Here's a blog post I just came across while waiting for a return phone call. I drafted it a while back but somehow never got around to posting it. Enjoy.
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A year ago, I took a plunge into the world of small business ownership without having one realistic clue what was going to happen. From a work-life perspective, I had idealistic visions of part-time work from home, casual dress every day, time to walk my dog on my lunch hour, evenings free for family time and a weekly working log of 90 percent billable hours.
What was I thinking?!
Not only have all of those dreamy visions crashed to the grass with a heavy thud, I have also learned a few lessons about how to run a business in the meantime. Do you run a business? I’d love to hear what lessons you have learned as well. Or, have you ever dreamed of owning a business or working from home? Hope these little insights can factor into your decision in some small way. (It’s just my two cents, after all.)
So here goes.
One year of freelancing: Lessons learned
1. Not everyone will pay you. This has been the most frustrating lesson, I think. Who would have thought that in one year, I would have two clients either completely ignore my invoices (for three projects) for completed work, or only bother to pay them several months late…without the late fee. I have been tempted to share these clients’ names in my blog to see if that would spark a fire under their checkbook-writing hands, but so far I have resisted. That wouldn’t be professional. But it’s tempting.
2. Always under-budget. I had this idealistic number in my head for the amount of money I had hoped to make in my first year. It was based on something like 20 hours of billable time per week, with about four hours, max, of time each week spent doing non-billable things. (Wonder what I could possibly be doing? See my blog entry, "Where does the time go?") What I didn’t realize was how much time I would spend – especially in getting my business off the ground – doing things for free. That is, there were several weeks when I was doing 50 percent or more of my work without being able to bill anyone for them. As an ugly result, my income came in significantly under what I expected. It’s a good thing I had under-budgeted for our personal finances. But still, I didn’t under-budget enough, I don’t think.
3. It costs a lot more than just paper and ink to run a business. I read a book, The Well-fed Writer by Peter Bowerman, in which the author – a freelance corporate writer himself – suggests that the only costs required for this line of work is a computer (which he assumed everyone has already), notebook paper, computer paper, file folders and pens. Well, there’s a heck of a lot more to it than that, especially when you add photography and graphic design to the mix! Think several-thousand-dollar, high-end computer; several-hundred-dollar, high-end graphics software; thousand-dollar, high-end camera (which, thankfully, I had already, but I’ll eventually have to replace); color laser printer and a few hundred dollars worth of toner; fonts for design projects; professional memberships; accountant fees; printing fees; meals and meeting fees; parking fees; gas; travel and conference fees (if you’re lucky enough to be able to afford to go…I’m not, yet)…and then you can add your supplies. I spent nearly $1,500 on supplies alone last year.
4. Never, ever, under any circumstances, burn bridges. I had visions of having lots of clients covering lots of different industries and non-profits in Indianapolis, but the reality is, my three former employers make up more than 75 percent of my business. About 20 percent of the remaining business is someone with whom I worked closely at one of my former jobs. Only the last five percent are those new companies with whom I had not previously had any contact. If I had burned bridges anywhere along my career path, I would not be able to be doing this job today. There were a handful of opportunities when it would have been easier to speak my mind and shout out some inappropriate comments at those former jobs. (I loved my jobs, but everyone gets frustrated sometimes.) But I held my tongue, behaved politely and professionally, and have very positive relationships with all of those clients now.
5. Focus, focus, focus. If you’re going to work at home, a nice pair of blinders would come in handy. There are potentially dozens of distractions at every single minute of every day. I have to be able to tune them out, ignore them and keep my focus on my work if I’m going to meet deadlines and keep my clients happy. I have four animals who need fed, petted and let out to potty. There are mounds of laundry in the house at every given moment. And Dr. Phil, Ellen and the news are just a remote-control click away. No one’s here to see me take a TV break. But no one will pay me for taking a TV, laundry or doggy break, either. So I have to keep chugging.
6. Have a bank that’s close to home. Years ago, I started banking with a credit union in Avon. It worked wonderfully when I had direct deposit. Now, I get a check and make a trip into town to deposit it. Two days later I might get another one, and even though I just made the 21.7-mile round trip to the bank, I feel the need to see that money in my online account summary immediately, so I’ll drive in again. Granted, I typically do this “after hours,” but it’s still a healthy chunk of time. I haven’t made the switch to a Danville bank yet. I have good intentions.
7. Ask for what you’re worth. I know that freelancers in my area charge anywhere from $75 (average, some newer writers charge $50) to $125 per hour for doing the same kind of work I do. I charge less than that. Significantly less than that. And I’m paying for it. It was a strategic move at first. I knew it would be an attractive price to people who have outsourced before. And I know that it earned me some clients. The problem now is, I am realizing how much it costs to run this business — and how many hours are non-billable — and I’m losing money before I have it. I know I need to charge more. But now, making the leap from the current rate to a more reasonable rate is an uncomfortable move for me —and my clients. I just haven’t gotten up the courage to do that yet. It would perhaps have been smarter to earn the clients slowly but get what I’m worth from the get-go. Of course, then we would have been in some deep water soon after I quit my full-time traditional job and dove head-first into freelancing.
8. Be thankful. As many stressors as there are with this working lifestyle, it’s a pretty lucky thing to be able to live it. I know that. It’s important to be thankful for those who have helped you get to where you are. Without the support of my family, I wouldn’t be here. I would have cracked long ago, I think. But my husband, especially, never once doubted that I could do it (or at least he never let on). He was behind me 100 percent, reminding me constantly that I made the right decision to start this business. So were my mom, dad, stepmom, mother-in-law, aunt, uncle, sisters and friends. Let people know you’re thankful. I don’t show this as much as I feel it. I am constantly aware of this. I know I don’t tell them enough. (Chad, Mom, Dad, the Anitas (both of you), Erin, Margo, Michele, John, Colette, Alyssa…thank you.)
Every once-in-a-while the magazines would host a contest/drawing and give away some sort of rare 
