to a small business accountant to get my affairs in order after that.

2. Procrastinating; goofing off: One of the best habits I’ve gotten into as a full-time freelance writer is time-blocking my days.

I time-block my days down to the hour. This way, if I’m tempted to spend too much time surfing or am just having one of those off days where I can’t decide what to work on, all I have to do is look at my calendar to see exactly what I should be doing at that hour.

Remember, your daily calendar is simply a breakdown of the lifetime hopes and dreams you want to achieve – chopped up into daily increments. If you goof off today, what dreams are you NOT achieving tomorrow?

Now, does this mean I never goof off or always finish everything on my daily calendar? Of course not; in fact, most days I don’t finish all of my duties. But it does keep me on track, which means I don’t waste a lot of time and move closer to my long-term goals every day.


This is empowering!

3. Underestimating how much time they need to spend on marketing: Marketing is the lifeblood of every business – especially a new business. Freelance writing is no different.

In the beginning, upwards of three-quarters of your time should be spent on marketing in my opinion. After all, if you don’t market to bring in jobs, all that other stuff you think it is so important won’t mean jack – because you’ll be out of business before you ever get in business good if you don’t land jobs

So once you have your web presence up and your writing samples done, turn your attention to marketing. FYI, learn what to put on your freelance writing website to attract clients.

Speaking to this point, in the open thread, How Much Time Do You Spend on Marketing? on the uber-popular freelance blog, Freelance Folder, freelancers weighed in on this topic. Some said they spent “2-8 hours a day marketing;” others spent only “4-8 hours a week marketing.”

The editor summed up the overall message though, writing:

Something that most non-freelancers don’t realize is that it take an awful lot of marketing effort to build a successful freelancing business. The time that you spend marketing your freelance business is not time that you are getting paid for.
In fact, I’ve read where some freelancing gurus recommend spending at least half of your working time on marketing.

How much time you spend marketing for freelance writing jobs will ultimately depend on where you are in your career.

BUT . . .

The one thing that you should be clear about is that you should get on a regular marketing system. Marketing is a never-ending job. It’s the reason McDonald’s still runs TV ads; why Nike pays super-sportsmen like Tiger Woods a fortune; and why Bank of America runs web ads.

No matter how big you get – you will drop out of the consciousness of your target market if you’re not consistently putting yourself out there. This goes for big and small businesses alike.

Never, ever forget this.

4. Undercharging: This is a common mistake that almost all small business owners suffer from. While the reasons for this vary, the most common one is fear – as in fear of losing / not attracting clients.

SCORE (the SBA’s Service Corps of Retired Executives mentoring professionals) explains on their site why you shouldn’t be afraid to charge appropriately for your services, stating:

Generally, the tendency is to under price because small businesses are often afraid they won't be competitive if they price at the level of the competition. Maintaining competitiveness is always an issue, of course, but by charging too little a small company runs the risk of not making enough to remain in business. [And] Charging less can help you increase your total hours billed, but you run the risk of attracting customers who are looking only for the lowest price. They'll be gone as soon as the next new kid on the block contacts them with an even lower price.

My pat advice in this area is, “Forget what others say, charge what you need to make a living.”

But, DO hunker down and really get to know your numbers (ie, all of your living and business expenses), including taxes you will owe as a self-employed individual.

This brings me to the last mistake many make when transitioning from full-time employment to freelancing fulltime, which is . . .

5. Underestimating – and not putting aside – tax money: To avoid this, I set aside money from every payment I receive in my PayPal account (which is the account that 99.9 percent of my freelance income flows through).

So if I sell an ebook for $19.95, a certain part of that goes into a separate tax account. If a client pays an $895 invoice, or if a student signs up for a $297 freelance writing e-course – a portion of each payment is allocated for taxes.

I may make the transfer to my tax account once a day or several times a week, but I always know that before I transfer any monies from PayPal to my personal bank account, a portion of the proceeds must be transferred to my tax account.

I have a separate bank account that I use just for taxes. This way, when I file my quarterly or annual taxes, the funds can be taken right from that account. I never have to worry about if I’ll have the money to pay my taxes – I always do.

Freelance Writers: Wondering How to Figure Out How Much You’ll Owe in Taxes?

Here’s a great chart that will give you a “quick and dirty” idea of what you’ll owe in taxes as a freelancer based on your income, deductions, etc.

The last thing you want to do is owe Uncle Sam – trrruusssst me on this. The interest and penalties pile on so quickly, it’ll make borrowing from the mob seem like a good idea. So plan for this from day one of freelancing full-time – even if you discard every other piece of advice I’ve outlined here.

And … welcome to the wonderful world of freelancing. The only regret I have is that I didn’t take the plunge – fulltime – sooner!

 About the Author:


 Yuwanda Black heads New Media Words, an SEO writing company, and is the publisher of InkwellEditorial.com, a blog devoted to helping others start successful freelance writing careers. She's also the developer of two e-classes and the author of over 50 ebooks, most of which cover some aspect of freelance writing. 





Thoughts? Any of these you agree with, readers? Do tell.

Image: "5" Freedigitalphotos.net

16 comments:

  1. I'd like to start things off by thanking Yuwanda for this informative, insightful,
    in-depth post.

    ReplyDelete
  2. Thanks for allowing me to appear in your space Jennifer. It was truly a pleasure.

    And, it's a good thing you only asked for the "Top 5" mistakes freelancers make -- I could have gone on forever on this topic. If there's a mistake to be made in freelancing, I've made it -- and am happy to share. :-)

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  3. Thank you, Yuwanda, you gave me a tip on time management, the time blocking idea.

    ReplyDelete
    Replies
    1. Thanks, quietspirit,

      Glad you found this piece useful.

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    2. You're very welcome.

      I have so much going on that my work days can very easily become scattered. I don't know what I'd do without this method of managing my day.

      Glad you found the info helpful.

      Continued success! :-)

      Delete
  4. I'm sure you can Jennifer. Some days (like now!) I'm just completely overwhelmed -- and it's purportedly the "slow season". Lord help a sista come September!

    But it's all good -- I try to remain grateful instead of complaining.

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  5. Thank you so much for these great tips, Yuwanda! I really like the time blocking idea. Thanks, Jen, for hosting!

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    Replies
    1. Karen,

      Good to know that you approve. :-) Thanks for adding to the mix here.

      Delete
    2. That one tip seems to be the one that resonates with a lot of freelancers Karen. Glad you found it helpful. It took me years to get so "regimented" with my time. But, it's paid off in spades.

      Hope it does the same for you, and thanks for dropping by.

      Delete
  6. Great info Yuwanda,

    Only for what procrastinating, or goofing off is concerned, a lot of big successes start as failure, or frequently are helpful to discover possible - not planned for - fortunate side effects.

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    Replies
    1. True, as long as it doesn't become a habit. That's the thing you have to guard against. :-)

      Thanks for dropping by.

      Delete
  7. This comment has been removed by a blog administrator.

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  8. Yuwanda, Thank you for these tips especially the ones about taxes!

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    Replies
    1. Thanks Sue, for your feedback. Much appreciated. :-)

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    2. You're welcome Susan. Getting right from the start with Uncle Sam will make freelancing so much less stressful -- especially around tax time. So get in the habit of putting that money away religiously. :-)

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