The business of freelance writing

Writers, as a broad generalisation, often make atrocious bean counters.

I remember walking up to a group of colleagues in a newsroom once and asking them how I worked out what percent $83 was of $3000.

I was met with a sea of blank faces. 'Dunno, mate,' the news editor finally offered before wandering off to top up his mug with his personal mix of catering blend instant coffee and a shot of rum.

But the reality is, if you are going to be a freelance writer, you need to become at least a little au fait with basic fiscal processes.

So, when the editor of the NSW Writers' Centre's Newswrite magazine asked me to pen an article on money and business management for writers, I transported myself back to the time when I had to upskill in the affairs of running my business.

Although I soon learned that managing one's own business affairs was not rocket science - hell, it wasn't even Lego science - it did take a little work, and a lot of thought to get some systems in place.

In writing the article for Newswrite, I thought it would be useful to impart some of that hard-earned knowledge here. Below is an abridged version of said article on money and business management for writers.

Establishing a business plan

I developed a business plan by asking myself some basic questions and collating the answers.

Where was my freelance income going to come from?

Because I had been specialising in health reporting for some time, I narrowed my focus to a few select health and medical topics I knew well.

By writing about issues I was familiar with, I could identify good story ideas and suitable publications more efficiently than if I launched into areas I knew little about.

This work would become my ‘bread and butter’. Networking and establishing rapports with a few editors would be my key to getting regular work.

How would I grow this income in the future?

To increase my income, I had to increase my client base. To do that, I had to diversify.

I knew the bread and butter work would result in time efficiencies because of the familiarity of tasks, processes and editors I was dealing with.

This, in turn, would leave me time each week to cultivate new areas of interest and publications I could pitch to.

What could I offer new clients to entice them to purchase my services?

I had to offer new clients something the minute I made contact with them. Although I wouldn’t necessarily have expertise in their particular fields, I had expertise in interviewing, researching and writing.

By committing to a plan of occasionally accepting lower-paid writing tasks, I would have the opportunity to grow my relationships with editors and develop a broader skill-set to tackle more in-depth, better-paid commissions.

Managing cash flow

Like most small businesses in the service industry, freelancers aren’t paid until the work is done. Have you ever forked out thousands to a mechanic before he’s even popped the bonnet? Thought not.

Cash flow, therefore, can be difficult to manage when invoices are not paid for weeks, or even months. This is where self-management is vital.

To keep the cash flow clogs spinning, I needed to establish regular, staggered work.

Once I was underway on one commissioned article, I would use any down time – i.e. waiting for interviewees to return my calls - to come up fresh story ideas to pitch to publications.

Regular work and staggered deadlines ensured my bank account was periodically topped up.

Become your own savvy PA

Making all this work demanded a system of simple, yet efficient processes.

Step one was to apply for my Australian Business Number (ABN) – which was free through the Australian Business Register.

Next, I called the Australian Tax Office and my accountant and learned that I was exempt from paying GST until I earned $75,000 pa to my ABN, so I developed a policy of not charging GST until I reached this threshold.

This saved me a lot of time when it came to lodging tax returns. (As an aside, I highly recommend everyone seek taxation advice for their own individual circumstance.)

Then, I created an invoice template so that billing clients literally became a two-minute task where I simply filled in the blanks.

I kept the template basic, but included all the relevant details such as my ABN, bank account and cheque instructions, contact numbers and the nature of the work provided.

I found the easiest way to keep track of my work in progress, work completed, outstanding invoices, etc, was to create an excel spreadsheet that detailed every commission.

I included columns for the date I was commissioned, due date, publication name, date of completion, invoice date and paid date.

Finally, to ensure I was saving enough money to cover tax, superannuation and expenses, I established separate columns for these in my spreadsheet and locked away a certain percentage of every payment (worked out by more mathematically minded husband and not the newsroom of blank-faced journos) into a separate bank account.

The bottom line, I quickly realised, was to keep my self-management processes simple, thorough and up-to-date. It’s amazing how much time one can save - which can then be used to generate more work – when efficient systems are in place.

For more information about Pamela Wilson or WriteSmart, log on to http://www.writesmart.com.au/