5 Reasons You Don't Want to be a Freelancer

I'm notorious for telling people that they should switch over to the "independent worker" side. I talk about the importance of freedom in your work. I talk about being able to call the shots on who you do and don't work with. So, why am I writing this post?

The plain and simple answer is that I want you to know the truth, the whole truth, and nothing but the truth about freelancing. Part of my responsibility is to make sure that you are prepared for the world you're about to enter. That means, you need to know the good and the bad. You then have to weigh them both against your own personal situation. I can tell you all day that working independently is the route to go, but that's just my two cents. This isn't the best route for everyone...

Most (if not all) successful businesses exist because there is an employee or team of employees that stands behind the brand to make it work. These people are paid some sort of salary in return for the work they do. They may be paid by the hour, by the day, or by the month. The point is, they are on the payroll. They may have some fringe benefits like paid vacation, 401k, pension, health insurance, etc. They are comfortable working each day as much as needed to earn their set salary (with some positions providing performance-based incentives, like commissions). The employees of the business an an important asset - or resource, if you will. There needs to be people who will do these jobs. It's the way of capitalism (or some other -ism, honestly I'm not in the mood to look it up). Some people work for other people all their lives while others have other people working for them. In between, there are a few who work alone.

That said - the work that you do as an employee is important. As a matter of fact, you are such an essential part of your business that you may not be paid for all of the vital work that you do. But, that's not the point of today's post...

Here are the top 5 reasons that you may want to continue working as an employee as opposed to an independent:

1. You are bad with time. Managing your time well is a skill that can take many independent workers years to learn. If a worker usually works at night, they may have a problem with managing their time. They usually feel that there are not enough hours in the day so their work extends into the evening. Of course, there are others who just prefer to work at night. That's not the people I'm talking about.
2. You are bad with money. You have to be able to save for taxes. It's a must. If you can't save for an entire year, you can pay quarterly, but that still requires at least 3 months of saving. Take it from me, it is no fun to scramble to pay your taxes at the last minute (or worse yet - get on a payment plan with the IRS).
3. You don't have any money saved. Independent workers (like anyone else) need an emergency fund. You must be able to "float" your household as you get started and may not have as much income as you will down the line.
4. You have health issues. Health insurance is expensive. REALLY expensive. It crosses the southern border into EXTREMELY expensive when you have some sort of pre-existing condition on top of that. Employers have group health insurance plans that often don't come with the same pre-existing condition limitations and are certainly not as expensive.
5. You don't work well in isolation. As an independent worker, you may be spending a lot of time on your own. The good news is that there are coworking spaces scattered throughout the entire United States. These are great ways to avoid seclusion, but they aren't without their own costs.

Can you think of any other reasons why an individual wouldn't want to be a freelancer/independent worker?

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Top 5 Ways to Passively Turn Your Target Market Into Your Clients

A few days ago, I talked about the importance of diversifying your income. If you aren't lucky enough to have piles of passive income flowing into your bank account every month, you most likely will need to find clients for your freelance business.

Some freelancers think that this is one of the greatest challenges when it comes to building a successful empire. I think it's quite the contrary. The most challenging part of running your business is keeping your clients. Anyone can impress someone at first glance and sign a new deal. It's what you do AFTER you sign that client that counts. But, I digress...

Getting clients is often as simple as thinking outside the box. There are some prerequisites, though:

1. You should know who your ideal client is. Let's face it, not everyone wants your service, and that's a good thing. After all, there's not that much of you to go around. You want to make sure you still have time for the things you need to do to keep your business thriving.
2. You should know what your clients like. Do they like roses? Boxes of candy? Those weren't real examples, but you want to make sure that you approach your client in the right way. You wouldn't want to take a church friend to a rock and roll concert. Your clients are the same. They are individuals and deserve individualized offerings.
3. You must know how to speak your client's language. That's right - I mean Jargon. People love to talk Jargon in every industry. Outsiders are often left with a strange look on their face. Think I'm joking? Ask any non-SEO person what "link juice" is. :-)

After you get those "pre-reqs" out of the way, you can move on to actually bringing clients into your business.

So, how do you passively change these people from your target market to a client? It's relatively simple.

