understanding freelancing, teleworking key points

no matter what the economy there’s
always a reason to consider a freelance career when times are good freelancing
can help you gain flexibility and spend your time more enjoyably and when times
are bad freelancing is one way to make your own path despite the tight job
market but before we get too deep into things we need to define what we’re
talking about starting with the word freelance I like Wikipedia’s definition
which is somebody who is self-employed and is not committed to a particular
employer long term it’s worth noting that freelancers are generally
considered sole proprietors or sole traders as they’re called in Great
Britain in the United States the word freelancer is synonymous with
independent contractor a group of over 10 million people in the United States
the fact that so many people are independent contractors is good news for
you because it means that the market is accustomed to hiring and working with
such people but independent contracting is only one of four alternative
employment arrangements another type is on-call work for example a graphic
designer who comes in to lay out a department stores ads once in a while
about two and a half million Americans fit this description a second type is
temporary help agency work more commonly known as temps this is actually how I
got my own start fresh out of college a temp agency would call me often at 8:00
in the morning and I’d go into their clients office and do small projects a
little over a million Americans are temps the last kind of alternative
employment is work from agencies that specialize in long term contracts it’s a
lot like temping except that the jobs tend to be full-time and they last for
much longer a little under a million American
workers are in this kind of arrangement now I should mention that this course
won’t talk about all the unskilled or piecemeal work such as stuffing
envelopes or mystery shopping to be blunt
a lot of those alleged jobs are out and out scams and the ones that aren’t are
so low-paying that you can’t truly build a career on them I’ll talk a bit about
them in the video avoiding scams but let’s get back to independent
contracting which is where you handle all the details of the job admittedly
the differences between this and other kinds of
of employment can be subtle and in fact you’ll probably find yourself doing a
mixture of all four of these so-called alternative employment arrangements
during your freelance career and that’s okay it’s what I’ve done myself for this
course however I’m going to focus on independent contracting I think it’s the
hardest of the four work styles because you have the most responsibility but
along with that comes greater freedom to work as you want to grow your business
and to spend your time doing what you really love when people start thinking about a
freelance career they usually focus on three things the service that are going
to offer how they’ll get new clients and what they’ll do with all that newfound
money in free time these are all fine things to think about but there’s one
more to consider and argue that it’s the most important how you’re going to spend
the minutes hours and days of your working life I believe that your
approach to this question is ultimately what determines your happiness in a
freelance career because if you’re not happy with the minutes hours and days
you won’t be happy in life now it’s hard to know how things will go until you
actually start working freelance but some practical preparations will improve
your mindset and then you can make changes as you go I’ve made a list of
questions to get you started you’ve probably already answered most of these
questions subconsciously but now it’s time to write your answers down that’ll
be an important motivational tool after you’ve been working freelance for a few
months and you start feeling bogged down in the details the first question is why
do you want to freelance your own answer might seem obvious to you but there are
many possibilities to make more money to have time to travel to be at home with
your children and so on whatever it is knowing your answer will help you make
decisions as you go forward the second question is why can’t you get that in
your current situation maybe you can with some small changes but let’s assume
that freelancing is right for you four simple questions will help you be ready
for your freelance career first where will you work even if you’re happy
working in just one place I recommend scouting out secondary spaces just in
case there’s a problem with your preferred space now keep in mind that
you’ll probably need a place where you can meet clients face-to-face once in a
while it should be a quiet private place that shows that you take your clients
time seriously if you have a colleague who let you use their conference room
that’s great otherwise look into co-working spaces and business
incubators in your area on that note what do you need for your work if you’re
a digital artist maybe that’s a flat space for your tablet along with an
electric outlet if you’re like me you also need
internet access and a place to have phone meetings going on figure out when
you’ll work do you want to take long lunges will you work weekends
do you like to stay up late or get up early keep in mind that you’ll have to
work a certain number of hours every week and those hours have to happen
sometime finally figure out who else will be affected by your move to
freelancing this is especially important if you live with anyone and plan to work
from home but even beyond the home space freelancing could affect your personal
relationships once you’ve got this all down your next step is to actually
practice your work habits it’s one thing to say that you’re going to get up at
8:00 a.m. and work from the local cafe it’s quite another to get yourself out
of the house when that time arrives so actually start doing it even before you
have any clients get to your workplace at the appointed times then you can work
on your own projects if you like but you’ll be getting used to the
circumstances of client work so start discovering the work habits you enjoy as
early as possible long before you have any clients then when the work starts
arriving you’ll find yourself happier to do it as a freelancer time is your
stock-in-trade whether you build by the hour or by the
job you always have to know how much time you have available and how it’ll be
used one thing that throws a monkey wrench into those calculations is when
you’re facing a big overwhelming job it’s easy to panic but individual
freelancers can and do finish such jobs all the time the secret is to break down
your project into smaller tasks set a schedule and then do those tasks first
get a thorough understanding of what the client wants the finished product to be
the bigger the job the more you need advance planning
second deconstruct the job into its component parts and make a list of them
this requires experience in doing such work like let’s say that you have to
design and layout a 40-page catalog by March 3rd if you’ve done such a job
before you’ll have a sense of how many product photos will be needed when to
call in the photographer and how much time that person will need you’ll also
an acknowledge of your own work habits of how much you can do in a day and when
you like to take a break arranging work so it fits your time will
help keep you motivated once you have a list of what needs doing it’s time to
schedule at all start with a deadline and then count the number of work days
between then and now so if we know the catalogues due on March 3rd and it’s
January 20th today then we see that we have six weeks to finish it next divide
the time available by the tasks we might take the first week for design and
approval the second for creating the template and the third for photography
and then the rest for completing the catalog finally write specific tasks
into each work day on the calendar take weekends and holidays into account and
building a little free time if you can in case anything goes wrong now you know
exactly what you’ll be doing on every day now I have to tell you I recommend
that you do the deconstruct and schedule parts of the job before you even make
