Speed start-up: things newbies need to know

finance | pricing | marketing

Finance for new freelances

SUE LITTLEFORD

You are now a business!

• HMRC will expect you to behave as a business

• So will your clients

Getting past the squirming

• Take out the personal element

• Don’t think of yourself as ‘just you’, operating from your kitchen table in your pyjamas

• Do think of yourself as representing your business

• People expect you to behave as a business

• Then chase that overdue payment

Getting money in

• Invoice promptly

• Follow up promptly if payment doesn’t arrive on time

• For some clients or kinds of work, invoice in instalments and get part of the money up front and/or before returning the files

• Make sure your invoices contain the necessary data

What you must include on invoices

• The word ‘invoice’, clearly displayed

• A unique ID for each invoice – consecutively numbered

• Your contact information and your customer’s

• What is being invoiced for

• Price, VAT (if any – use a VAT invoice), total due

• Date service supplied

• Date of invoice

Consider also including:

• Your payment terms (due date)

• Deadline for customer to query the invoice

• Reservation of rights to charge for late payment (for business clients only)

Invoice overdue?

• Use your records to identify exactly when each payment is due

• On the day after, email your contact to request payment

• Repeat as necessary

• Stay polite but businesslike

• Remember you can claim interest and other compensation from business clients

Her Majesty’s Revenue & Customs

HMRC has simple requirements:

• Keep your records properly

• Keep to their timetable for

completing your tax return and

paying your tax

Registering as self-employed

• Go to www.gov.uk/register-for-self-assessment

• Register, including for online services

• You’re done!

Covers self-employed status and self-assessment tax return, all in one

National Insurance is covered by the tax return

A surprise for your first yearIf the tax and NICs due total more than £1,000, then HMRC will require that you pay

• this year’s tax and National Insurance

plus

• half of next year’s ‘on account’

by 31 January (the deadline for your tax return) with the remaining half of next year’s payment on account by 31 July following

If at any point you drop below these levels, then this will restart once your tax bill rises again

HMRC help

HMRC wants you to get it right first time, so there’s

lots of help at:

• gov.uk

• live and filmed webinars

• YouTube channel

• helpsheets

• emails

• Twitter

Simplified or traditional expenses?

• Two methods of calculating your expenses

• Simplified really is – it’s much less involved

• In your first year, keep both methods in mind

• When you complete your tax return, can choose which method you use

• Pick the one that means least tax!

Business expenses

Simplified business expenses:

No difference in the allowable v non-allowable expenses definition.

But

• Includes capital expenditure in year incurred

• Working at home a flat rate in 3 bands, no need to apportion electricity, floor space, time spent, etc.

Capital Allowances

For items with a life of more than two years

If you choose ‘traditional’ accounting, be aware that there is a lot of record-keeping and calculation involved.

Type of capital allowance depends on whether you already owned the item before setting up the business, or it was a gift, or you bought it yourself for the business.

Most editorial businesses will just use the Annual Investment Allowance (max £20k spend per year)

Cash basis or traditional?

When it comes to calculating what income should be taxed, again, two methods:

• Cash basis is equivalent to the simplified expenses

• Traditional accounting, again, is more involved

• Try both, see which works in your favour

You can mix and match each of the two schemes for accounting and expenses

Record-keeping

• Record invoices raised

• Record income received – from whom, why and when

• Record money spent – when, and what on, and whether allowable or non-allowable

Statutory requirement for HMRC, plus basis for good data on how your business is doing and start of your database of work stats to help with pricing jobs

Any questions?

Pricing editorial workLIZ JONES

Pricing work – the process

Can seem like a dark art, but it’s really very simple.

• Assess information provided about the work

• Ask for more information/sample

• Use data from previous projects/colleagues/SfEP

• Work out what your work is worth

• Prepare a quote, make clear what it covers

• Prepare to negotiate

• Agree terms with client

Assess information provided

This might include the following:

• Word count

• Representative sample of text (or all the text)

• Sample design (if relevant)

• Details of any other elements to be edited

• Scope of work

• Schedule

If you need more information – ask.

Use data

Example of tracking document by Katherine Trail, reproduced with permission

What is your work worth?

There are two main ways to approach this:

• Work out how many hours or days the work will take, work out your preferred hourly or daily rate, multiply one by the other, and add on contingency to arrive at a figure.

• Work out what the work is worth to the client to arrive at a figure.

SfEP suggested minimum ratesType of work Suggested minimum hourly rate

Proofreading £22.75

Copy-editing £26.50

Substantial editing, rewriting, development editing

£30.50

Project management £33.00

Indexing (SI suggested minimum) £23.00

Value-based pricing

• Don’t charge for units of your time.

• Instead, work out the value of your work to the client – for example, how much more business might they gain by expressing themselves clearly? How much would a mistake in their copy cost them?

• This approach may result in a higher fee, but is perhaps more appropriate for non-publishing clients.