1. Be patient. It can take time to sign a client - maybe even a year or more. The more patient and persistent you are, the more likely the client will consider you when you're ready.
2. Create "free" solutions to common problems in their industry. Webinars and teleseminars usually do an effective job at helping with these sorts of things. However, you can also use tools like eBooks, whitepapers, etc. As long as it's free, you are being helpful and when they are ready to spend the money, they will count on you for help.
3. Talk to them. Don't just talk to them when you're trying to make a sale, and don't lose contact with them when you realize that you didn't make the sale. You never know how their situtation will change, and you can be the first one there whenever they are looking for a service provider in the future.
4. Teach them something. If you can show someone how to use Facebook in 5 minutes or less, you will have a line a mile long and filled with people who are interested in this "free" social media service. As more and more people sign up, you'll have even more people to add to your content list.
5. Hang out where they hang out. Are they active in the Rotary Club, Chamber of Commerce, etc.? If so, you may want to check into becoming a member. More often than not, the business contacts you gain are well worth the membership fees required to join.

What other tips do you have for passively obtaining new clients?

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Am I An Employee or Independent Contractor?

Are you an employee or independent contractor? You can find out for sure in the paperwork that a client should be providing upon offering you the opportunity.

Before a client "hires" you for an opportunity, they may provide an independent contractor agreement. Some organizations have really short forms (1-2 pages) while others have longer forms. There's really no right or wrong way to do it, but essentially this document outlines both your and the company's responsibility for the duration of your working relationship.

So, what can you expect from this agreement?

In most cases, it will begin with something like this:

This Agreement is made this _____ (Day) day of _______________(Month), __________ (Year), by and between ___________________________________________ (Company),

hereinafter referred to as “Company,” and ___________________________________________ (Worker), hereinafter

referred to as “Contractor”

That part is pretty self-explanatory. It outlines who is who and you can easily scroll through the document and see what the role is for the COMPANY and what the role is for the CONTRACTOR.

Much of the rest of the agreement is dependent on how specific the company is. When thinking about whether you will really be an employee or an independent contractor, here are some common things to make sure of:

• Your work with others is not limited. Non-compete clauses have no place in contractor/company relationships.
• You are allowed to choose the way you do the work as long as it meets the company's expectations. That means - if they want you to create materials for their website, they cannot tell you that you must use a specific program or work at certain hours of the day.
• You don't have to be supervised. This doesn't mean that the company doesn't have a right to review your work for quality, but rather the company cannot impose a restriction to watch over you during your entire workday (i.e. they can't tell you that you can't get on Facebook or can only take breaks at specified times).
• Taxes are not deducted from your payment. As an independent worker, you are responsible for paying your own income taxes. Along with health insurance concerns, this is one of the downsides to freelancing.

The IRS discusses (in detail) what separates an employee/employer relationship from a contractor/company relationship. It's important to make sure that you are not being treated as an employee as that would require your client to pay certain other taxes (Medicare & Social Security). For both you and the client's sake, the relationship should be clearly defined. If they need significant control over your work, you're not a contractor.

I worked for a company before (I won't mention the name) in a virtual call center. I was considered an independent contractor, but they had many "rules" for how the work must be done. Long story short, there ended up being a large class action lawsuit against them for misclassifying workers all around the country. The company lost. They had to pay a substantial amount plus damages. I opted out of the lawsuit, but I think this is a good example of how simply calling a common law employee (term coined by the IRS) an independent contractor.

People: know the law. Know your facts. You are a freelancer. Bask in the true joy of freedom while working.

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Passive Income: The Sexiest Freelance Income

A little bit ago, I talked about the importance of diversifying your income. I can't stress the importance of this. As an independent worker, you should never feel forced to rely on a single stream of income. If you do, you may as well have remained chained to your old 9-5.

The beauty of working independently is that you can do all kinds of stuff. If you want to dabble in a variety of different projects, you can. Your clients typically cannot set any unfair non-compete clauses on you. If they do, I'd probably suggest that you run far away. Why? Because you are not their employee. Non-compete agreements seem too much like employment. Stay far, far away...