the agreement when you present your proposal you’ll need to know how many
hours the whole project will take so you
how much to charge it’s all part of the sales process now you’re ready to work
each day you’ll simply perform the tasks you’ve set out for yourself knowing what
you’ll do and how it’ll add up to a finished project is an enormous comfort
you are in essence going back and forth between being your own boss and being
that boss’s worker there are two things you need to do at the end of every day
first check and adjust the schedule if you got more done than expected decide
whether to move everything up take the time off or give it to another client or
whatever you choose if you’re falling behind you’ll have similar choices
finally look over the next couple of days work to prepare yourself mentally
and make sure you have everything that you need it’s also a good idea to check
in with the client once in a while to give them a progress report check any
assumptions you’ve made and help them relax in the knowledge that the jobs
being done set these mini deadlines in your agreement so the client knows what
to expect and then before you know it you’re done the projects over the
clients happy and you have something big to be proud of now that might seem like
an inordinate amount of planning before you feel like you’ve actually started to
work but the planning is the work and in the end it all adds up to successful
completion of a project every time you talk to prospective
clients they’ll want to know why they should trust you remember it’s not just
money if someone does a bad job for them they might not have the time to get it
done right so the stakes are high your past work is one of the strongest ways
to show that you’re right for the job collecting it in a portfolio is one way
to convey this information the first step in building one is to have evidence
of what you’ve done if you’re a writer a graphic artist or other creative
professional whose work ends up online or on the page your pieces can go
straight into your portfolio if on the other hand you create works that aren’t
packaged so well you’ll have to package them for example a makeup artist could
take before-and-after pictures of clients and an architect could include
drawings and photographs of the work but what if you’re something like a massage
therapist or a business consultant in that case you’ll have to devise ways to
depict your work that are true relevant and convincing here are recommendations
from past clients are especially important but you can create an
impressive portfolio as well photographs have oh well appointed in spotless
massage studio tell a tale of competence as to a description of your methods
materials and clientele and a business consultant can show figures and charts
that demonstrate good work you shoulda naanum eyes details about past clients
or contact them to be sure it’s okay to mention them by name once you have all
the pieces in one place you need a way to display them nowadays the usual place
is a portfolio website if your potential clients live more in the offline world
or if you expect to meet a lot of them face to face you might also want to have
a printed version of your portfolio now we’ve assumed that you have worked
to show but what if you’re trying to freelance in an area where you don’t yet
frankly I’d recommend you reconsider your choice because the lack of a
portfolio is really going to hamper your efforts but one other option is to plan
to start with forms of marketing that don’t require a portfolio for example
advertising another is to do some jobs for low pay or even for no pay to build
up your portfolio this is a good opportunity to do favors
for family friends and nonprofit organizations that you support finally
it’s a good idea to create two other pieces to complement your portfolio the
first is a brief text that summarizes your experience maybe a hundred words or
so you’ll use that in emails applications and marketing materials
eventually you’ll have several versions of it for various purposes I personally
keep a plain text file on my computer so that they’re always at hand
you’ll also want to create a resume it would be nice if others could
intuitively sense that you’re right for a job but they can’t they need to be
shown and nothing convinces as well as a clearly presented record of success and
that’s what a well-prepared portfolio does for you even if you’ve decided to keep your job
while freelancing you’d be wise to figure out how the startup will affect
your finances because no matter what you’re going to have some new expenses
first are the large infrequent costs such as equipment that could include a
new computer software or a desk basically anything you’d normally find
in the workplace but don’t own yet it also includes necessary certifications
and one-time professional services these comprise the bulk of your startup costs
the second kind of expense is recurring costs such as utilities subscriptions
and monthly insurance payments keep in mind that as a freelancer your phone and
internet bills are likely to increase along with your home utilities if that’s
where you’ll be working third are occasional costs such as those for
conferences training and professional consulting these can be substantial but
hard to predict finally we have living costs which are likely to change a bit
when you start freelancing oh there’s one other cost you can’t ignore debt
repayment if you want a nice breakdown of these costs in a slightly different
form but much greater detail I recommend Lara Spencer’s article what
it really costs to be a freelancer at freelance folder com4 all expenses
mentally balanced the cost of the item against the benefits you expect to get
out of it sometimes the benefit doesn’t have a direct financial value for
example spending an extra hundred dollars on a comfortable chair won’t
necessarily make you more money but your cost-benefit analysis will help you
decide whether that comfort spread over the life of the chair is worth the
hundred dollars now take a look at the exercise file to calculate your own
expenses the point of this is to figure out how much money you’ll need for that
initial spending spree and then for each month for awhile after that as I said
before I think it’s good to have six months of expenses in reserve although
more is always better you’ll start with your initial costs then subtract the
amount of money you have available to give the business the amount left over
is how much you’ll have to raise to get started for your ongoing finances for
figure out what your monthly cost will be then subtract any continuing income
that doesn’t come from freelancing for example from royalties investments or a
partner who supports you that amount is what you’ll need to either finance or
earn from freelancing every month putting this all together we get a
formula that looks like this your startup costs plus six times your
monthly deficit equals the amount of money you’ll need to stay afloat until
your income covers your expenses now that you have a target you need to
gather that amount of money together I’ll cover the various ways to do so
next I’ve mentioned how the biggest asset you
have from past jobs is your network of professional connections but that’s I
use it or lose it kind of thing you have to take steps to turn it from a bunch of
folks I used to know to a network of colleagues who helped me build my
freelance career I break those steps into three parts collect contact and
grow before going into detail I want to point out that the purpose isn’t to ask
these people for work you’ll do that later work might come out of it
naturally but forming bonds is more important right now the first step is to
take a walk down memory lane to remember and gather the names phone numbers and
email addresses of former colleagues who know and like your work you can collect
these contacts in any system you like your computer’s address book a database
system or just a plain text file whatever you use make it a Seoul central
and convenient place for such information because you’re going to use
it a lot throughout your freelance career I hope you’ve been saving all
