Freelancing: Freelance Hints, Tips & Strategies by Michelle L Devon

Let’s Talk Freelancing!

Some of you, particularly those of you who are members of my forum as well as reading me on my blogs, know I’ve been battling my health for the last two years or so, and particularly so this last year.

Well, today I want to talk about health insurance as a freelancer.

When you quit working or are not working and then you start freelancing, you will be self-employed, and that means, unless you’re lucky enough to be married to someone who has good insurance, you’re without health insurance and you will have to go self-pay or get your own insurance.

Sure, if you’re young and healthy, you’re thinking nothing bad can happen to you, and there’s no need, but let me tell you something…. I was relatively young and thought I was healthy when I quit the corporate world back in 2003 to freelance full time instead of part time on the side, and since then, my health has deteriorated very quickly. Unfortunately, it happened at a time I was without insurance, planning to get some soon but never quite thinking I could afford it. That makes most of what I deal with now a pre-existing condition and it’s very expensive to insure someone with existing health problems.

Get insurance.

I can’t stress it enough. You can go a few months to a year without it, a gamble, but for sure by that time you’d better have insurance, and you best take really good care of your health during the time you’re without - and if you can help it, try to avoid the doctor diagnosing you with ANYTHING other than a common cold while you are uninsured, to avoid a pre-existing condition when you do get insurance.

Don’t think it can’t happen to you. Don’t think you’re too young (the things wrong with me usually don’t happen to people my age, but here I am dealing with them), and don’t think you’re invincible.

You’re not. No one is.

Get insured, and get that way as quickly as possible.

Now, as for health. It’s easy when freelancing from home to work long hours, particularly if you are just getting started or you really love what you do. Working 10 plus hours per day as many freelancers do, and particularly so if you’re sitting and not moving around much….  Get up and move your body. Stretch and walk around the house at least once per hour and take a walk around the block now and then.

Eat properly and eat well… it’s easy to snack on junk while working and your brain not actively be aware you’re doing it. Plan balanced and nutritious meals and keep easy to fix and eat healthy snacks, not junk.

Carpal tunnel and repetitive stress disorders are common with those who type and work at a computer a lot. Buy quality items, like keyboards and mouses, that will reduce strain and then again, stretch and move your fingers and hands regularly to avoid pain and discomfort.

Rest your eyes and wear anti-reflective computer glasses when working at the computer. Set the screen for the lowest brightness you can stand without having to strain to see the screen. Put the screen at the right height so you are looking directly at it or slightly up at it and not downward. Position your chair properly and sit properly in the chair when working.

Take breaks. Not only will you feel better, but you’ll probably do better work if you’re rested and take a few breaks now and then.

Freelancing from home is often solitary as well as sedentary, so be sure to find an outlet for social interaction. If you have kids, do things with them, plan family time. Be sure not to neglect a spouse, partner, significant other. If you’re single and live alone, try to avoid the hermit-syndrome and hole yourself up for days at a time with no social interaction. Remember, one of the reasons you’re probably freelancing is so that you are working for income, not living to work.

Join forums with other freelancers and network. At the very least, socialize with those going through the same things. Don’t allow yourself to sit alone, day in and day out, just working, or work can become a negative thing that isolates and is depressing. It would be a shame to lose your passion for it simply because you isolated yourself. Take the time to do things outside, with people.

Take care of yourself first, because when it comes right down to it, when you’re sick, or worse - dead - you aren’t going to be able to work. Health comes first; then working.

Sorry if this sounds preachy or whatever… but trust me, as I sit here feeling like I do today, looking at my foot, clenching my teeth from the pain, debating whether I should take a nap or try to force through it and work, while thinking of the pile of medical bills that insurance is not going to pay - well, maybe my situation can help you protect yourself too.

Take care of you, get insurance, socialize…. and THEN happy freelancing!

Love and stuff,
Michy

  Let’s talk freelancing!

Before you begin freelancing, or providing any services to a client, you want to prepare your business, so you can focus on the work and not the behind the scenes paperwork. There are a few things you’re going to want to set up before you start doing any freelance work. Let’s look at a few of them you should consider today.

