How to grow your freelance business: Three editors share their financial strategies
By Dorothy Hernandez
While freelancers have their own reasons for forging their own paths, the reasons are variations on the same themes: autonomy and freedom.
But keeping track of business finances, getting an accountant and marketing yourself can quickly dash those dreams of escaping the 9-to-5 grind and cube farms. That is a full-time job in itself before you even get to the editing part.
At the Financial Strategies to Grow Your Freelance Business session Friday, held at the 2018 ACES national conference, freelance editors Melanie Padgett Powers, Michelle Lowery and Sea Chapman shared their experiences on how to grow and prosper as a freelance editor.
Powers led her portion of the session by polling the audience: Who is a freelancer?
More than half the audience raised their hands.
“Congratulations, you’re a small business owner,” said Powers, a D.C.-based writer and an editor who mainly edits for membership associations.
“You’re not just a freelancer. The mindset that you own a business is very important,” she said.
“This is our livelihood; this is our dream. I never want to be an employee again. I love what I do and want to be in this for the long haul,” she said.
Fill 7 You’re not just a freelancer. You’re a small business owner. That mindset is very important.
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Instituting smart business strategies gains you time, Powers said. She discussed opportunity cost, an economics concept she learned from her dad, a retired social studies teacher.
She gave the example of the choice of what to do in an evening: stay home and read a good book or go out to the movies.
If you decide to go to the movies, she said, the opportunity cost is the money spent going to the movies. If you picked the staying-in option, the cost was time spent reading the book. Depending on which route you chose, you can never gain that time or money back.
That applies to your freelance business and your goals. Powers said her goal is to create an efficient freelance business that maximizes the amount of money she can earn in the small amount of time.
One way to maximize your time is to consider outsourcing.
Some ideas:
- Virtual assistant
- Indexer, transcriptionist
- Social media manager
- House cleaning/yard maintenance (the best gift she gave to herself was to get a house cleaner because she reclaimed her time, she said)
- Grocery/meal delivery/Amazon Prime (saves the back and forth of making a list, going to Target, forgetting something, going to CVS, etc.)
One of the biggest takeaways of her portion was the advice on creating your own solo business retreat. Companies go on retreat, and so can you.
At your business retreat, you should:
- Make a list of tasks you dislike and/or that waste your time. Consider who/what you can hire to do these tasks.
- Create or re-evaluate your business plan. Think big and strategic. Where do you want your business to go?
- Rate, then rank your clients. Who will stay, who will go? What type of work do you want to pursue more of?
- Create your No. 1 business goal. All clients/projects should lead back to the goal (and if they don’t, have a good reason why it doesn’t).
Lowery then discussed how to decide whether to diversify or specialize.
“Always do your due diligence before making changes to your business, to make sure you’re doing what’s right for you,” said Lowery, a digital content editor based in San Antonio, Texas.
Fill 7 Offering more services can mean more work, which may sound daunting to an already-maxed-out freelancer. But it can be done.
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More services can mean more revenue, which sounds daunting to the already-maxed out freelance editor, but Lowery said it could be done without going crazy or having to clone yourself. When it comes to specializing, paring down on the workload could mean more money, she said.
To decide whether you want to diversity or specialize, you should:
- Take inventory of your current skills, whether you think they apply to your business or not. Don’t leave anything out.
- Make a list of things you’d like to do and/or services you’d like to offer.
- Decide which of your current skills you want to add to your services, and which services will be most lucrative.
- Consider getting experience or training for services you want to offer that don’t match up with your current skills.
- Decide whether you can add services by subcontracting or partnering with a colleague instead.
- Start out by specializing to establish yourself and gain a foothold in our chosen area of practice.
- Ask yourself whether you should specialize and why.
- Determine how you can specialize to do less work yet earn more money.
Diversifying or specializing won’t matter if your website isn’t SEO-friendly. SEO can have a direct impact on your ability to generate revenue and make a living as a freelance editor, and it can be the key to open a door that stands between you and clients and revenue, she said.
Clients “can’t hire you if they can’t find you,” she said.
Sea Chapman rounded out the presentation with her piece titled “Rates, Rates, the Great Debate.”
Things to think about when setting rates and hiring contractors:
- Rates x hours worked = gross income (business income)
- Gross income – business expenses = profit
- Profit – taxes = net income (personal income)
- Consult an accountant and create a financial strategy for your business.
- Find a bookkeeping and cash flow system that feels intuitive and thorough.
- Market research matters. Know your direct competition as well as your ideal customer.
- Hiring contractors ensures that you present your services in the best way.
- Separate your business accounts from your personal accounts. Maintain a minimum amount of business capital that will pay for branding, marketing and training.
“You are worth every penny. Do not sell yourself short. Own that,” Chapman said.
HEADER PHOTO: Melanie Padgett Powers speaks during her ACES session on April 27 at the Palmer House in Chicago. Photo by Emily Bowers/ONA-USFSP