your emails too because they’re a prime place in mine for old contacts as you
copy the information over it’s also a good idea to make notes about who those
contacts are and how you work together you’ll need that when you contact them
beyond your list of previous contacts I found the website linkedin.com to be a
great help I recommend you join it fill out your information and use it to
research old colleagues however I suggest that you not use its automated
tools to contact everyone from your address book because that could irritate
people once you have all the information gathered pick out a few people to
contact don’t just send them a form letter nobody likes that instead write
personal emails to those who you think will be most relevant to your freelance
career if they’re from a while back remind them who you are and how you know
each other later on you’ll broadcast your
availability more widely but for now your point is to start building
relationships with the top tier contacts be sure to let them know that you’ll be
freelancing this alone might lead to work but don’t be pushy if it’s been a
while since you’ve talked ask them what they’re doing and make sure they have
your contact information and you have theirs finally ask the
if they have any advice or if they know anyone you should contact this last step
can be amazingly productive it was one of these referrals that basically got my
writing career started that leads us to the last step
grow your network besides your existing contacts there’s also a world of
colleagues out there you simply haven’t met yet the best way to meet them is to
take part in communities that’ll bring you together such as mailing lists
conventions and volunteer projects but urge you to think broadly if you’re a
musician talk to writers directors and graphic
artists as well as other musicians that’s how the real collaborations get
started I have to stress again that you should do all of this with a light touch
first be sure to respect past contracts when you connect with old colleagues a
lot of companies have non-compete agreements that say you can’t take their
clients or employees when you leave if you have any questions about past
agreements that you’ve signed talk to an attorney
also some marketers will recommend that you just hit them all hard and
repeatedly with your message but for freelancing that’s the wrong approach
you’re not selling cheap trinkets to the masses you’re building relationships to
provide highly personalized services approach your network with respect and
you’re sure to get the same in return the few hours that you invest to create
your workspace will pay off big as your freelance career progresses because
setting up well will improve behaviors that you do every day
we’ll start by revisiting questions asked earlier specifically where will
you work and what do you need when you work to get the answers try thinking
through what you expect a typical day to be like let’s say that you think you’ll
spend about two hours everyday on email one hour on other housekeeping and five
hours on client work the email part can be done anywhere so all you need is a
laptop an internet connection and a comfortable place to sit now that’s the
easy part next comes the hour when you do other
housekeeping for that you might need to file paperwork so perhaps it can only be
done where your filing cabinet is that means you’ll need a space there with a
desk light and electricity and so on finally there’s the client work if
you’re a graphic designer for instance you’ll probably want a big monitor and
perhaps a graphics tablet if you’re a caterer then you’ll need an entire
kitchen full of equipment such items limit your mobility so you’ll have to
prepare that space appropriately of course all three of these spaces could
be in the same location such as your home and that’s fine but if you’re
freelancing dream is like mine and includes working while you travel then
you need to set up for multiple locations or create a mobile workspace
wherever you end up working here are some amenities you’ll probably need
first are the utilities these might seem obvious but it’s easy to forget that an
inviting looking garage Loft might get too cold for work when autumn comes
tangential to utilities are environmental items now I’m also
sensitive to sound so I want a place that’s quiet enough to concentrate but
loud enough so I can make a phone call without bothering anyone
next comes office equipment skipping the small stuff like paper pens tape and
staplers here are the things that I think are essential first a filing
cabinet along with plenty of folders people have talked about the paperless
office for years but I think you’ll always need a place to put sign
Jax Pass portfolio work and the like similarly you’ll need a printer and a
scanner so you can create and scan such documents next a paper shredder finally
we have the usual office furniture shelves lighting and a comfortable place
to work he’ll be spending a lot of time in your workspace make it a place that
you want to go the last category is the equipment that you need to do the work
this is where there’s the biggest variety among freelancers what you’ll
need is up to you and the requirements of what you do keep in mind that your
business equipment partly determines who your clients will be if you’re a
photographer for example you’ll need a certain kind and quality of equipment to
attract high-end clients now for such decisions you should do a cost-benefit
analysis that balances the cost of the equipment against the benefits you
expect to get from it if you can’t afford to buy such equipment consider
renting it as needed until you can the cost worksheet you did earlier will help
you figure out what you can afford lastly as you get to know other
freelancers take a look at how they have their offices set up visit as many as
you can steal their workplace ideas and try out plenty of your own it’ll take a
while for you to settle in but eventually you’ll find your own
workplace style starting out with the items in this video will get you on the
right track when someone says they want to hire you
for a project you’ll need to agree on a wide variety of points what you’ll do
how long it’ll take and what you’ll get in return if you don’t write it all down
you’re in trouble before you even start that’s what contracts are for if you get
work from a large organization that regularly uses freelancers there’s a
good chance that they’ll already have a contract for you but very few small
companies are that prepared and when starting out in freelance career a lot
of your clients will probably be small companies so it’s wise to have a generic
contract ready that you can edit to suit individual clients as needed again
I can’t give you specifics because they change from place to place also I’m not
a lawyer so I can’t give you legal advice but here are some overarching
themes to get you started the essence of contract is in two elements agreement
and consideration the agreement part is where you spell out what you’re going to
do and then the consideration part is where it says what you’re going to get
in return it sounds simple right the reason that contracts tend to be long is
that the details can be quite complicated but they don’t have to be
long the important thing is that your contract contains everything that you
and your client need to understand each other these things are usually set out
in sections known as clauses the contract itself might not give the
details of the work to be done often those things are put into a separate
addendum so that the contract can be used for multiple projects with only the
addendum changing there’s a sample contract and addendum in the exercise
files that you can use to start thinking about what to include in your own
contract now it’s a good idea to have a lawyer review it before presenting it to
a client but let’s get on to those clauses a contract often has an
introduction that states who the parties are and provides a definition of terms
for example rather than saying the name of the company throughout the document
the introduction might define it as the client simply for simplicity’s sake then
comes a description of freelancer responsibilities aside from a