Finalising the quoteVarious factors affect the price of editorial work:

• Project parameters

• Market forces

• Your perceived expertise

• How cautious/confident/cheeky you feel

• How much you need the work

• How much the client needs you

• Editor’s requirements

• Client’s budget

Negotiate and agree terms

• Make sure before you start work that you have in writing the scope of the agreed work, and the fee.

• Assess the work as you go – and if the fee is inadequate or the job parameters change, raise this as soon as you can with your client.

Things I wish I had known• Try to get the client to suggest a fee

• Don’t be apologetic or self-deprecating

• Don’t offer a range of prices for a piece of work

• Aim high – you can always go down, but not usually up

• Walk away if the terms aren’t right

• Replace low-paying clients with higher ones over time

• Higher prices can be more attractive, to the right clients

• Your rates will tend to increase with experience and confidence

Any questions?

15-minute marketing toolkit

LOUISE HARNBY

Most-asked questions

• What exactly is marketing?

• How do I communicate what I do?

• What works best?

• How do I make my mark?

• Should my focus be broad or narrow?

• I’m terrified of marketing – what can I do?

1 definition – 5 frameworks

Definition: 2 words

Marketing = • being discoverable• being interesting

Q: What exactly is marketing?

Being discoverable

How will people find you?• Website, society forums, social media, podcasts,

videos

• Business cards, leaflets, decals

• Phone calls, emails, letters, networking meetings

• Directories, advertisements

Can’t be found = can’t be hired

Being interesting

Why will clients want to hire you?• Skills (e.g. copyediting, proofreading, indexing)

• Experience (e.g. publishing, research, years in practice)

• Industry knowledge (e.g. OSCOLA or APA ref styles)

• Training and accreditation

• Subjects/genres

• Adding value

• Education (e.g. relevant subject knowledge)

Not interesting = won’t be hired

Framework 1: differentiation–empathy–solution

• Developed by Kevin Daum for elevator pitches

• Works beyond the lift – works for multiple marketing communication tools

• Helps you to organize what you want to say

Q: How do I communicate my marketing message?

Differentiation

All about you …

• Skills (e.g. copyediting, proofreading, indexing)

• Experience (e.g. publishing, research, writing, years in practice)

• Training and accreditation

• Subjects/genres

Empathy

All about the client …• Publisher needs proof pages marked up

• Scholar writing in particular academic style

• Charity needing fast turnaround

• Student writing in a second language

• HR manager producing company-wide guidelines

• Indie author publishing to Kindle

Solution

The bridge between the two …• Solving your client’s problems (empathy) using your skills

(differentiation)

• For publisher: ability to use BSI proof-correction language

• For scholar: knowledge of, e.g., APA referencing style

• For student: native-English speaker

• For HR manager: edit for plain English

• For author: edit and format according to KDP guidelines

Framework 2: marketing wheel

• No one ‘best’ tool or activity

• More than a to-do list of separate activities

• Marketing is organic, connected

Q: What marketing tool works best?

Example of interconnectedness

• Website is powerful … only if it can be found

• You need strong SEO, so …

• Use social media and networking

• Create content worth sharing (FW3)

Client’s search/find preferences determine choice

• Different tools used by different clients

• Compare publishers (SfEP directory; emails or cold letters), local authors (Yell or printed Yellow Pages) and students (Google search)

If in doubt, test before you trash …

• Chris Cardell: marketing is testing

• Mindset: Focus is on learning rather than failing

• Testing = Evidence-based knowledge about what works and what doesn’t – for YOU

• ‘I have not failed – I’ve just found 10,000 ways that don’t work’ (Edison)

Framework 3: be a value-adder!• Create and promote resources, tools, information

that are of use to the market (clients and colleagues)

• Added value increases discoverability and interestingness = it’s useful so it gets shared = SEO+

• Promotes your expertise, engagement and passion

• Examples: blog (Adin), tool/app (Sharman), booklet (Harnby), tutorial (Trail), resource hub (O’Moore-Klopf)

Q: How do I make my mark?

Framework 4: even generalists specialize

• 2 types: specialist-specialist and specialist-generalist!

• Market yourself as a specialist, however broad your services and client base (Playle vs Harnby)

• Specializing is interesting (Daum: differentiation)

• Specializing adds credibility (can you really do anything?)

• Specializing increases visibility (SEO vs SEI)

Q: Should my focus be broad or narrow?

Framework 5: 10–10–10• Developed by Suzy Welch, business writer

• Normal to fee nervous. No room for shame

• How will I feel in 10 minutes, in 10 hours, in 10 weeks?

• This tool works – my little secret!

• Feel nervous, but market yourself anyway

Q: I’m terrified of marketing – what can I do?

What do you want to be?• Self-unemployed?

no marketing• Self-employed?

marketing is an everyday function of your business practice

It’s your choice!

Any questions?