Posts filed under 'Money honey'
Like many entrepreneurs, Adam Levy expected to do well with the music equipment company he started in 2002. Armed with an MBA and pile of money made in the late-nineties technology boom, he invested six figures in his new venture and waited to cash in.
Only things didn’t go as planned.
His business partner, a music industry mastermind, abandoned ship within the first 18 months and the company floundered. Seven years later, Levy still wasn’t making a living wage and was six figures in debt. Out of cash and out of choices, he filed Chapter 7 bankruptcy.
“If I had known then what I know now, I would have just cut my losses, swallowed my ego and moved on,” says Levy, who’s based in Hoboken, N.J. “I didn’t and it almost cost me my marriage.”
Slash Your Budget
Of course, declaring bankruptcy — which experts say should be a last resort — isn’t the only way to stop the bleeding. Reducing your spending should be at the top of your list.
“Getting out of your office space is one big thing I’ve seen people do,” says Dan Olszewski, director of the Weinert Center for Entrepreneurship at the University of Wisconsin School of Business. Same goes for trading in that gas-guzzling delivery truck for a smaller vehicle or selling off that five-figure color copier and learning to love Kinko’s.
[Read the rest of this article -- including resources for negotiating both business and personal debt! -- on Entrepreneur.com.]
February 25th, 2010
Got an email from some mystery reader the other day asking, “Is this site still active? I haven’t seen a post from Michelle in many months.” (Actually it’s been just under two, but who’s counting?) In an upcoming blog post, I’ll explain why I disappeared from the blogosphere for such a long stretch. But first, some fresh content…
Work It, Mom! just ran a new Q&A with me and I wanted to share my favorite question of the bunch:
If you were just starting out as a full-time freelancer and had just enough money each month to pay for ONE of the following things, which would you choose, and why? (1) Hosting for your own website. (2) Mobile web and e-mail on your cell phone/Blackberry. (3) Membership in a paid job listing site like FreelanceSwitch. (4) Four Americanos.
My answer: Easy: web hosting. It’s criminal to not have a website as a freelancer these days. You need your own corner of the digital universe where people can easily learn who you are and peruse your samples and/or client testimonials.
Number one, it makes you look like you’ve joined the twenty-first century (if you forego a site, don’t expect potential customers to be impressed). Number two, it saves you extra time you might have spent explaining your work/approach/MO to a new client. Number three, you can make a one- to four-page WordPress site in a morning. Number four, Web hosting costs less than $10 a month. Number five, in the time you spend scouring those (often crummy, $10/hour) ads on freelancing job sites you could have sent your new URL to everyone you’ve ever met in your life, started schmoozing with other freelancers on Twitter, and drummed up your first client by word of mouth or the power of SEO. I’m a big fan of joining a community and cultivating relationships rather than bidding into the void on projects advertised on job sites, unless it’s a really, really kickass-sounding job.
As for options (2) and (4), I don’t use a smartphone and I don’t drink coffee.
Bonus answer: Yes, you can build a site with an address like http://anti9to5guide.wordpress.com/ for free, but having your own URL is so much easier for people to remember and looks a bit more serious.
Yes, coffee makes the deadlines go ’round, but it’s expensive. If you drink it, brew your own.
Yes, a cool smartphone + data plan will liberate you to work anywhere, but as a new freelancer you should be watching your pennies. Besides, do you really need to be online 24/7?
And yes, some people swear by using freelance job hunting sites like Elance, oDesk, and Guru to land their first few gigs or to supplement their freelance income, despite all the cons they themselves are all too happy to admit (wading through all the crap-pay listings, giving the site a cut of your earnings, the preponderance of bidders willing to work for slave wages). But on freelance email list after email list I subscribe to, people regularly say that they haven’t found such race-to-the-bottom bidding frenzies worth their time.
I can’t speak to the job listings on Freelance Switch specifically; if anyone has a review to share, by all means please do. I’d love to find a job listing site serving multiple freelance disciplines to recommend to new freelancers. As for writers, I hear wonderful things about the publication editors and the freelance listings they post on Freelance Success, which costs about $100 a year.