description of work to be done one example is that the freelancer
he’s not to give away any of the client secrets matching that clause is one
saying what the client’s responsibilities are primary among them
is that you get paid but there are others as well such as to provide
content that will let the freelancer complete the work on time then there are
the clauses that deal with legalities some of them are who owns the finished
work what can each party do with it what’s the legal relationship between
the parties and who pays for expenses other clauses spell out what it means to
break the contract and what the consequences are for example a lot of
American contracts specify that both parties will first attempt to settle the
matter outside of court there might also be a clause that specifies the location
of the contract that is what local laws prevail this is called the jurisdiction
and it can matter if like me most of your clients are outside your home state
after all of these clauses comes the signature and date lines those are to
prove that the parties truly have a meeting of the minds so that’s the
contract that rules over all the projects that you do for this client but
we didn’t give details for the specific project that you’re about to do those as
I mentioned earlier can either go in the contract itself or in an addendum they
should include what both you and the client will do when it’ll be delivered
payment details including your rate and any other terms for example how you’ll
handle changes once the job is started you might need to add sections to your
contract that are specific to your work the client or the industry you’re in now
don’t use my example as your sole source also look at contracts that have passed
through your hands and talk to your colleagues for further ideas and don’t
forget the internet as a source I found that a cert for our sample freelance
contractor nup a lot of hits including some sites where you simply fill in the
blanks and get back a completed contract now if you do turn to the internet check
that the contracts that you find are relevant to your situation and again
review the resulting contract with an attorney to settle any lingering
concerns that you might have as your freelance career progresses
you’ll occasionally need professional services there are lots of people
selling such services but it can be hard to find the ones who are right for you
and your type of business just as it takes time and attention to
build a network of colleagues you trust it’ll take time and attention to gather
together the service providers you trust the big services you’re likely to need
are in the areas of Insurance bookkeeping and law as always the first
place to go is to your colleagues ask them who they’re using and who they’ve
heard is good also be on the lookout for professional networking events and
mixers at such events you’ll be able to talk with prospective providers
face-to-face try to find professionals who are right for you and what you’re
doing make sure they’ve worked with freelancers before the good news is that
some professionals even specialize in helping freelancers for insurance your
needs will vary depending on your location and type of business
there’s not really a one-size-fits-all solution if you know anybody whose
business is very similar to yours ask them who they use some business and
professional organizations can also direct you to appropriate insurance
agents if that fails try an online search for small business insurance
along with the name of your state or region whatever path you take plan a
substantial first meeting with the insurance agent to discuss your needs
with so many variations professional guidance is a big help here the same is
true for bookkeeping services the big thing you’ll need help with is taxes
they’re a little complicated and I’ll go into more detail in another movie but
the same tips apply for finding a bookkeeper as for finding an insurance
agent for lawyers I’ve had good luck through the Bar Association the
important thing to remember is that you don’t have to go it alone although it’ll
be hard to spend the money when you’re first starting out it’s smart to pay for
others expertise especially if it’s expertise you don’t have yourself or if
it’ll save you a lot of time and it doesn’t cost anything to look around or
to ask your colleagues for guidance when you need it you one subject that gives freelancers a lot
of anxiety is how to price their services we want to make a good living
but are afraid of driving the market away by charging too much so what’s the
right amount simply put it’s the area between charging too much and charging
too little believe it or not the bigger problem that freelancers face is that
they charge too little so I’ll talk about that first
there are a few reasons freelancers charge too little if you’re coming from
a salaried position where you did similar work you might figure out your
hourly right there and charge private clients a similar amount but that’s way
way way too low first of all you’re not going to build 40 hours a week
second you now have to cover expenses that your employer used to pay one rule
of thumb puts a typical freelance rate at two and a half times the hourly rate
that freelancer would get with an employer that’s not always right but the
point is that your rates will be much higher per hour a second reason you
might charge too little is that you can’t believe someone would pay that
much but if you’ve never been on the buying side of the equation you probably
don’t have a sense of how expensive good labor is talking to people in your
professional network and help you figure out what the real market rates are or
maybe you can believe someone would pay that much but can’t believe that pay it
to you assuming you have the skills that’s just basic insecurity talking
it’s hard to get a sense of one’s own value again talk with colleagues and
other professionals to determine what your realistic value is some government
bodies keep track of pay scales for various professions and that gives you
another data point in the US that’s done by the Bureau of Labor Statistics you
can search for details on your profession in their occupational outlook
handbook at BLS gov / oo H the problem with charging too little isn’t just
financial if you under charge prospective clients will see the low
figure and suspect that you’re just not very good and established clients we’ve
gotten used to your low rate will get spoiled wasting your time just because
they can afford it higher rate make them value your time more leading to better
work relationships and more fulfilling work now
talk about charging too much basically people buying your services have to
justify the cost to themselves it then comes down to a cost-benefit analysis
for the buyer the values are all pretty subjective and they’re not always easy
for the buyer to measure in dollars but they do perform such an analysis even if
it’s only in the back of their mind if your rate is substantially higher than
the cost of doing things internally or with another freelancer or not doing
them at all then you’re out of a job if you’ve gone through this whole process
you now have a reasonable sense of what the market will bear but there’s one
other factor you have to make enough money to keep your business healthy as
with many other parts of freelancing setting rates requires an understanding
of your own value it involves research and a certain amount of difficult
soul-searching but it can lead you to being able to charge your true value
confidently and successfully a big distinction between amateurs and
professionals is that professionals get paid for what they do the first thing
you’ll need is a bank account for your business I recommend you get one that’s
separate from your personal account that makes bookkeeping easier and keeps you
from having to give personal banking information to clients
I found the simplest way to receive payments in the United States is to
simply ask clients to send you a paper check then deposit that in the normal
way however you should also be prepared for electronic payments particularly if
you have clients outside your home country beyond traditional banks you can