Business Cards

To be honest, I have never needed business cards while freelancing, since the majority of the work I do is via email, phone or snail mail. If you are going to be meeting people in person though, a nice, professional, simple business card is a great thing to have, to give to the potential client at the end of your meeting with them. Generally speaking, a simple, plain business card is best - but as soon as I say that, someone will point out a fancy business card some big business or corporation has. Well, sure, if they are a huge corporation with an existing reputation, a cute, funny, colorful, silly business card might work, but for a new freelancer, it just might make you look unprofessional.

Business cards don’t have to be expensive. You can even get some for free. I wrote an article about inexpensive and free business cards here, if you’re looking for professional business cards without breaking your budget.

Invoices

When I first started freelancing online, I never considered I’d need invoices, but several of my clients asked me to invoice them., particularly when working with a business and not an individual, because they need invoices to get the payment processed through their accounts payable department. You can find free invoices online, particularly if you have MS Word. Go to Microsoft’s Office website and  search for invoice templates. You’ll find them in both Word and Excel. Pick one you like, tweak it to make it personalized for your business, and you’re good to go. These can be printed and mailed or they can be attached to an email. You can also send invoices via PayPal.

PayPal Account/Bank Account

You’ll need a way to both send and receive payments online without compromising your or your client’s privacy. PayPal is the most common form of payment online, though there are other merchant account processors. A merchant account is simply a special account set up with a third party to allow you to receive payments via credit card and bank transfers. If you use a merchant account no one has heard of, you may end up with client hesitant to pay you.

Starting a PayPal account is a great idea, since it is likely one of the most used merchant accounts online, and people either love or hate it, but overall, they seem to trust the PayPal logo. You’ll want to go ahead and upgrade to a premier or business account, otherwise you’ll be limited on credit card payments and a few other things. Yes, there’s a fee for business accounts, but that fee is deductible, and it is likely less expensive than paying a monthly fee for a credit card processing merchant account.

You’ll need a bank account to associate with your PayPal account, and it’s best if you set up a small business account with your bank. This is super easy to do if you have set up an EIN for your business . Just print out the application confirmation with your EIN number on it or take the certificate the IRS sends you in the mail, and it’s easy to get a business bank account. This allows you to deposit and cash checks made out to your name, any principal’s name for your business, and made out to the business name.

Create Logs (Excel?)

You’re going to be signing up for certain websites, services, programs and such to facilitate your freelance career, so you need to find a place to log all your passwords, usernames, account numbers, and other information required to access these accounts. I know many of you will think that your browser, such as Firefox or IE, will store this for you, but if anything happens to your computer, you’ll be super glad you have this log somewhere in hard copy. Keep it safely stored somewhere away from your computer so no one can hack into your computer easily, but be sure to pull it out often and update it with new sites or services to which you subscribe. Later in this blog, when I talk about promoting your business, you’ll be signing up for even more services, so this really is more important than you think.

Hardware/Software

I would highly recommend you get a copy of MS Word, at the very least. While it’s not required, it is still primarily the standard, and somewhat universally used. If your client is using MS Word, you’ll need to be able to format and such in Word to return things to them. OpenOffice.org has a comprable open source program, and I do highly recommend it for most things, except editing using the editing tools, if you’re looking to save some money. OpenOffice is a free program, and there are other MS comparable programs available through them.

I guess it goes without saying that you’ll need a computer and an email program of some sort, and of course, an email address. It is best to use a domain address of even get your own website from a place like GoDaddy.com or some other domain providers, preferably one that matches your business so you can later make a company website (all businesses need some sort of web presence!), and use that email address instead of using a free email provider, like Yahoo!, Hotmail, AOL, etc. If you absolutely must use a free email service, I highly recommend Google’s Gmail. It has one of the best spam filters built in I’ve ever used, and it also allows POP3 and IMAP access to get your email in Outlook or some other program (Like Mozilla’s Thunderbird), and also email forwarding. Free email addresses just look a bit cheesey and unprofessional when compared to a domain mail’s email address.

