By Deirdre Bannon, 2015 JAWS Fellow
Dana E. Neuts (@SPJDana) presented strategies for success as a freelance journalist in her workshop, “Freelance Doesn’t Mean Free” at JAWS CAMP.
Neuts, the immediate past president of the Society of Professional Journalists, started her Seattle-based freelance writing business, Virtually Yourz, in 2003. After only 18 months, she was able to fully support herself through a combination of editorial and corporate clients.
But navigating the business side of a freelance career isn’t always easy, so Neuts shared her tricks of the trade with journalists looking to start or expand their independent journalism businesses. Her advice included how to negotiate rates and contracts, how to keep the IRS happy, and how to make sure you’re able to save for retirement. Here are the top 10 takeaways from the session.
1. Don’t work for free: It minimizes what everybody does and it hurts the industry as a whole. Your work is valuable; charge appropriately for it.
2. What you charge will depend on your market, experience level and deadline.
If an editor or client asks you to write a piece on a very tight deadline and you’re able and willing to accommodate that, charge more for it. They may back off the deadline and give you more time or they might pay you a premium rate to get the work done quickly.
Ask other freelancers about rates and what they charge to get a sense of whether you’re being paid appropriately.
3. If a publication typically offers a low payment rate, you can ask for better compensation, but be prepared that you could sever your relationship with that editor.
If you accept the lower rate, the editor might expect you to continue to work for that rate.
You could say you would accept that lower rate for the first few assignments but that you expect that it would increase in future.
4. When building your freelance business, it could be helpful to do the following exercise: In one column list all the services you could provide and in another column list all the services you want to provide.
From there, develop relationships with editors and other clients to help you build the freelance business you want to create. The suggestion is from “The Freelancer’s Bible” by Sara Horowitz, the founder of Freelancers Union.
5. Make sure the terms of your assignments are clearly spelled out in email or in a business contract or agreement. Be sure to include expectations of the assignment, word count, deadline and payment terms, including when you will be paid.
6. Get a tax ID number.
The email or contract could also include a “privacy clause” if you’re ghostwriting a blog, for example, stating that you will not disclose to others that you are the author with your client’s consent. To protect your security and privacy, don’t use your Social Security number on W9 tax forms — use a tax ID number instead. You can get one as a sole proprietor or as an LLC. Becoming a sole proprietor doesn’t cost you anything, but you could pay more in taxes depending on how much you make; creating an LLC is a process and there is a cost involved.
7. Take 10 minutes every day to enter your business expenses, such as mileage for an assignment or a magazine subscription, into an accounting software program like QuickBooks, or use Excel or a similar program. It’s more efficient than waiting to do so monthly when the task could take much more time and effort.
QuickBooks will also categorize your expenses, making it easier when you file your taxes. The Simple Start version of QuickBooks is basic and includes most of the tools freelancers will need to record income and expenses, send out and track invoices, and prepare for tax reporting.
8. Contribute to your retirement plan regularly, no matter how much you can put aside or how old you are.
Traditional IRAs can be purchased with pretax dollars. However, you will be taxed when you withdraw the money at retirement. This may be a higher tax rate than you are currently paying. With a Roth IRA, you pay taxes now at your current tax rate, but when you take the money out at retirement you won’t be taxed again.
There are plenty of solo 401(k) options, which were first created about 10 years ago. The Freelancers Union offers a group 401(k) plan.
9. Thanks to the Affordable Care Act all freelancers have access to health insurance. Health insurance is regulated by state, so state exchanges are typically the best places to shop for plan options. If you need help navigating the health insurance system or if you have special circumstances, consider working with an insurance agent or hiring a broker to help you shop for coverage that meets your needs.
10. If you only take away one thing Dana said it should be this: Know yourself, know what you want to do and what your limits are.
- “The Freelancer’s Bible” by Sara Horowitz, founder of the Freelancers Union
- “My So-Called Freelance Life” by Michelle Goodman
- “Get a Freelance Life” by Margit Feury Ragland for Mediabistro
- “The Pocket Small Business Owner’s Guide to Taxes” by Brian Germer
The American Society of Journalists and Authors may be a good resource to discuss contract issues, including indemnification clauses which are appearing in contracts more often.