also get paid through online payment systems such as PayPal I found it to be
great for smaller clients but because it’s not a real bank I do recommend that
you suite money from your PayPal account into your business bank account as soon
as the money becomes available although PayPal gives people a way to
pay you with credit cards it’s not as robust or as cheap as merchants card
systems those let you accept credit cards directly without PayPal as a
mediator again your bank can probably offer you such services or it can refer
you to somebody who can whatever payment option you use I recommend that you
write it into your contract but it’s also wise to ask the client how they
prefer to pay and then make sure it’s possible after all the more ways they
can pay the faster you’ll get paid every experienced freelancer has a story
about a client who doesn’t pay or who’s slow to pay it’s gonna happen to you too
but there are a few ways to make such experiences less frequent your first
line of defense is your contract as I said in the earlier video about creating
contracts you should include clauses that specify not only the amount the
client will pay you but also how and when along with the payment Clause have
clauses that spell out precisely what the clients getting from you that lays
out your argument before it ever happens by saying I did a B and C as the
contract specified now it’s time to hold up your end of the bargain but clauses
are only as good as their enforcement so it’s important you have text in the
contract that explains what will happen if you’re not paid it needs to be
realistic actionable and legal and you have to be prepared to go through with
it for example a common clause in the United States says that both parties
will seek mediation or arbitration before going to court and it spells out
the conditions you might ultimately decide it’s not worth the trouble to
follow through but again someone is eventually going to try to get away
without paying so be prepared finally don’t start the work until the contract
signed or until you have other legal proof of agreement this is the part that
can be hardest because you’ll be eager to get going but it’s important
psychologically that the client acknowledge that the projects actually
going to happen and that they’ll have to go through with their responsibilities
there is another way to make sure you get paid and that’s to take payment in
advance either partially or in full I’m of two minds about this on the one hand
requiring advance payment could hinder the sales process you’re essentially
demanding that they trust you more than you trust them on the other hand they’re
gonna have to pay you some time why not at the beginning there is one situation
where you should probably get payment upfront if the job requires you to buy
materials that are specific to the project or spend your own money to get
it started make sure the client covers those expenses first in this area you’re
just going to have to develop your own judgment and
into the experiences of your colleagues so you’ve finished the work and now it’s
time to collect as a reminder you should present your client with an invoice I’ve
included a simple invoice in the exercise files by the way sub counting
programs have their own invoicing function including the popular
QuickBooks in any event an invoice should include at least the following
elements start with your contact information then put the word invoice in
big letters at the top of the page that’ll help prevent it from being
buried include a statement that you expect to be paid how you should be paid
and when the deadline for payment is by the way I’ll often say something like in
45 days but then I’ll include the actual date then give a brief description of
why you’re getting paid here I’ll often reference the agreement saying for
example in accordance with our contract to February the 15th and of course
specify the amount you expect to be paid some clients also like you to include an
invoice number to help them track it in their records and if it’s for hourly
work I pasted my timesheet at the bottom of the page finally send it off make a
note of the due date in your calendar and try to put it out of your mind you
can drive yourself crazy worrying whether someone’s gonna pay you but
remember until the deadlines passed there’s nothing to be done I found that
most clients are pretty good about paying on time especially after your
first project together give them the benefit of the doubt but then be
prepared to act once the deadlines passed accounting is a huge field in itself
some people study at their whole lives and this video will only scratch the
surface both in terms of its concepts and the tools available but let’s start
with some basics first accounting is just numbers although money has a big
effect on how you live you can use math to stay in control of it that ties in
with the second point you can’t beat math if you have a thousand dollars and
you need to pay fifteen hundred you’ll have to find that other $500 somewhere
or make some other arrangement now let’s move on to the tools you’ll use to do
that math first I assume that you already have a bank account as I
discussed earlier you’ll probably have other accounts such as credit cards a
savings account and perhaps alone because a lot of these account records
will be on paper you should have a paper filing system but the paper is mostly
just for your archives in day-to-day use you’re going to use accounting software
all the systems I’ll mention here can handle multiple accounts just fine in
truth you could do what you need on a simple spreadsheet but there are some
really good programs out there that are worth considering the big one is
QuickBooks which is designed for small businesses and it costs a few hundred
dollars I actually get by with the same company’s personal finance software
quicken although it doesn’t have all the business functions of QuickBooks there
are also free accounting programs the best known of which is gonna cash at
canoe Cash org wikipedia has a long list of such programs under the rubric free
accounting software once you have an accounting system the basic procedure is
simple you record income as it comes in and expenses as they go out if all goes
well your accounting system will tell you exactly how much money you have at
your disposal at any given time the proof comes when you check your own
accounting against statements from your bank and lenders then you have an
opportunity to correct any errors after you’ve been running your business for a
while you’ll have created a record of actual income and expenses and can start
making budgets and plans for growth now no amount of accounting will solve the
puzzle of getting enough money in the door but when you have a good handle on
your finances you discover how many problems that you
thought were caused by a lack of money are solved by good bookkeeping it
prevents you from making ill-advised purchases it helps you work with your
bookkeeper and it relieves the pressure that comes from uncertainty no matter where you are and what you do
you’re going to have to pay taxes or at least you’re going to have to account
for them even if your payment amount is zero as with so many things tax laws and
practices vary tremendously from place to place but here are some rules of
thumb based on my own experiences first you’ll have to continue to file personal
taxes just like you did as an employee however you’ll probably also have to
file business taxes based on the company’s receipts that doesn’t
necessarily mean that you’ll end up paying more and in fact you might pay
less but it does mean more paperwork second you’ll probably have to change
how you file and pay your personal taxes third keep track of your business
expenses for tax purposes a lot of them will probably be tax deductible that is
you won’t have to pay taxes on the money you used for them depending on your
situation that can make an enormous difference on your year-end tax bill
there are two parts to keeping track of such expenses first note that they were
for business purposes in your accounting software second save the receipts in an
envelope until you do your taxes finally file and pay your taxes as early