When you can afford it, you’re going to want to buy an external harddrive or a tape drive to back up your computer. Please don’t neglect this. Buy one as soon as you can afford to do so, because if you do lose your computer for any reason, the cost of having purchased the backup drive is neglible compared to the cost of losing everything… everything! Your computer will likely BE your business. Protect it! It could take weeks or even months to recover, and you might never recover everything!

If you can’t afford an external hard drive yet, I suggest you email your work to a Gmail account or some other web-based email service with unlimited storage space, so you can keep a copy of it accessible online, from any computer.

There are likely other things you’ll want to buy or prepare for your business, depending on what type of freelance business you plan to do, but I feel these small things are the biggest things you can do for preparing for your freelance business.

Keep it Cheap

You don’t really need a lot of money to do all this though. Until your business starts making money, there’s not a big reason to send a lot of money upfront. I built my freelancing business in a shoestring budget - nah, more like a nonexistent budget. I was a single mom with two kids living at home, trying to pay a mortgage and a car payment and pinching every penny when I started freelancing.

I let one client’s payment pay for the next thing I needed to take on a bigger client, or a bigger job, or purchase a subscription service for a bid site, or whatever… so don’t think you need a ton of working capital to start a freelance business. You don’t! This is particularly true if you are going to start freelancing part time while maintaining a full-time job. Plus,it’s much more encouraging when you start turning a profit freelancing as quickly as you can, instead of having to wait to make a profit until you make up all the money you’ve invested.

For me, that’s part of the beauty of freelancing services–you don’t have to pay a lot of start up costs; all you have to do is just start working, and then get the equipment you need as you go. For example, I used to freelance transcription work. I found a free transcription software online that let me use the F keys as hotkeys for pause, rewind, etc, and even let me play back at a reduced speed. Until I could afford to buy a good pair of headphones, I would listen to the audio to transcribe over my regular computer speakers. While not ideal, a couple of jobs that way enabled me to afford the nice headphones I wanted with noise reduction. I let my business pay for my business, because goodness knows I was too broke to do it!

You don’t have to be rich to start your own freelance business; you just have to be smart and be willing to improvise when necessary.

Okay, this post is getting to be a bit long, so I’ll leave off there, and talk some more about getting started tomorrow!

Happy Freelancing!

Love and stuff,

Michy

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  Ready to talk freelancing? Here we go!

In THIS ARTICLE, I wrote about how to protect yourself when freelancing for lots of different places.

One of the points in the article talks about how, as I mentioned in my previous post here, different places you might sign up to freelance for or with are going to require some type of taxpaying identifying number. For most individuals, this number is your social security number. They are indeed required by law to ask for this information and retain it on file if they are in or do material business in the United States. Just asking for personal information is not a sign of a scam, but it is a sign to proceed with caution, particularly if it’s a new company.

First, before you ever give your identifying information to a company, be sure to check them out. How long have they been in business? Can you contact other freelance contractors who have worked for them before and verify they are legit and not scamming folks? And most importantly, do they list full, real contact information so you can reach them - an email address and website is not enough, neither is a PO Box. You need a real phone number, full mailing/postal address and physical address and preferably a contact name as well.

Even with all this, it’s still not a great idea to go spreading around your social security number every time you sign up to work for a website or freelance a job with a company. You may think they are legit, but you never know about their security of their online servers and where they keep their database with your personal information and how secure that is.

So the better choice is to get an employer identification number, or EIN, from the IRS, and use it in place of your social security number.

An EIN is an employer identification number, and in the US, it is a legal substitute for giving your social.

Now, if you are only looking for a little part-time income, and are not planning on professionally freelancing much at all, getting an EIN might be more trouble than it’s worth. If, however, you plan to grow your business, intend on making a career out of freelancing, I suggest you get one as soon as possible.

Things to consider prior to signing up for a free EIN: An EIN makes you an ‘official’ business, and as such, you will have to file and claim the income on your taxes as self -employment, and the EIN will be treated as though you own a sole-proprietorship.

