Fortunately, freelance writers today have several outlets on the Internet where they can easily publish their work and get paid. It’s not an easy path to riches by any means. But these websites for writers supply you with a little coin, a community of other writers to help you learn and grow, and an opportunity to parlay your experience into more lucrative writing assignments.

Helium

Helium.com is a very interesting venue for writers for several reasons.

First, they supply you with the ideas to write about.  No more writer’s block. Simply pick any topic out of the hundreds of suggestions and start writing.

Second, your work is rated by other writers. For each of Helium’s suggested topics, from three to three hundred writers will submit articles. All Helium members are expected to rate other writers’ work by comparing articles on the same topic and deciding which is better. Their rating engine filters hundreds of such comparisons to rank articles competitively.  Many writers covet getting that #1 rating.

Next, there is a huge forum where you can share and interact with other writers in hundreds of groups on almost any topic of interest.

Now, about getting paid. Helium shares its advertising revenues with its writers. Each of your articles earns money based on its number of page views, and other factors related to your contributions to the site. The more articles you submit and the better quality they are, the more page views you get. And the higher your ranking on the site, the more money you make. You probably won’t be able to pay your rent with your earnings but you might be able to afford a nice evening out every month.

Another way to earn money is to accept assignments from publishers in Helium’s Marketplace. Web publishers are constantly in need of fresh articles to keep their search rankings high. They submit their requirements to Helium’s writers along with a deadline and the price they’re willing to pay.  The publisher is free to select any article from those submitted, and payments range from $15 to $150 or more.  Many writers make most of their earnings in the Marketplace.

Suite 101

Like Helium, Suite101.com shares advertising revenues with its writers. But the vibe at Suite101 is very different.

Helium can sometimes feel like the wild west. Anyone can write an article and publish it at Helium, and some are awful.  Of course, those go to the bottom of the rankings, but they’re still painful to have to read when doing ratings.

Suite101, on the other hand, does not admit just anyone as a freelance writer. To join, you have to submit writing samples and be approved. Suite 101 also has editors who review every article submitted, and will make suggestions to writers when appropriate. You must also contribute a minimum of 10 articles every three months.

Though Suite 101 does not have as much of a community feel as Helium, the pay is significantly higher.  If you write on topics that are reasonably popular, it’s not difficult to earn $1 per month per article. If you post 100 articles, that’s $1200 a year.

Constant Content

ConstantContent.com is a marketplace where you can put your articles up for sale. Publishers looking for content for their websites are able to search for articles on topics they’re looking for.

Articles are reviewed to be sure they meet certain standards before they are accepted on the site. If accepted, you set the price for your article according to different publishing rights you may offer. Typical prices may range from $2 to $240.  If you’re selling usage rights, your article can be sold multiple times. Other rights represent a one-time sale.

Some freelancers have complained that the web site is confusing and when Constant Content rejects an article for not meeting its standards, they aren’t always clear about what needs to be fixed. Other writers have boasted selling hundreds of dollars of material per year through the site.

Associated Content

AssociatedContent.com follows a different business model from Constant Content by offering to purchase themselves the articles you submit. If your freelance article is approved, you will receive an offer typically ranging from $3 to $10. You can choose to accept or reject the offer.  If you accept the offer, your article will be published and you can receive additional payments based on page views.

Though you get to choose the topic you want to write about, your articles must fit within specific categories.  If you’re having trouble thinking of a topic, they have topic suggestions you can write on.

Many freelance writers grumble that Associated Content’s payments are too low, but compared to Constant Content where an article may never sell, at least you’re getting paid and Associated Content pays quickly.

Triond

Similar to Helium and Suite 101, Triond.com also uses a revenue sharing model. Triond is unique, however, because it publishes your articles on a variety of topical websites that it owns. The dozen and a half ezines in the Triond portfolio cover topics such as computers, music, movies, books, travel, cooking, business, health and more.

To write for Triond, it’s best to pick the magazines that interest you and read the articles to get a feel for the subject matter and writing style they like. Then write your article and submit it. If approved, Triond publishes it on the appropriate website and starts tracking your page views.

Recommendations

If you’re really uncertain of yourself as a freelance writer, try Helium first. There are no qualifications and everyone gets published.  The ratings will begin to let you know how well you’re doing as a writer, you’ll find tons of support and encouragement in the forums, and you’ll make a little money on the process.