I digress, one cool way to diversify your income is to get into creating passive income. What is passive income, you say? It's income that you earn with little to no future effort. For example, if you create a training seminar and sell it online, you likely won't have to do much with it after the fact, but you will continue to earn money as it sells. That's like earning money while you sleep. That's sexy.

One of the goals I announced was to work on earning at least $500 per month in passive income each month by the start of October. How do I plan to do this? One way is through this blog, but I know that blogging for money is a long-term thing, so I can't wholly rely on that. I haven't quite had a chance to really think through what else I can do to earn passively, but I will keep you all updated here. I will likely look into creating some product specifically related to freelancing and start selling it. Again, I'm not sure.

I've been listening to a few podcasts and consistently reading Pat Flynn's blog (he talks about earning smart passive income). He is an advisor and mentor for many of us in the business blogging world - myself included. He is always very candid in everything that he posts - all the way down to him posting his monthly earnings.

I will no doubt be talking more about passive income, but I'd like to know, are you aiming to start earning (or increase) passive income this year? What are your goals? Let's keep each other on track...

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GIVEAWAY: Apple iPod Shuffle

I'm having a giveaway, and the rules are simple - connect with me and my online buddies for more and more chances to win!

The prize: an iPod shuffle
The deadline: 2/29/12 at 11:59 PM
How to enter: follow the steps below!

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The Importance of Diversification

Diversification isn't just a term for investments. As a matter of fact, the term extends into all areas of life - including business. As a freelancer, you've no doubt heard someone tell you that you "shouldn't put all of your eggs in one basket". Even if you aren't a freelancer, you've probably heard that saying before. As you begin to grow your business, it's important to introduce a variety of streams of income. Being too reliant on any one stream can be detrimental to your financial health.

Say for instance you are working with a particular client and are earning enough to maintain a decent living. That's great! But, what happens when things start to go south for that client and they need to cut back on the services they have hired your for or worse yet - they FIRE you?

If you've been keeping all of your eggs in a single basket, you won't be prepared for such a change. Your world will be turned upside down and your financial status will plummet. Dramatic changes, such as this, can send you right back on the job hunt, and we already discussed that you don't want to quit freelancing and go back to slave labor, so that won't work - at least not in terms of your long-term goals. So, what's the solution?

Since you can't rewind time (wouldn't it be neat if you could?), you have to refocus on the future, which can me getting a "real" job for just a bit as you sort out your finances and gradually bridge the gap back into freelancing. If you have a nest egg/emergency fund saved and can stay afloat for a little bit, it would be best to continue on in your search for additional clients.

The emphasis here is on the "s" at the end of that word. You must not settle for only one client, but should focus on having multiple clients. That way, you can be sure that you aren't as affected in the future. Again, let's not put all of our eggs in one basket. Diversify - have several clients in differing industries. That way, there's less opportunity for your work to become mundane and your make sure that if one industry "folds", you still have other clients that are still staying "afloat".

Do you have a diverse book of business or are you putting all of your eggs in one basket?

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3 Tips for Staying on Task

Photo Credit: Dan Brady

I was reading a post on Get Paid to Write Online, and one thing Jeanna said really stuck out to me:

"With all that needs to be done, you may find yourself jumping from one task to another. Not helpful. You’ll look up at the clock and see all kinds of time has passed while you’ve accomplished nothing. This then creates anxiety for you, which then leads to procrastination, which then leads to you not doing what you need to for your business, which ultimately leads your business to a bunch of nowhere if you don’t get back on track."

Read more: http://www.getpaidtowriteonline.com/manage-overwhelm-new-freelance-writer/#ixzz1lKRBDSA3 
Under Creative Commons License: Attribution Non-Commercial No Derivatives

This is my daily life. Really. Time management is an important skill to gain when you work with little or no supervision, and it's not my strong suit. It's something that I haven't yet conquered, and thus, my life is sometimes a bit chaotic. I start with good intentions of conquering it all, but I end up with nothing more than a few start/stops.

Like when I talked about income tax anxiety, I want to share with you some of my thoughts on what can help fix this situation and overall help you overcome the overwhelm that many new (and seasoned) freelancers face. I'm in the thick of it. It is very real, and no you are not alone.