Now, the good part of that is you can take more deductions as a business than you can with just misc. income. The downside, you have to pay self-employment tax at the end of the year. If you make more than a few hundred dollars, the EIN likely benefits you more than it would cause problems, and if you don’t have a lot of business expenses, you can still take the standard deduction, but at least with the EIN, you have the choice.

Applying for an EIN is free - you can do so online through the IRS’s website at:

http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

You can either make a freelancing ‘business’ or you can choose your name or pen name as your ‘business name’.

Me, personally, I have two businesses - one is Accentuate Services, where I have an EIN under that business name. I’ve been in business since 1994 with that business name, but I used my social security number as a sole proprietorship until 2000. Prior to 2000, I worked only with people I knew and had met in person, locally. When I began to expand my freelance business and work it full time instead of part time, and started providing virtual services online, I applied for the EIN and have used it ever since.

My other ‘business’ is my writing. You see, I don’t use my real name as a writer or online. I used a registered pseudonym: Michelle L Devon. This registered pseudonym is able to be used in place of my real name for several reasons - 1) I filed a fictious name license, 2) when I applied for my second EIN with the IRS, I registered my ‘business’ name as Michelle L Devon. I use my pen name as my business name. Why? Well, Michelle L Devon is not my legal name. Because of this, when someone pays me, I would have to reveal my real name to a bunch of people to get a check I can cash or deposit at my bank.

If, however, as I did, I registered for an EIN to make my business name my pen name, then I can take that EIN paperwork to the bank and add my pen name to the signature card of my bank account and thus I am allowed to cash or deposit payments into my bank account, without having to tell any of the contract places what my legal name is, social security number, and home mailing address is - I never have to reveal my real name or information to anyone, and it’s all perfectly legal.

NOTE: some banks require a business account when you do this, some don’t. Some business accounts charge a monthly maintenance fee - just another thing to keep in mind. This maintenance fee is deductible if you itemize deductions.

If you’re worried about freelancing for someone because they are asking for your social security number, having an EIN is an easy, free way to bypass the social request, give the EIN instead, and if you are freelancing full time as your career, it may give you some tax breaks at the end of the year too.

Unlike a social security number, an EIN cannot be used by itself to establish credit, identify an individual (it only identifies a business), or to start charge accounts with vendors - all of those things require the social of the principals of the business or articles of incoproration from from a business to do that. A social security number, on the other hand, can be used for identity theft, to establish credit and charge accounts, and to identify a person. Of the two, and EIN is absolutely the safest way to go.

Keep freelancing!

Love and stuff,

Michy

PS: I didn’t start my work day until almost 4pm today. THIS is the freedom that freelancing as a career can afford you. I didn’t even have to call my boss to call in ’sick’!

Hi everyone! Ready to talk freelancing today?

There are a few things to consider prior to starting a freelance career - things like whether you want to work full time or part time as a freelancer, whether you want to work from home, what services you want to provide, etc. These things are important. I actually started my freelancing career offering administrative services, virtual assisting and the like. I later moved to bookkeeping and tax filing, which was actually quite lucrative. After that, I added audio and video transcribing. My goodness, there is a ton of money and work available in the transcription field if you can type fast and don’t mind being chained to a set of headphones all day.

Eventually, I landed an editing gig with one of the freelance bid sites (Elance.com , and yes, I’ll be talking more about bid sites as the blog progresses),  and that led me to editing some ebooks for a small publisher, who in turn referred me to a larger publisher, that publisher was impressed with my work, and that lead to another referral… and editing just became my niche. Within a year, I knew that I no longer wanted to do the administrative services, and since I was writing in my spare time on the side, I decided to combine the two, drop the adminsitrative work, and the rest, as they say, is history.

You’ll eventually find your niche too. My niche is editing and writing services for my freelancing career. I am a freelance editor and a freelance writer, and those are really the only things I do anymore. I love doing both of them, and they require different skill sets, so I never get bored. To start with, decide what you’re good at, then decide what you enjoy (not always the same thing: I was excellent at accounting and taxes but hated that line of work). You might want to start with what you’re good at, while doing what you enjoy on the side, and then slowly balance the two, then phase out the things you don’t enjoy anymore once you’re making money.