When you have some confidence in your writing try Associated Content or Triond to see if you can get an actual publisher to say your work is good enough for them to publish. Associated Content will give you immediate gratification (up front payment), while Triond is a source of regular small monthly payments.

As you establish yourself as a freelance writer, try Suite 101. You have to be accepted as a writer and editors will review every article you write, so it’s an excellent place to establish your credentials and grow as a writer. Plus, if you write on popular topics, the revenue share is not bad.

Almost all of these sites use PayPal, so if you don’t have a PayPal account, you’ll need one. Also, you usually have to have a certain minimum revenue accumulated before they will send it to you.  It varies, but can be from a minimum of $10 to $25, and is typically paid once a month. An exception is Associated Content, where your up front payments are usually credited to your PayPal account within a few days.

This article was featured in Working at Home Blog Carnival - 134th Edition at Working at Home on the Internet.

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• To develop a road map in your mind for succeeding in your venture (an internal business plan)
• To demonstrate to someone else you have a roadmap for success (an external business plan)

The Internal Business Plan

A business plan you create for yourself doesn’t need to be a formal document.  You can literally create it on a napkin.  Many successful entrepreneurs have.

The point in creating an internal business plan is to spend the time thinking about the future of your business, and identifying the challenges that are going to arise and how you’re going to deal with them.

A great way to start is to simply write down everything you can think of concerning:

• What you’re selling
• Who you’re selling it to
• What your customers want
• What your customers will pay
• How you will produce or deliver your services
• How much your operations will cost
• How you can finance your operations until income meets expenses
• How you obtain your customers
• How you collect from them
• How long it will take before your income meets your expenses
• Some calculations to back up your projections

When asked these questions, many budding entrepreneurs say, “I have that all in my head.”  The experienced entrepreneurs tell them, “I thought I did, too. But in writing it down, I figured out where I was wrong.”

With so much to think about, writing it all down can seem overwhelming. But since no one else has to read it, it doesn’t have to be pretty.  Just sit down, take one topic at a time,, and write everything you can think of on that subject. You’ll find the exercise incredibly enlightening. And when you’re done, you really will end up with a road map in your head.

The External Business Plan

The external business plan is a formal document you prepare for someone else who needs to know that you have a plan to succeed.  The “someone else” is usually someone who’s going to invest in your business such as a prospective partner, banker, or investor.  When money is at stake, these people want to know that you have a plan, and that your plan makes sense to them.  That requires a well-written and well-organized formal business plan.

The length and detail of a formal business plan will generally depend on the size of the loan or investment.  Ten to twenty pages of pithy information could adequately support a request for up to $25,000.   In the $100,000 plus range, it may take 40 to 50 pages of detail to make your investor or lender feel comfortable.

Don’t let the thought of a formal, written business plan intimidate you, though. If you’re able to write your thoughts down for yourself in any format whatsoever, a competent business plan writer can turn your thoughts and ideas into a brilliant looking document.  To get the help you need, begin by referring to your local SCORE office (Service Corps of Retired Executives) for free, confidential advice.

If you’d prefer to create your own formal business plan, simply search for “business plans” in your favorite Internet search engine.  You will find a wealth of information on the expected format, and business plan examples you can use.

Adapted from an article originally published on Helium.com, with the author’s permission.

This article was featured in the Working at Home Blog Carnival at Working at Home on the Internet, and in the Small and Home Business Blog Carnival at the Small and Home Business Blog.

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Copyright law is very complicated and beyond the scope of this web site, but we wanted to give you a sense of what a freelancer’s rights are to the work that they produce for others.

When you are employed by an organization as an employee, there is usually a clause in your employment contract that states that any product produced by you while under employ by the company becomes the sole property of the employer. This generally extends to intellectual property as well. This is known in the copyright law as “works made for hire“.

In the case of freelancers, this rule does not apply unless you are commissioned to do the work.

Generally speaking, the work that freelancers produce is considered owned by them by copyright laws. Section 201(a) of Title 17 of the U.S. Code states: “Copyright in a work protected under this title vests initially in the author or authors of the work.” Other countries usually observe this convention as well. In common practice, however, the client will ask the freelancer to relinquish all rights of ownership to their work without further consideration or institute a “works made for hire” clause as a condition of the contract. This might not be an issue for you if you will be producing new work on the client’s time. Try at least to get the rights to reference work you produce for your portfolio or other marketing effort.