June 4th, 2009
Last week I asked if anyone wanted to weigh in on my ABC News column on how layoff gossip both helps and hurts office workers. (You can read the column here; it ran yesterday.)
But employees aren’t the only ones who grapple with layoff gossip. As a freelancer and contractor, I’ve recently had to temper my monitoring of the downsizing rumor mill about several of my clients. On the one hand, you want to stay informed of budget and headcount cuts so you can plan accordingly (save your pennies, find new clients, be sensitive to editors enduring employment upheaval). On the other, you don’t want to fall so far down the rumor rabbit hole that you can’t think straight.
In other words, you don’t want to be like the freelance journalist I interviewed for my column who said this:
“I get obsessed with the gossip to the point that I become unproductive. Instead of pursuing the work I have, I’m chasing down the latest choice tidbit on whether this other business is going to close. I’m on the phone with colleagues, I’m reading all the blogs, tuning in to the TV, to Twitter, you name it. It’s probably all a waste of time, but hope springs eternal and all that.”
I can relate to this. As a reporter, I love a juicy story too, especially when it affects my own life and livelihood. I’ve certainly lost a couple afternoons in recent weeks tracking the latest newspaper body count. But I’m trying to remember that if I don’t do the work that’s already on my plate I could be next in line to get the boot.
How about you? How do you deal with the layoff rumors swirling around your star clients?
March 13th, 2009
Like everyone else, I’m looking for ways to shave expenses. Dinners, presents, movies out, and tickets for live music are now few and far between. If I need clothes, I buy used as much as possible (I’ll break for new undees, sneakers, and socks though). If I play with friends, one of us suggests eating in or going to a free event, like a book reading or a talk. European vacation plans with the boyfriend are on hold. You know the drill — the frugal freelance budget, only on steroids.
I’m especially psyched that this insurance agent helped me pick a healthcare plan that costs $1500 less a year but still covers the stuff I need covered. (By dropping maternity, pharmacy, and vision bennies, I save money — who knew!?) And I made the switch from cable TV to Netflix a little while back. Together, these changes save me $200 a month, which ain’t too shabby.
Still, each time I revisit the “Where I can save?” question, two monthly expenses that I don’t really need to be incurring jump out at me:
(1) The money I pay to have my house cleaned every 4 to 6 weeks (about $100, depending on how dirty the house is). This is a total guilty pleasure for me. But I hate to clean and rarely have time to anyway. Besides, I look forward to that one day a month when I sit on the freshly vacuumed couch, survey the tidy, dog-hair-free living room, and think “Ahhhhhh.”
(2) The money I pay to have a 40-pound bag of Buddy’s food delivered every 4 to 6 weeks (about $10 delivery charge each time). For some reason, picking up the dog food is an errand I’ve always hated. Usually I realize I’m out of kibble when the dog needs breakfast and an editor needs the article I’m working on. Also, those bags are dang heavy. So when I heard about a local delivery service, I was all over it.
Although I aspire to live leanly as possible — even if it means sucking it up and picking up my own mutt chow and mopping my own damn floors – I have a hard time letting either service go because these people are independent business owners. It’s a total thrill to not have to pay Comcast $60 extra a month or to tell LifeWise Health Plan where they can stick their stupid, plundering rate increases. But it does not feel good at all to take business away from another self-employed person. So I’ve decided that I’m keeping both services, depression be damned. Unless I have to start dipping into the dog’s food myself, I’m getting my house cleaned and my kibble delivered to my doorstep.
How about you? Are there expenses you feel you should cut back on but can’t bear to dump because you’d be contributing to another small business owner losing income?
February 28th, 2009
I have a guest post on Marci Alboher’s Shifting Careers blog in the online version of today’s New York Times. The intro follows. You can read the rest here.
Despite the fact that I’ve gone from greenhorn to grizzled veteran in my 16 years as a freelancer, I receive calls and e-mails like the following at least once a month:
“We really love your work. And we have a great opportunity for you at our exciting new media venture.”
Translation:
“We’re launching a new Web site/magazine/start-up and we’d love to have you do some consulting work for us. For free.”
