By Maureen Azzato
A month ago my niece Shannon asked me to help set her up for a freelance writing and social media marketing business. She needed to know all of the fundamentals of running her own business: how much to charge, contracts/work agreements, invoicing, tracking revenue and expenses, and the one that most new freelancers overlook – how much to put aside for taxes at the end of the year.
I realize that the tools I shared with Shannon would help any young up-and-coming professional freelancer. In my previous blog post we discussed how building expertise helps journalists command higher compensation, but what if you’ve just graduated from college and have limited experience? As a general rule, writers are paid either by the word, the piece/article or the hour. It depends on what the client and you are most comfortable.
What’s important is knowing how to value your time and production. Depending upon your experience, per word fees can range from 50 cents to $1.25, while hourly rates from $20 to $35, and three to five times that once expertise is fully established. Flat rates by the piece/article are entirely negotiable, but make sure you fully understand the scope of work before you agree to a flat rate.Social media work I would typically bill by the hour.
Once you’ve verbally agreed to take on a project, put your fee terms in writing. This can be as simple as an email spelling out the scope of the project and the agreed fee and payment terms (to which you want a reply from the client), to a more formal contract/work agreement. There are myriad samples online of freelance contract/work agreements that you can review to come up with your own template.
Here are other important start-up pointers:
- Track your revenue (invoices and payments) on a spreadsheet or use Quicken or some other similar software. Track them by the month and by client.
- Track all of your non-reimbursed and reimbursed expenses. Non-reimbursed expenses are deducted from your total revenue to determine your taxable income at the end of the year.
- Put aside anywhere from 20 to 30 percent of your revenue for taxes, depending upon your income level. As a 1099 freelancer, no taxes are deducted from your checks. Talk to your tax preparer to get a more precise figure appropriate for you.
Last week my niece called me a told me she had an outstanding meeting with a new client and felt so professional going in with all of the above items well thought out beforehand. “You saved me hours of work and stress just talking this all through with me,” she said. “Oh, and thanks for telling me that the airfare to visit the client for the day was fully deductible as a business expense!”