What about work produced on your own time, as might be the case of with a program subroutine you’ve written that can be incorporated into a new client’s program, or an illustration technique that you’ve branded as your own? In those cases, you’ll have to negotiate your rights as part of the contract.

There is also the issue of electronic rights. When a freelancer agrees to produce something for print media, there is a tacit understanding that the piece has a limited exposure value. However, if that work then is posted onto the Internet or is syndicated and widely distributed on CD-ROM, the question arises whether the author should be compensated with a royalty because of its use beyond the original scope. This issue was at the center of controversy during the Hollywood screenwriters’ strike at the end of 2007, although in that case, it had to do with being compensated for the extended use of their work by producers who collected rental fees when the shows they wrote were released on DVD. The U.S. Supreme Court has upheld the rights of freelancers to prevent use of their work (or require additional compensation) in electronic media in two court cases.

The American Society of Journalists and Authors has published an article that summarizes freelancer’s rights nicely. Although it is targeted primarily to writers, the rights it references apply to other professions as well. A good source for additional information on copyrights, intellectual property, patents, trade secrets, and trademarks can be found at the excellent Intellectual Property Advisor web site.

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Broadband - a term used to describe large-capacity networks that have the ability to carry multiple voice, video, or data channels simultaneously. Sometimes referred to as high-speed Internet, broadband is an ‘always on’ fast connection to the Internet, generally provided by either cable or DSL service.

Chi - the circulating life energy that in Chinese philosophy is thought to be inherent in all things. In traditional Chinese medicine, it is the balance of negative and positive forms in the body believed to be essential for good health.

Commissioned - being charged with the task of creating something unique at the request of and funded by some authority. In a copyright sense, upon completion and delivery, the authority then becomes the sole owner.

DSL - digital subscriber line - represents a family of technologies that permit the high-speed transmission of digital data over standard telephone lines. Once limited to subscribers who were in close proximity to a telephone company central station, DSL broadband service is now widely available.

Docking station - a device into which a laptop computer inserts that enables the user to utilize peripheral devices, like a full-sized keyboard, large monitor, or printer, as if the unit were a desktop computer. Many people complain about the ergonomics of using a laptop, and this solution resolves those issues.

Ergonomics - the science of matching the physical work environment to human needs. It involves studying the “fit” between man and machine to optimize both human well-being and overall system performance and to ensure that tasks, equipment, information, and the environment suit each worker.

Feng shui - an ancient Chinese system of designing buildings and space arrangement according to special rules about the flow of energy, aimed at achieving harmony with the environment.

ISP - Internet Service Provider - This is a company that provides their customers with access to the Internet using dial-up, DSL, or cable connectivity. Most ISPs also provide email accounts and host web pages for their customers.

Modem - a device that converts digital data from a computer into analog signals suitable for transmission over a telephone line. Modems work in pairs, with one at the receiving end converting the analog signals back to digital. A modem is required in order to receive Internet service.

Mosaic - the browser that made the Internet popular by making it easy to access web pages through a graphical interface.

Search Engine Optimization (SEO) – utilizing methods aimed at increasing the amount of visitors to a web site by ranking high in the search results of a search engine. The higher a web site ranks in the results of a search, the greater the chance that site will be visited by a user. SEO efforts may involve a site’s coding, presentation, and structure, as well as fixing problems that could prevent search engine indexing programs from fully indexing a site.

Social networking sites - focus on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others. Social networking web sites, such as Facebook and MySpace, and their business equivalents LinkedIn, Plaxo, and Ryze, are being used regularly by millions of people, and demonstrates that social networking is here to stay as an enduring part of everyday life.

Virtual assistant - an individual who provides administrative, technical, creative, or social assistance to clients, who is usually another independent entrepreneur. VAs, as they are known, work from their own office (hence “virtual”), using the Internet, email, teleconferences, and fax machines as methods of communicating and accomplishing work.

Virtual Private Network (or VPN) - a network scheme in which portions of a company’s local area network use the Internet to connect to another remote location. The information sent across the Internet is encrypted to ensure that only authorized users can access the network and that the data cannot be intercepted. The advantage of a VPN is to provide to small firms the same security capabilities that large corporations enjoy with private lines at a much lower cost because they utilize a shared public infrastructure (the Internet) rather than a private one.