Once you’ve decided what you want to do, then you have to set about how you’re going to do it.

It is not as simple as just sitting down and working. Our world is truly a global economy, and I have worked as a contractor for people in Spain, England, Australia, India and more, not to mention people right here in the good old USA. Fortunately, as a freelancer, you don’t need to worry about the laws and taxes in these other locations, but you absolutely need to know about them in yours.

So, according to the government, what do you need to tell them about your business?

TAXES

If you plan to freelance from home, part time, and you hold down a full time job or a part time job elsewhere where you pay taxes, you really don’t have to tell the government much about your freelancing business. However, and this is very important, you absolutely must report all money earned from freelancing on your taxes. If it’s five bucks or 500,000, it must be reported. Now, the amount of money you make, how you make it, and how you are paid become important in how you report it.

I won’t get into the tax code right now, as that is something even tax professionals have trouble understanding, and I’m surely not going to give tax advice either, but the point is that you should know what your tax liabilities and responsibilities are when you start freelancing.

W9, 1099-MISC, IDENTIFYING INFORMATION

Any one business or entity in the US paying you more than 500 in one calendar year is going to be required to send you a 1099-misc for at the end of the year. They will fill out this form by requesting form you an W9. Now, some companies don’t require w9s on file, but will ask you for information the same as what is needed for a w9 and by registering for work with them, registering for their website, etc, you are agreeing to the w9 information being used.

This information will include your name, address, mailing address, account number with the company (if necessary), and some type of tax identifying number. This might include an EIN, TIN or social security number. Tomorrow’s post will talk about what each of these items are and how to choose the right one for you. For now, know that as you go about setting up work for your freelancing business, these companies do indeed have a legitimate right to ask for this information, and in fact, they are required to keep it on file for anyone making more than the threshold.

LOCAL, STATE, FEDERAL FREELANCING REGULATIONS

Another thing to consider when starting a freelance business is going to be  what the business codes are in your area, state, etc. Federally, you are not required to register your business in any way, and if you are a sole proprietor (meaning YOU are the only one to ‘own’ your business, and most freelancers are sole proprietorships, so there’s really not much to do until it comes time to file taxes at the end of the first year (and perhaps at the quarter the following year if your income is significant).

However, with states and city/muncipality codes, some places require that if you operate a business, work from home, you must register that business with your city, state or county. Mostly, this is because of zoning issues and wanting to know if there’s going to be traffic in and out during the day and such. There may be a license or a fee required to start freelancing from home as self employed. You will want to call your local officials to ask those questions before you start making significant money and building your business.

SUPPLIES, SPACE, TIME

Lastly, you want to  be sure to set aside an ‘office’ space in your home, however small it may be. I know this might not seem necessary to you, since you’re working from home, you play on the computer all the time, think it’ll all be okay, but truth is, when you start working from home full time, you are really going to want a place that is ‘work’ and a place that is ‘home’. The lines between the two WILL blur, but you’ll want a designated space just for your work items, work files, information, etc, that is separate from your home.

In the beginning, you’ll want to make a schedule and adhere to it. Once you’re in the swing of things, you can break the schedule and do whatever needs done, when it needs done, but in the beginning, especially if you’re transitioning from J-O-B to freelancing from home, the temptation to sleep in, and piddle around the house will be great. Set aside specific times to work, and specific times to play, until you get used to the new routine.

I wrote an article detailing the top five myths and truths about working from home. Give it a read, and you’ll understand exactly why I’m suggesting you make this schedule and adhere to it in the beginning.

Tomorrow, I’m going to talk a little bit about how to protect yourself when freelancing online, what to look for to show a legitimate opportunity versus a scam, and talk a bit about identification numbers and personal information when checking out freelance opportunities, so stick with me!

Everyone have a good day, and happy freelancing!

Love and stuff,

Michy