as possible believe me they’ll pile up if you don’t and this is something that
no government is willing to forgive on that note I urge you to get professional
help for taxes at least the first time you file them as a freelancer there are
bound to be local peculiarities you didn’t consider and you want to get
started on the right foot having said that anybody can eventually
do their own taxes it just takes thought experience and planning you let’s say you’re all set up and ready to
go you know where you’ll be working your office systems are in place and
you’re ready to show your portfolio to prospective clients now it’s time to
find those prospective clients and more importantly to let them find you in
another video I talked about building your professional network but cautioned
at that stage not to hit them up for work now it’s time to get a bit more
aggressive first follow up on all past leads always keep track of who you talk
to when and why as you go make that a habit that’s how you build your
professional network over time once that’s done here are some things
you can do to make yourself more accessible and attractive to clients
going forward the first is to beef up your website in
an earlier video we talked about preparing your portfolio and of course
that’s going to become a substantial part of your site but there are a few
other elements it needs as well first a description of what you do put it front
and center preferably on the home page this is where you express all the
soul-searching you did earlier while sharpening your market focus it should
define your business in terms of the skill you’re selling the industry you’ll
target and the type of customer you’ll sell to other elements include
information about your credentials that is why people should trust you with
their projects finally make sure it’s easy to find a way to contact you and
that’s it you can also add other elements and I recommend you start
paying close attention to other freelancers sites for ideas but your
website’s not done yet you’ll also need a domain name and a
place to host the site your site will also need occasional maintenance a
website isn’t just a set it and forget it kind of thing that won’t take a lot
of time but you’ll either need to get the necessary skills or hire someone who
has them in either case realize that the benefits you get from your site are
directly proportional to the attention you give to its planning creation and
promotion your website is only one way to announce your availability online
you’ll also want to have presences on the big social networks such as Twitter
and face book I recommend that you do a land grab
on those services for a name that reflects your business even if you’re
not ready to add any content yet and don’t forget to add yourself to
professional directories related to your skill and location but eventually you
will start building out your social media homes Twitter of course is only as
good as the regular posts you make to it but there is a little space for self
description and on Facebook it’s possible to display quite a lot about
yourself on both systems as on other social sites there are opportunities for
responsible promotion a final way you can get the word out is by using
standard advertising techniques and I talk more about those later but really
the two most important parts when you get started are that first you have
information that’s clear and easy to access and second that you started
taking advantage of the connections in your professional network while at the
same time growing it if you follow the tips in this video you’re well on your
way so let’s say a client’s shown interest
in your services congratulations I’d like to take you from there
expression of interest until your first day of working for them a period of time
called onboarding I’ll break the process into four parts or the four e’s there
are expectations of you expectations of them execution of the agreement and
establishment of procedures the first two the expectations you should have of
each other should be spelled out in the agreement but there are matters that go
beyond the agreement to day-to-day management of the relationship they
strongly affect how well a project goes because ultimately its success depends a
lot on what the client does here are some things you should require of them
first the name of one single person who’ll be responsible for interacting
with you make sure you get that person’s email address and phone number if they
insist on having multiple people responsible make them explicitly divide
those contacts areas of responsibility otherwise you’ll be drawn into internal
battles or find that nobody answers your questions because they each expect the
other person to do it second spell out the materials and input that you expect
from them a lot of my own work is interview based I’ll study a company’s
technology then I’ll talk to the technologist responsible for it for half
an hour if that person refuses to do the interview I can’t do my work so the
project relies on that person’s involvement lastly get a promise of
responsiveness it does no good to know that they’ll deliver certain materials
if those materials show up too close to your deadline or even after it the third
part of the onboarding process is signing the agreement or in legal terms
executing it now this sounds obvious but it’s amazing how often real answers in
clients will sort of ooze into work without having an explicit and written
down meeting of the minds the signed agreement cements the relationship
finally we come to the last part establishment of procedures this is what
actually happens to get the job started where the rubber meets the road so to
speak it’s important to transition your relationship from one of seller and
buyer to one of colleague and colleague working together toward a goal I find
the psychologically tough especially if it’s taken a while to reach an agreement
a good way to ease this transition is to set deadlines and schedule collaborative
work right away meetings interviews draft reviews and so on that makes it
clear that the fun part has begun it’s worth mentioning that these procedures
will vary a lot from one situation to another especially depending on company
size onboarding with big companies might involve multiple levels of bureaucracy
for example while making such arrangements with a small company might
be more straightforward but the basic steps remain the same regardless of size
or type of company even after you’ve started to make it as
a freelancer you’ll have some choice over which jobs to take I see such
choices as a battle to balance three qualities in my life
security variety and success each job will have some quantity of each let’s
look at how to measure one against another first is security jobs that
score high on this quality are those that offer full-time work are with
established clients involved work that you’ve done before or that you know will
pay reliably and well moving on some jobs offer a variety these include those
with new clients so you can expand your base in case another client falls away
you might be using new skills to do things you haven’t done before or you
might find yourself in a new environment for example using unfamiliar software or
working in a new and interesting location I value variety because it
keeps my skills and outlook fresh which in turn helps me stay motivated and
marketable finally we have that nebulous criterion success jobs that fulfill your
hunger for success might change your business a positive way or give you more
of what you want but the first and foremost measure of success is whether
an opportunity helps you reach your long-term goals here I listed some
common reasons that people freelance and then you added your own it’ll lift you
above the immediate question and carry you back to your inner needs and desires
for example let’s say a client wants to fly you into their office for an intense
two week job preparing for a product launch it’s in a city you always wanted
to visit they’ll pay for your flight in hotel and you’ll have a few hours every
evening to wander around on the other hand that two-week project will prevent
you from taking a lucrative contract with a local client who’s always been
