- Finance, Advice
How not to freelance: Or, why I finally admitted that I was a business owner
This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.
I became a freelance writer two years ago. In the beginning, I wrote while taking care of my daughter full-time and I had just one client who I wrote for four to six times a month. It didn’t feel like a job, it felt like a hobby that paid or a side-gig that kicked in a bit of extra cash every month.
When my daughter began preschool I had more time to write and I took on two more clients. I felt more legit, I was making more, and I finally felt confident calling myself a writer but I was still making under twenty thousand dollars a year. The work still felt negligible, ephemeral. It still felt strange checking the “Self Employed” box on my taxes. After all, I was a writer, not a business. I hated business!
I’ll admit that this mindset continued unexamined until a month ago, even though writing is my sole source of income. Even though I have a handful of solid writing clients who love my work. Even though I’m now turning away more business than I take on.
A month ago, however, something shifted and I realized to my shock that I am a business and it was time I started acting like one. Because I’d always thought of myself as a writer rather than a business owner, I’d never developed systems for accounting or paperwork and as a result, the administrative side of my freelancing was a mess.
I was being paid different rates by different clients. I invoiced through Paypal, Excel, and printed invoices and because I had three different invoice systems my invoice numbers often overlapped, I had no way to record if invoices were paid or not other than going back and manually reconciling them.
I never knew how much I’d made in a given year until I did my taxes at year-end and I had no idea what my costs were for my web-hosting, office supplies, or advertising.
When I finally stepped back and took stock of this situation it seemed absolutely insane that I’d run things like this for so long. I’m a meticulous, organized, on-top-of-things person but that mindset - believing that I was a writer who just happened to get paid for doing what she loved rather than a creative professional building her career - completely undercut my ability to approach things with a focus on financial success rather than creativity.
As soon as I realized this, I made three changes.
I Developed a Bookkeeping System
There are many different options for accounting software (Xero, QuickBooks and NetSuite, to name a few) but I’d worked with QuickBooks before and loved their software, so I bit the bullet and signed up for a paid account.
By doing so I was instantly able to link my bank accounts to track and categorize business expenses, see an up-to-date tally of yearly income, and easily issue and receive payment for invoices. I could see how much I’d earned from each client, how much outstanding income I had coming in, and come tax time it’ll be easy to total up deductible expenses like my home office and phone bills.
I really wish I’d done this sooner.
I Began Marketing Myself Differently
I have written a personal blog for years; it’s one of the first results to pop up when you Google my name and it’s brought a lot of business my way.
My book deal came about after a publisher read one of my blog posts, and writing to an audience for over a decade has really helped me hone the conversational tone my clients love. But I don’t derive any income from my blog. I run advertising that just covers the costs of my web-hosting (something I realized only when I began tracking expenses and income via QuickBooks) yet when you arrive on my blog, the blog page comes first and the “work” section lives in a separate page you have to navigate to. Not the ideal situation for someone who wants to hire me to work for them, but because I thought of myself as a writer and not a business owner, it has always made sense to put the writing first.
I’m currently working to redesign my site to give a more professional purpose. My bio, writing links, and client testimonials will live on the landing page while my blog exists in a separate page. For my regular blog readers it’ll mean a quick bookmark update but for prospective clients, it’ll be far easier to find out who I am and why they should hire me.
Which brings me to number three...
I Began Aiming Bigger
Previously, I’d write for almost anyone who would hire me. I wasn’t confident enough to actively seek out prospective clients so whoever approached me, whatever they were paying - I’d take it.
Honestly, this isn’t a bad strategy when you’re first starting out as a freelancer. It’s important to build up a work portfolio and when you’re an unknown quantity you often have to take lower paying clients to do so. When you’ve become more established as a freelancer in your field, however, it’s time to determine your worth and negotiate accordingly.
When you’re attracting more work than you can accept, you can afford to be more selective about what work you choose to take on and charge what you feel you’re worth based on experience and skill-level. It can be a challenging mindset to adopt because at first it feels strange turning away the type pf paying work you would have once killed for - but it’s important to remember that your time is valuable and your skills are, too.
One exception to this for me is my loyalty clients. I still write for the first client that ever hired me, even though they pay me significantly less than I’d charge if they approached me now. This doesn’t mean I feel obligated to write for them forever but freelancing is a tough business to break into and I’m immensely appreciative of those who took a chance on me when I was a newbie writer. I wouldn’t be here without them.
Creative types like writers, photographers, and artists often share the same mindset I had for so many years. The business/finance/bookkeeping side of things is so unappealing and foreign that it’s tempting to just avoid it altogether. And while that joy of creation is the reason behind the work we do, we won’t be able to make it our life’s work if we don’t also find a way to make it profitable.
Trust me, if you’re reading this, you are a business. It’s time to start acting like one.
Madeleine Somerville is a writer, blogger, and the author of All You Need Is Less. She has written for The Guardian, Medium, Earth911, Yahoo! Shine, TreeHugger, QuickBooks, and Pure Green Magazine. She lives in Calgary, Canada with her four-year-old daughter and writes at SweetMadeleine.ca.