My hopeful client will then explain that his or her company is poised to be the next Google or that some former “Apprentice” contestant who’s long since faded into oblivion is on the advisory board. All this is meant to butter me up for the next line, which happens to be the sentence in the self-employment lexicon that I hate the most:
“It will be great exposure for you.”
No one ever filled a gas tank or bought groceries with exposure. The 20.9 million Americans working as consultants, freelancers, small-business owners and independent contractors are not keeping a roof overhead by getting paid in exposure, or “PIE,” as I’ve taken to calling it.
But writers, illustrators and other creative types aren’t the only ones who routinely get asked to donate their time and talents to clients devoid of outsourcing budgets. Business consultants, virtual assistants, bookkeepers, programmers, publicists and all other manner of self-employed professionals get offered platefuls of PIE, too.
Sometimes the PIE — with all its promise of fame and fortune at some vague date on the horizon — will sound pretty delicious, especially if the economy’s in the gutter like it is now. Sometimes you’ll convince yourself that a little sliver of PIE couldn’t possibly hurt your bottom line. But usually these gigs are as empty as the calories at your favorite bakery counter.
Read the rest of this post here.
November 10th, 2008
Happy tax day! If you’re a U.S. freelancer, not only is your 2007 annual tax return due today, your first of four estimated tax payments for 2008 is due too (PDF form here).
If you need a refresher course in freelance tax-paying, here’s a collection of some favorite freelance tax posts from this site (complete with bonus resource list!).
And if want a good chuckle, here’s a hilarious yet ever-infomative piece on freelancing by Salon’s Catherine Price.
See you in the post office line!
April 15th, 2008
Thanks to everyone who wrote in with their burning freelance questions last month. I really appreciate it. This question really stuck in my craw, so I decided to give a quick answer now.
Frustrated Freelancer asks: I recently was negotiating a project with a client I really wanted to work for. After I told them my price, they came back with, “We think this could turn into a lot of ongoing work, so would you be willing to come down?” It made no sense. If they are going to come to me with more work (and therefore take up a higher percentage of my time, which is then unavailable for other projects), why would I lower my price? Maybe there is some logic to lowering your price for some situations? I’d love to know.
I answer: Your instincts are right. “We will give you more work later” does not justify a haggle-down now. It’s a pretty weak argument for the client to make. Not only are you forfeiting 5, 10, or 20 percent of your earning potential now, you’re doing it month and after month if you continue to work with this client. And since you’d ideally want to raise your rates in another year or two to keep up with the cost of living (a topic for another day), you’re starting out wayyyy behind where you need to be.
The client’s tentative language (”Would you be willing…?”) indicates they’re just bluffing and trying to save a few bucks. Something more hard-and-fast like, “We’d love to work with you, but $xx.xx is the highest our budget will allow” lets you know there’s no more wiggle room (say, because you’re negotiating with a non-profit organization or a small company with limited funds for outsourcing projects). So my answer would be, “No, but I could do [a price midway between what you initially suggested and what they're now offering].” If you’ve padded your first offer by 10 to 20 percent of what you actually want for the job and a haggle-down ensues, you have a much better chance of coming away with a price you like.
Before you enter into any negotiations with a client, I’d get clear on what “I really want to work with them” means. Would one sample in your portfolio from this company meet your needs? If all you’re looking for is to be able to say, “I’ve worked with Fancypants Client X,” then the answer is yes.
If, however, you believe strongly in the organization’s mission and want to do whatever it takes to forge an ongoing relationship with them, maybe you resign yourself to working for them at a discounted rate (if that’s the best you can do) in the name of community service and make up the difference with higher-paying bread-and-butter clients. Or, if the client’s offering some high-profile work that would get you noticed by other potential clients, industry bigwigs, and perhaps even the media, maybe you do a few pieces for them and reap the rewards in other ways (perhaps press for your business, which leads to more business) before moving on.
But back to the haggle-down at hand: Say the client’s shot down your counteroffer or shut you down with a “We simply can’t afford it” statement. You want to work with this client at least once, but you don’t want to get branded as someone who makes 80 percent of what she knows she’s worth. So you tell them you’d really like to work with them on their campaign to save the polar bears and will give them a 20 percent discount on this one gig so they can afford it. If it’s a for-profit company, you can add that you hope they can come up in price in next time.