good to you so do you take the job the answer depends on a lot of factors
including your relationship with both clients how they’ll be affected if you
say no whether you expect more work from them in the future and so on but
ultimately you’re going to have to answer to your own goals if one of your
goals was to travel and work remotely then you’ll be biased to say yes if on
the other hand and your original goal was to have good
pay and more time with your family you’re more likely to say no now of
course your goals will change over time but I think your original statement of
intent is a good touchstone when faced with such choices and really my
overriding point is to remind you to take the long view especially because
such dilemmas can cause anxiety whenever they crop up remind yourself why you’re
doing what you’re doing and you’ll find that such questions answered themselves you as a service entered freelancer your
work is judged by how well it fits the client’s needs so you have to know what
those needs are first prepare know your clients business
before your first meeting and learn more based on everything they say you’ll
probably get a lot of information just from their website spending half an hour
studying it ahead of time will put you ahead of most other service providers
second listen more than you talk as the saying goes that’s why you have two ears
but only one mouth talking too much is a common flaw of insecure freelancers and
job seekers and it’s understandable you want to show how much you know but as I
said before you have to fit this specific project and you’ll only know
how that’s true or even if it’s true by hearing and understanding what the
project is all about third once you get the message mirror it back to the client
that shows that you’re listening and it gives them a chance to correct any
misunderstandings so those are the methods but most importantly act
appropriately to the situation and to the clients culture at all times now
that’s tough because there are so many ways to be inappropriate you might be
too familiar or too formal maybe you accidentally go over someone’s head or
too harshly criticized the work of a staff member or maybe you’re too careful
and fail to provide criticism where it’s expected the fact is that behavior
varies not only from country to country but from company to company and even
from department to department within a company the good news is that experience
will make you better at feeling these things out and knowing when to ask the
client for guidance in the meantime you can ask around to see if you know people
who have worked there or you can often get clues about a company’s business
culture from its website in corporate materials but assuming you can negotiate
the tricky parts of client communication your value comes down to the quality of
the work itself just as a skillful expert is incomplete without good client
skills clients have no use for good communicators who can’t do the work there’s no such thing as objectively
good work it’s only good according to how well it fills a need that theme
permeates your drive to deliver quality work and it’s your client who determines
that your work is quality here are some ways to not only do the work well but to
help them see that the work was done well I take steps that follow the old
saying tell them what you’re gonna do then do it then tell them what you just
did or in other words confirm the task deliver the goods and review what
happened let’s start with confirmation it’s not just a one-time thing you’ll
have to keep asserting your understanding throughout the project
whenever you get new information from the client confirm not only what it is
but how it’ll be incorporated into the project and when they’ll see the results
then comes the second step which is the biggest deliver the work but there’s
more to it than that the delivery has to fit their expectations according to the
six traditional questions who what why when where and how first is who are you
delivering the work to the right person if you’re not sure confirm it next is
what are you delivering what they asked for this should be spelled out in your
agreement then is why aside from what’s in the agreement does the product
satisfy the reason you were hired in the first place
is anything else needed to make the product of your work truly useful the
questions of where how and when should also be answered in the agreement do
they want a printed copy a digital version both or something else does a
physical object need to be delivered the more your delivery matches their
expectations the more likely they’ll be satisfied and that they’ll look forward
to hiring you again so that takes us through the confirm and deliver phases
now for the review even if you think all the work is done you need to make sure
that the client is satisfied if they are then give them the satisfaction of
closure by letting them declare it done if they’re not satisfied sincerely
listen to their concerns and review the project’s details but let’s assume that
everything went well while there’s good feeling between you
take this moment to ask them to memorialize that with an endorsement
that reminds them of how satisfied they were while also giving you a powerful
tool for marketing your services to others if there’s one message I hope you get
from this course it’s that people are what count and your professional
relationships will ultimately be a big part of how you grow your business
people you know can help you land other work through two mechanisms referrals
and recommendations will start with recommendations there are a few kinds
available the weakest is the unsourced quote this is where someone says
something good about your work but doesn’t give permission to include their
identity the better kind is the sourced quote where the person cited has
confirmed that it’s okay to give his or her name position and organization
between these two is what we can call a semi sourced quote I found you get those
when it’s okay to use the person’s name but the company doesn’t want their name
used in that case you can substitute the company name with a descriptor such as a
large telecommunications company best of all though is the active reference this
is when someone agrees to not only provide a sourced quote but also to talk
with your prospective clients one-on-one in practice it’s fairly rare that you’ll
need that service but it’s good to know that you have someone to turn to when
you do now if you do get someone who’s willing to do this don’t ever send the
prospective client to them until you’ve contacted the reference to give them a
heads-up now that’ll give you a chance to brief your reference about this
prospective client so they’ll know exactly what they should talk about you
might also have recommendations on a social media site such as LinkedIn com
if you do ask the person who wrote it if you’re allowed to copy it over to your
own site that brings us to referrals a referral is sort of like a
recommendation except it’s written by someone who connects you directly with a
prospective client the best kind is where they offer to introduce you to
each other usually by sending an email to both of you if they’re not willing to
do that it’s still valuable to ask them whether they know of other people who
could use your services then you can follow up on those referral to yourself
the easiest time to ask for a referral is when you’ve had a good relationship
with someone but now for some reason it has to end
for example if the person’s getting a new job or the company decides not to
use freelancers anymore then your contact will usually be happy to help
you out after all they might need your help sometime if you have good
relationships recommendations and referrals will come naturally and you’ll
be happy to give them out as well you one problem with freelancing is that it
doesn’t scale you have a limited inventory of hours for the week and when
they’re gone they’re gone there are a few ways you can increase your available
hours hire an assistant someone who works for you hire an associate someone
who works with you or team up with a partner another company or person to
better both of your businesses these are the terms we’ll be using to describe the