Oh, and I hear you saying "how can you help someone else and you can't even help yourself?" And I answer that with because I can and because I want to. So there. *smile*

So, here are a few tips for staying on task:

1. Plan your tasks hour-by-hour. Your tasks should be planned in advance so that you can dedicate all of your time to that task. After your time is up, you should move to the next task (even if you aren't finished). Leave some "pad" time at the end so that you can finish up anything you didn't during the time allotted. You can also plan your tasks by half hours, quarter hours, or whatever works for you as far as time is concerned.
2. Schedule "fun breaks". When you work from home (especially if you are a freelancer), it's easy to get caught up in the hustle and bustle of working until your fingers bleed (hopefully that's not a literal statement in your case). If you don't set aside some time to have fun during the day, you will resent your work even more. 15-30 minutes is normally sufficient. This way your mind won't wonder to something you perceive as "more fun" when you're working on a more important task.
3. Use a task list. When you're working on your tasks for the day, you should make a list so that you can "scratch things off" when you complete them. It may sound a bit silly, but the mind likes the feeling of completion. Even if you aren't finished with all that you have to do for the day, it's good to be able to check a few things off the list as you go along. That will help fuel your productivity.

Have you heard that Marianne Williamson quote that tells us what "our deepest fear" is? That's pretty much spot on. We are not at all afraid of failing. On the contrary, we are afraid of people seeing is as a major success. It may sound silly, but your lack of good time management and procrastination is deeply rooted in being seen as the success that you are. It all goes back to another saying that goes something like this: "To whom much is given, much is required.". When you are given those praises, you have a certain "reputation" to live up to.

Do you have any other tips for staying on task?

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SMART Goal Progress - February 2012

How are you coming along with this year's goals?

I want to share with you how I'm coming along in my goals (there are seven of them), and I'd love to hear how you all are doing. After all - setting SMART goals is what keeps you thriving as a small business professional (freelancer).

Here are my goals (next to each one, I will update you on my current progress in bold):

1. Start earning at least $500 per month in passive income by the start of the 4th quarter (October 2011). Right now, I work for all of my money. I'm not paid on an hourly basis, but my income is a direct result of my effort each day. I love my work, and I still plan to work, but I also want to start earning money "in my sleep". I've earned $0.29 so far from the Adsense I'm running on this blog. I will have to see a trend over the next month to see whether that puts me on target (as far as growth). It seems pretty low initially, but my blog is growing leaps and bounds each day.
2. Post at least 10 comments per working day on new blogs. This allows for new blog discovery and helps others find my blog. Right now I am averaging about 2-3 comments per day. Some days are higher, but I haven't yet hit the goal of 10. I will strive toward this goal again over the next month.
3. Lose at least 50 pounds by December 31, 2012. Like anyone else, I have weight loss goals. These goals have previously been the form of a resolution, but now that I'm announcing something publicly, I should be better on track to reach it. I've lost 5 out of 50 pounds this month. If I lose the same amount of weight each month, I will be down 60 pounds by the end of the year. I'd say I'm pretty well on target with this.
4. Build an emergency fund of at least $2000. That may seem like chump change to most of you, but as of right now, I don't have any money saved. That would be a major deal for me. So far, I'm still sitting at $0. This isn't something that I've even worked toward, to be quite honest.
5. Grow this blog to receive at least 5,000 monthly page views. Again, this may seem like a small goal to most,  but I have nowhere near this right now. Over the past month, I've had 1,345 views. I'm not counting uniques - just views.. Maybe I should have set a higher goal - who knows? I'd say I'm on target for this.
6. Grow this blog to have at least 1,000 subscribers. Do you notice a recurring theme here? I think that big things come in small packages. (smile) As of this writing, I have six total subscribers on Feedburner. Someone has a long road ahead, but that's OK. I'm in it to win it!
7. Post to this blog at least every Monday, Wednesday, and Friday from now on and for the rest of the year. This is a big one. I can remain dedicated to this blog for a short time, but I always end up falling off the metaphorical wagon. This, of course, is important to achieve the two goals before it. I missed last Wednesday and Friday along with Monday (made up for it on Tuesday) because I was on vacation. Other than that, I have stuck to my schedule. I plan to be even more consistent going forward.

Well, that's how I'm coming along on my goals so far. Where do you stand? Let me know down in the comments...

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