This week, I’m running a two-part series explaining what to takes to build a more lucrative writing business.
The basics are easy: make more and spend less. How to do that is the tricky part. Part one of the series looked at ways to boost your freelance writing income.
But what good is making more money if you’re spending a lot to do it? For a higher income to show up on the bottom line, you have to minimize what you’re spending to generate that income.
Here are 10 suggestions for cutting freelance expenses:
1. Do as little marketing as possible. This is where I break ranks with freelancers who write for dozens of publications each year and spend at least a little time every week – or even every day – marketing. By marketing I mean writing letters of introduction, sending out queries to new-to-you publications, researching new markets, etc. Since early in my freelance business, I’ve chosen a different approach. I specialize in a few subjects and write for a handful of publications who give me steady work. Last year I worked for five publications; this year I expect the number to be close to that. I’d rather do that than pitch new publications all the time. My bylines haven’t shown up in as many publications as some freelancers. But I haven’t had to put up with a lot of headaches that dealing with dozens of clients can lead to: in the past four years, for example, I haven’t had to chase down a single client to get paid. Limiting marketing time means I devote more time to producing stories, and that’s good for my bottom line.
2. Go paperless. A few years ago, I made a conscious decision to cut paper out of my freelance writing business. I don’t print out notes. I also send invoices electronically and pay bills online. Not only has it been good for the environment, it saves me money on printer supplies.
3. Drop your landline. I’ve yet to take this step but I know other freelancers who have. You could save $30 or more a month by discontinuing your landline and using your cell phone, Skype or Google Voice for everything.
4. Use free software. I’m still a Microsoft Office girl. But I use plenty of other software that doesn’t cost anything. For example, I use CutePDF to turn documents into .pdf files and Jing to create screenshots of web pages or other images I need for blog posts or other work. More recently I’ve become a big fan of Google Docs and Yammer, web-based software that companies can use to set up private social networks, great for collaborating with far-flung work groups.
5. Cut out unnecessary subscriptions. I keep getting invitations to re-subscribe to the Wall Street Journal but so far I’ve resisted. I love the Journal and use it in my research and reporting. But that’s just it – I’m able to use it online for what I need, so why should I subscribe? And I’m afraid if I got it, I’d be reading it when I was supposed to be working.
6. Transcribe your own notes. I know many freelancers, especially feature writers, who pay a service to transcribe recorded interview notes. This makes sense in some respects. If you make $50 an hour writing and pay someone $20 or $25 an hour to transcribe an interview, your time is better spent writing than transcribing. However, I do most of my interviews by phone and type answers as I go. I use my own form of shorthand, and go over my rough notes after the fact to fill in words and clean up the spelling. As I do, I highlight quotes that I might want to use, and make other notes. It’s such an integrated process I couldn’t see shipping an interview recording off to a service and waiting for the notes to come back to do all of that. Plus, a lot of the writing I do is on deadline, so there’s no time to wait for a service. In the end, it’s cheaper for me to do it myself.
7. Eliminate other non-essentials. I normally take at least one trip per year to visit editors; last year I saw editors in New York, Chicago and Los Angeles. Those trips paid off in enough work to keep me busy through most of 2012, so I don’t expect to go on more than one such trip this year. As boring as it sounds, I rarely do work-related lunches – or even coffees – unless I’m meeting a source or editor. I do pay to belong to a half-dozen professional organizations, but I consider those good investments because it helps me keep up with what’s happening in the industry and connect with colleagues and publishers who might want to hire me. Organizations I recommend: the Online News Association, American Society of Journalists and Authors, American Society of Business Publication Editors, Society of American Business Editors and Writers and Journalism and Women Symposium (JAWS).
8. Wait as long as possible to upgrade office equipment. I just upgraded to a new computer and Microsoft Office 2010. My previous computer was so old that someone who saw a picture of it that I posted here called it “a relic.” Yes, it was – as I was carting the old monitor out of my office I noticed the label on the back said it was manufactured in 1997! But all that equipment was bought and paid for long ago, which means that for several my office/computer equipment costs have been nominal – well, if you don’t count the Android smartphone and iPad I bought in the interim. As long as I could get the job done I was OK with not having the latest technology. And when my outdated equipment started to hinder how I worked, it was time to upgrade.
9. Fund a SEP-IRA. Taxes are a big expense for freelancers, so anything you can (legally) do to pay less is a good thing – and funding a SEP-IRA accomplishes that and helps you save for retirement, which you should be doing anyway. Any money you stash into a SEP-IRA retirement savings account comes straight off your gross income and doesn’t have to be included as income on your 2012 tax return. The IRS allows you to put up to 25 percent of your gross income in a SEP-IRA, up to a maximum of $49,000 for the 2011 tax year (which you have until April 15 to fund) and $50,000 for the 2012 tax year. So if, for example, the total amount of your 2012 freelance income is $50,000, you could put $12,500 into a SEP-IRA and you’d end up paying taxes on $37,500 minus deductions.
10. Take all allowable business deductions. Speaking of deductions – make sure you’re taking everything you’re allowed. Save receipts for every book, software program, printer cartridge, taxi cab ride, plane ticket, parking meter and any other expense you incurred running your freelance business so you can claim them as legitimate business deductions on your federal and state tax returns. Don’t forget to include mileage if you used your car to drive to an interview, meeting or work-related class. the Internal Revenue Service increased allowable reimbursement to 55.5 cents a mile for the 2011 tax year. The more deductions, the less you’ll pay in taxes and the more money that stays in your pocket. Freelancers have different systems for saving receipts. I use Quicken and my bank’s website to track income and expenses and come tax time double check those online statements with paper receipts I’ve accumulated over the year.
How do you squeeze costs out of your freelance business?