Then on your project agreement and invoice, be sure to indicate that you’re giving a 20 percent discount. That way, the client won’t expect the same low price in the future. And neither will any of the colleagues they recommend you to.
April 3rd, 2008
Jasmine asks: I just started out as a full-time freelance writer/producer/creative consultant in NYC about a month ago. I am a little unsure whether it is my responsibility to offer a W-9 form to clients, or if it is up to them to ask me for one. (Obviously, I’d rather not hand out my social security number willingly.) I have good record-keeping practices to ensure I am able to determine the appropriate amount of taxes I will owe, but expect that without a W-9 I won’t receive a 1099, although I will certainly report the income on my own returns. Any insights as to who needs to initiate a W-9 are very welcome.
I answer: Congrats on going freelance! This question, cousin to “Help, my client didn’t send me a 1099!”, is one I hear a lot from new freelancers. For those who don’t know, a W-9 is a simple form that tells clients your tax ID number (your social security number if you’re not incorporated), which they need for their records and to generate those cute little 1099 forms they send you each January.
It’s in the client’s best interest to get this form to you, and 99 percent of them will. You’re right that you won’t get a 1099 if the client hasn’t asked you to fill out a W-9, either because they’ve never done this before and have no idea that they’re supposed to (in which case, your good records will come in handy at tax time) or because they’re just starting to use freelancers and are too lazy/busy/confused to follow proper tax practices.
Don’t worry so much about giving your social security number to a reputable business that other freelancers can vouch for. I understand the fear, but I’ve never heard of anyone getting their social security info misused by a standup client, and I’ve been doing this since the Pliocene Era. If, however, a new client is giving you the heebie-jeebies, that’s a clear indicator that you shouldn’t work with them. And if anyone has a juicy My Client Committed Identity Theft And/Or Sold My Social Security Number On The Black Market story, I’m all ears (and of course, sorry to hear it).
March 17th, 2008
While I haven’t had many problems getting paid by clients over the years, the occasional accounting snafu does arise. This week I’m dealing with a client who’s been all thumbs in the accounts payable department. (In their defense, a personnel change has led a few check-cutting hiccups.)
Fortunately I’ve had enough money in my account to cover the boo-boos. Still, I thought I’d share my Not Getting Paid Properly Hall of Fame with you. Curiously all these goofs happened during the December holiday season.
- Client who normally sends checks within 14 days of receiving invoice takes almost three months to cut me a check. This requires some prodding on my part. Check arrives unsigned by client. I fail to notice and race to deposit it. Bank returns check to me, unable to cash it. I’m left waiting for client to reissue a valid check. (Duh all around.)
- Long-time client accidentally pays me double the invoice. All on one check. Not wanting to embark on a life of crime, I let the client know. I tear up the check and wait for client to issue a new one. (Merry Chrismukkah. Not.)
- Another December, another long-time client insists that I bill them in advance for work I’m slated to do the coming January. Something about having to pre-bill their client. When the project scope shrinks, I wind up having to reimburse my client a couple thou. (Don’t try this at home. Just as stupid and painful as it sounds.)
- My personal fave: My check arrives in an envelope stuck to the adhesive of another envelope addressed to and containing a check for another freelancer. Clearly an automation goof. Rather than send the poor guy’s check back to the client, I Google him, let him know, and drop it in the mail to him. (A Christmas miracle!)
This probably goes without saying, but impeccable accounting records (via Excel, QuickBooks, or the program of your choice) are a must if you’re even going to catch this stuff (save for the sig-less check).
So what about you? Any stupid payment tricks/accidents on the part of your clients you care to share? Please don’t name names, unless you want to pay my legal fees.
March 5th, 2008
We had ourselves such a lively conversation about grad school last month, I thought the topic deserved another look. I recently did a Q&A about all things higher ed with Kristina Cowan, aka The Salary Reporter, at PayScale.com. Kristina has more than a decade of experience reporting on education and the workforce. Here’s her take on higher ed, community college, trade school, and recession-proof gigs.