ways you can increase your hours let’s look at each of them first the assistant
the point here is to offload the stuff that someone else can do and pay that
person less than you’ll make in the time it would have taken you to do it the
problem is that there’s a big gap between needing that person and getting
benefits from their work there’s a time investment to onboard and manage that
person but you can figure out whether it’s worth it you’ll find yourself
losing money in the first few weeks while you train that person but
eventually the benefits of having an assistant should outweigh that
investment and ultimately it should be good for your business hiring an
associate requires a similar cost of benefit calculation so rather than
repeat that exercise let’s talk generally about the benefits and
detriments the big benefit is that an associate who produces billable work
increases the amount of money you can make and the increase is effectively
unlimited when you have more work to Bill you just add more people it’s easy
to forget about the other advantages of taking on an associate though namely
that it’s a different person from you with different skills giving the two of
you a range that neither possesses alone and that person can act as a reality
check whenever you make a decision now on the downside you’ll have to oversee
every person you add both to manage their work and to check their results
you’ll have to accept that you’ll lose control over the details as their work
style won’t be the same as yours and if they screw up as the boss you’ll bear
the penalties that brings us to partnerships were you and another
business decide to team up to expand your offerings pool resources or
otherwise improve your businesses you maintain your own business but
collaborate where makes sense like hiring an associate you
gain added skills and capabilities along with that important reality check you’ll
probably also gain a structure that’s more like a corporation which can give
you economies of scale and make you more attractive to large clients now on the
other hand partnerships usually require unique specific agreements that can be a
real pain to draft and once signed you’ll have to trust each other to honor
and understand all the clauses having a more corporate structure can introduce
headaches and in the end you might add a lot of overhead without actually
improving your businesses but I hope the specter of such detriments doesn’t turn
you off to the possibilities of pairing up with complementary businesses or
taking on assistants or associates as with everything else you just have to
balance the costs and the benefits and then act according to what’s best for
your situation you’ve probably heard the phrase make
money in your sleep doesn’t it sound wonderful the idea behind it is that you
can have an income even when you’re not actively working as a freelancer there
are a few ways you can develop such so-called passive income all require an
initial investment of time followed by slow earnings
however those earnings can go on for years ultimately adding up to more than
you would have made by selling those initial hours to a client the first type
of income is one I know and love well royalties these are most common among
book authors although actors and some other kinds of creative artists also
have forms of royalty income here’s how they work the author agrees to write a
book in exchange for royalties rather than a set payment of say $10,000 let’s
say the author earns $2.00 per book sold the publisher usually provides an
advance payment against those royalties let’s say it’s $4,000 then the book
starts selling the author earns nothing for the first 2,000 copies sold because
those royalties are paying off that $4,000 advance payment but from then on
the author makes $2 for every book sold if 8,000 more copies fly off the shelves
the author walks away with a total of $20,000 twice as much as the set payment
would have been but if no more copies sell the author walks away with a mere
$4,000 so it’s a gamble but with that risk comes the potential for much bigger
earnings another kind of passive income comes from affiliate and resale programs
in these you’re essentially becoming a salesperson for other companies in
exchange for payments known as commissions the offline version is well
known and includes sales of such things as insurance and cosmetics now the
online version is similar except that the sales take place on your website
rather than in your home or office for an online affiliate program you first
sign up with a merchant then put their specially coded links and ads on your
website if a visitor clicks on one of those links and fulfills an action
that’s valuable to the merchant you get paid
desire action isn’t always a sale sometimes you get paid when your visitor
simply fills out a form or merely clicks a link there are many ways to find
affiliate programs some sites run their own such as amazon.com do a search for
the word affiliate on a specific site to find out whether they have such a
program smaller sites often run their affiliate programs through a third party
the biggest of these is commission junction at CJ com there are also
directories and reviews of such programs for example at affiliate programs comm
you’ll quickly see that program quality varies widely as with any other place
where promises of easy money abound the affiliate world attracts some pretty
unsavory characters making empty promises and harming your reputation so
do your research and beware the temptation to stretch yourself too thin
with affiliate programs it’s better to join one program that you can promote
well than to join a thousand that just sit there and do nothing when done right
affiliate programs complement and multiply your other online efforts but
that only happens when they’re relevant to other areas of business my own
recommendation is to build your other business first and then seek out passive
income I make a decent living from royalties and affiliate earnings but
that would never have happened if I hadn’t first made a name for myself
earning money the old-fashioned way handled right though passive income can
supplement and even surpassed the money you make by selling hourly services it’s rare that a freelance career
remains the same for long that’s one of its great joys because you’re always
opening up new and unexpected opportunities but it’s also a burden
because you have to be ready to adapt to changes in the market your industry and
your own situation some of these changes are minors such as
learning a new piece of technology but others require a deeper examination of
your core business let’s look at some of the reasons you might change your focus
first events in the market might make your current offerings less attractive
that could be because of something local like the appearance of a strong
competitor or it could be because of something bigger like a depressed
economy that makes it hard for prospective clients to afford you
related to that are changes in your industry likewise any layout artist who
used only 1990s era software and refused to learn anything else probably went out
of business years ago but reasons for a change in focus aren’t always so
negative you might uncover an opportunity that’s
just too attractive to ignore even if that means abandoning your old line of
work finally you might have personal reasons for changing focus perhaps
because doing so will be better for your health or let you work more closely with
people you admire or maybe just because it would be more fun whatever the
reasons for a change a main key to making the transition is to figure out
what you can use from your current practice even if the new focus is
completely unrelated to your current one chances are they’ll have systems
procedures and even colleagues and clients in common although it can be
hard to change gears once you get started remember that a change of focus
can be a sign that your goals are flexible and that you’re willing to meet
new challenges although haphazard changes in direction
can SAP your strength well-planned ones can lead to greater success you

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