Successful authors usually have one thing in common: they know a thing or two about marketing.
And you certainly don’t need a degree in marketing to be a savvy marketer of your books.
In this article, I’m going to introduce you to a strategy that is not only relatively easy to set up, but also requires little effort to maintain, and can help boost your book sales substantially.
Companies and brands all over the world use this simple strategy to increase their sales. [Read more…]
As a freelancer, you probably spend a disproportionate amount of time thinking about your income. You might wonder how long your current client base will stick around, crave a higher overall revenue stream, or worry that you aren’t making enough money to retire.
One of the best ways to address these concerns is to diversify your income stream and supplement your income with other sources. How can you accomplish it? [Read more…]
The benefits of being your own boss outweigh the advantages of working a 9 to 5 job – we’ve already established that. Sometimes, though, we might forget that there are certain responsibilities attached to being a freelancer. For sure, we KNOW these responsibilities are there, but especially for those new to the freelance business, little things might slip by you every now and then.
When it comes to taxes, the need to track your income is paramount. After all, how will you be able to declare your income and compute taxes accurately if you do not follow some one system or another?
This post is the result of a comment I saw on some forum regarding one woman talking about a client who forgot to send in his 1099 before tax time. As a result, she forgot to declare that as part of her income. The job was a one-time deal done at the beginning of the previous year, explaining the lapse. For many freelancers, one-time deals are not that uncommon, and if you are not careful, you might find yourself facing a similar situation as the one I just described.
You may be thinking, so what? Well, this just might bite you in the butt later on, when the IRS sends you a revised tax statement. If it’s a small job and it’s just one, then no worries. However, if you neglect to declare a considerable amount (or several jobs amounting to a lot of money), then you’ll end up having to pay maybe several hundreds more.
So how do you track your income?
Obviously, this depends on your personal preference. I suggest keeping separate files for different items such as receipts, bank statements, invoices, etc. Whether you use a box, a filing cabinet, an expandable folder, an Excel file, or some other software, it doesn’t matter. The bottom line is that your filing system will help you NOT to overlook any income that you make so that when you declare your taxes, you can be as error-free as possible.
FWJ readers, care to share your income tracking system with us?
Good News! Maybe.
Another writer I know mentioned that she landed a sweet little gig. The client paid her at or above market rate for a series of five articles that were right up her alley.
Good news, right?
Maybe. Maybe not. We may never know.
What You Don’t Know Might Hurt You (or Your Income)
Here’s why:
The client approached her on a referral. They exchanged a few emails about the job before they finalized the arrangements.
And that’s where she may have screwed up.
She didn’t ask enough questions about how the client was planning to actually use the material. She knew that they’re offering a new service, but she didn’t ask them about how they were doing it. She doesn’t know if they had a blogging plan in place. She doesn”t know if the articles were going to be used as top-level site content, backfill or for article marketing or guest posting purposes. She’s not sure if they’re building a list and, if they are, what they’re using as an inducement (if anything). She doesn’t know how aggressively they’re approaching SEO concerns.
You get the idea…
She knew about the project specs. She wrote the articles. The client liked them. The end.
She doesn’t know how much money and work she may have left behind, though.
Multiplying Projects
If you’re asking the right questions, you’re opening doors to additional opportunities.
Those five articles may have turned into ten articles, some additional web content, a better squeeze page, a white paper or special report for list building, a regular blogging gig, assistance in constructing additional content for inbound link creation and who-knows-what-else.
Those questions are business multipliers.
Plus, they have a fantastic upside even if the client really doesn’t need a hand with anything other than the base assignment. When you know the answers to all of those other questions, you have a better idea of how your work will fit into the bigger picture. That allows you to produce the best possible work, which is always a good idea.
An Example
Someone approached me about helping with the editing of a business plan. We talk. She didn’t have anyone to write a letter or brochure to go along with the plan to the prospective investors. She didn’t plan to create a web presence to aid in the project.
I asked questions. Now she has a copywriter on board. A great little interactive WordPress-driven website that will feature key information about her project along with some video and plenty of visuals is on its way. She be able to direct people to the site as well as asking them to read through the paper materials. She has a contained social media presence to help her out, too.
That’s good news for me. More importantly, it’s good news for her. Everything I’m offering will undoubtedly help her with this project. I can’t share the details here, but I can tell you that this is a “perfect fit” situation.
That little “help me with this business plan” request has turned into a mutually beneficial working relationship.
What about You?
That’s just an example. You might not be interested in some aspects of projects. You may not do the training and consulting thing. I understand completely. However, I do think everyone can benefit when people actually take the time to discuss the bigger picture and the way its component parts are working instead of having insulated conversations about discrete elements.
So, are you multiplying your business or are you taking it as it comes?
If you’ve had a positive experience after taking an extra step to get a wider understanding of a project, feel free to share it. I have a feeling that a number of people have turned small assignments into big money because they dug a little deeper.
Hooray! A check from a client came in. Now what? Do you stick it in your personal bank account where it mingles with your part-time job income and your spouse’s direct deposit? If so, you might be making your life needlessly harder when it comes to keeping your freelancer finances straight. A couple of weeks ago I wrote about all the fine tax deductions freelancers like you and me get to take at tax time. But be warned, those nifty little deductions can get lost among payments to the grocery store, the vet, and Uncle Hal’s Hardware and Bait Shop. And don’t get me started on visits to the office supply store. When you’re doing your taxes a year later, it’s impossible to remember whether that September 1st trip to Staples was to buy your printer cartridges or your munchkin’s school supplies.
The obvious solution to this headache? A second bank account, devoted solely to your freelancing income. But not so fast, there are pros and cons to opening a second bank account solely for your freelancing income.
The biggest advantage of a business account is peace of mind at tax time. Deposit all of your income into the account, pay all of your expenses out of the account, and your neat and orderly bank statements are your accountant’s dream at the end of the year. There’s no need to worry about accidentally deducting a personal expense and ending up with egg on your face (and no eggs in your fridge) in case of an audit. And there’s no chance of you forgetting a tax deduction because a business expenses got mixed in with your household purchases.
If you want to keep your financial life neat, simple, and uncomplicated. Then opening a second checking account for your freelancing income and expenses may be for you.
Have you deposited a paper check lately? Then you know that you sometimes have to wait a day or more for newly deposited funds to become available. I think we all remember the days of waiting impatiently for a check to clear. If you open a business bank account, you might put yourself through this irritation twice – once when the check clears in your business account, then once when transferring your funds from your business account to your personal account. Not to mention, many banks charge fees for everything. When opening a second bank account, you may end up nickel and diming yourself out of your profits.
Besides, who wants to balance two checking accounts at the end of the month? Some tax pros, like June Walker the well-known accountant to indies, say Schedule C-ers (us unincorporated folks) have no need of a separate bank account as long as we keep our financial house in order. June gives the example of a freelancer buying groceries. Some of the food is for the family, while some is for a client who’s coming to dinner. The ingredients used in client’s risotto are tax deductible, while the munchkins’ Teddy Grams are not. Does she pay with her business account or her personal account? (Or does she drive the clerk nuts by separating her groceries into piles?) A simple visit to the grocery store becomes a hair-tearing experience when a freelancer tries to use two accounts.
If you feel confident that you can keep track of your freelancing income and expenses, then you may not need to bother with a dedicated bank account for your business.
A final note: If you are incorporated and commingle your business and personal funds, you could be in big trouble come lawsuit or audit time. Check with your accountant about your options as an S-Corp, LLC or other incorporated entity.
Jennifer Escalona is not an accountant, nor does she play one on TV. Be sure to consult your financial pro before making important financial decisions about your business.