Q. I’m a big fan of not using grad school as the “I don’t know what else to do next” default. In the The Anti 9-to-5 Guide, I suggest auditing classes and talking to students in programs you covet before enrolling. Can you offer other tips for weighing a program you’re interested in?
A. It’s a good idea to interview others in the field you’re exploring. Talk to a professor at the school you’re considering, as well as professionals working in the industry. Request informational interviews by phone or, ideally, in person, and prepare a set of questions. A good one to ask is: Will a master’s degree help speed me along the career path and boost my paychecks? I did this when I was exploring a master’s degree in journalism, and found it very helpful.
Ultimately, you should determine the pricetag of graduate school, and whether the advanced degree will truly advance your career and increase your pay enough to justify the expense. Do as much research and talk to as many people as possible so you make a well-informed decision.
Q. When grad school isn’t required for making strides in a particular career path (for example, writing) what are the most compelling reasons to go?
A. I chased a master’s degree in journalism for two reasons I thought were compelling: I knew I could get hands-on experience from the school I picked (Northwestern University’s Medill School of Journalism). I’d get a chance to write and report for real publications in both the Chicago and Washington, D.C. areas, while getting guidance from professors with plenty of journalism experience. I also knew I’d come away with clips I could use when interviewing for jobs.
The other reason was networking. Medill’s alumni and professors form a strong circle of seasoned journalists at every level and in every medium; they’re individuals on fire for the Fourth Estate. I owe much of the last eight years of my journalism career to that network and my Medill experience.
Q. More and more career paths don’t require a college degree, and more and more students can’t afford a college education at all. If a person is clear on the career path they want to pursue and it doesn’t require a four-year university degree, would you advise them to save themselves the cost and skip the diploma? Go to a more affordable community college instead?
A. I always argue in favor of a bachelor’s degree. I’ve read a slew of studies and talked to countless career and education experts who say a bachelor’s degree these days is what a high-school diploma was years ago: almost essential if you want to make it in this world. I wrote a story for PayScale.com exploring the value of a bachelor’s degree, where I report that earnings tend to rise as education levels increase.
That said, higher ed’s skyrocketing costs are scary and disheartening, but they shouldn’t be a deterrent. Community colleges are an excellent, inexpensive option, and they’re incredibly accessible: according to the American Association of Community Colleges, there are 1,195 in the United States. Students should consider spending their freshman and sophomore years at a two-year school, and then transferring to a four-year school. To help pay the bills, they can do work-study or find off-campus jobs.
At the end of the day, college teaches young people about accountability, responsibility, and organization — essentially, what it means to be an adult. I don’t remember much about the facts I learned or the essays I wrote as an undergrad, but I do remember learning how to fend for myself, pay bills, and take responsibility for my future. It was my first taste of independence, and I’ve never looked back!
Q. I’ve interviewed a number of women over the years who’ve rejected the corporate grind from the get-go — or rejected it after a decade or two — for work in the trades (firefighting, bus driving, construction). Do you think trade school is the new graduate school?
A. Trade school can be invaluable. It provides real-world experience you can’t get in a classroom or through a book. I think it’s especially useful for career-changers who want to gain skills and put them to use relatively quickly.
Q. Any tips for a person with a traditional college education who’s considering embarking on a one-year or two-year trade school program? What might they find different in their new program, and what perceptions do they need to let go of?
A. Depending on the person’s age, re-entering anything associated with the word “school” can be daunting. But the truth is, we all should approach learning as something we do throughout our lives. There is no right or wrong age to attend a trade school, community college, or a four-year institution. Demographics in our country are shifting swiftly, as baby boomers retire or change careers and Generation Y comes of age. We must let go of the dated notion that school is for kids. School is for us all.
Q. Do you think there are there any truly recession-proof jobs?
A. It’s important to remember nothing in life is guaranteed — except death and taxes, as the saying goes — and that includes careers and jobs.
Still, some career paths are more fail-safe than others, such as health care, information technology, education, and jobs with the U.S. government. So-called green jobs are another option. The green arena, which includes energy and environmental industries, is growing quickly and there’s high demand for workers in a variety of positions. You can see my recession stories here and here.
Want more Kristina? Visit The Salary Reporter on PayScale.com.
March 4th, 2008
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