Wi-Fi - the term commonly used to describe a local area network that uses high frequency radio waves to transmit and receive data over short distances, usually a few hundred feet. Wi-Fi is short for “wireless fidelity”. The term Wi-Fi is actually a brand name for a set of engineering standards known as IEEE 802.11.

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The Internet partnered with the falling price of technology have been the two single most influential factors in making freelancing as popular as it is today. To be sure, freelancing existed well before the Mosaic browser appeared upon the scene in the early 1990s, as did the personal computer, but today, a single mom with 3 kids, or a high school student with limited funds can both realistically embark upon a solo freelancing career.
Prior to 1980, freelancers often produced their work manually — illustrators drew sketches on large pads, copywriters and reporters produced copy on typewriters — and couriers or delivery services were used to get the finished piece from point A to point B. Today, a click of the mouse transmits this output in seconds, and instant collaboration can take place anywhere in the world.

The really amazing part that has driven the popularity of the freelancing movement is the fact that this technology is available to just about anybody who is willing to invest some time and very little money to learn how to acquire and use it. In some freelancing situations, the computer may not be needed at all. We would argue, however, that you should still have a computer to run the operational aspects of your freelancing business, even if the services you are selling don’t require one to produce the work. Technology is a timesaver that will justify its cost many times over.

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Here are some of the technologies that successful freelancers use as their stock in trade:

• Broadband Internet Connection - This generally means a DSL (Digital Subscriber Line provided by the phone company) line or a cable line (provided by the same cable company that provides television service). These Internet Service Providers are known as ISPs. Larger companies may use what are known as T1 or T3 lines to provide even faster speed or service a larger user base. Broadband simply means faster speeds so that more data may be downloaded into your web browser window in a timely manner on the computer. You will need a modem and perhaps a router to make the connection.
• Personal Computer - This usually refers to either a PC running Microsoft Windows or a Mac(intosh) running some version of Apple Computer’s OS (operating system). Freelancers often prefer a laptop to a desktop model because a laptop enables them to take the computer with them wherever they go.
• Wireless Network - This technology enables you to connect your computer to the Internet without plugging in any wires. A signal is broadcast that can be detected by a wireless enabled device. Many public places have hot spots that provide Internet access. Peripherals, such as a printer can be set up wirelessly and shared among several computers.
• Productivity Suite Software - Microsoft Office is the most popular, but there are alternatives. Corel, Apple, and IBM offer their versions at a fraction of the price, and Sun Microsystems OpenOffice 2 is free! This software is used to write documents, manage finances and billing, send and receive email, create presentations, track items in a database, and so forth.
• Cell Phone/PDA - It goes without saying that you need to be able to communicate while away from your office, but you may also need the capability to surf the Internet, text message, check your calendar, or take pictures from your phone, and those capabilities are also available from today’s phones and Personal Digital Assistants, like the Palm and Blackberry.
• Multifunction Printer - These devices can be either laser or ink jet-based and provide scanning, faxing, and copying in addition to mainstay printing. Most ink jet models also print high resolution photos.
• Flat Panel Computer Display - The bulky CRT monitor is yesterday’s equipment. High resolution LCD and plasma display monitors are now affordable for the home office. They are also more environmentally friendly, using less energy and taking up less space.
• Internet Technologies - The savvy freelancer takes advantage of the Internet to communicate with clients, transfer files, remote in to the work site, advertise for work, promote themselves, as well as perform the work itself. Depending on the service you provide, the Internet can serve as your world wide network.

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It would not be too much of a stretch to say the main reason that freelancers choose this alternative career path is because it affords them the best of both worlds: a great job doing what they love, and the freedom to choose where, when, and how they perform the work.

For some time now, people have been able to choose when they watch their favorite TV programs. Being forced to plan your other activities around the TV Guide schedule is a concept from another era. First there was the VCR, then the DVR; now we have video on demand.

This concept has now crossed over to careers. People are no longer tied to the clock, geography, or a method of getting work done. Technology has played a big part in this, but beyond that, more and more people are simply demanding to have greater control over their destiny.

Here are some compelling lifestyle reasons to freelance:

• To have greater control over your time. This manifests itself in many ways — from working when you are personally more productive to simply being able to work around your other priorities.
• To have greater control over your destiny. Layoffs are a worry from the past once you establish your freelancing practice.
• You get to pick and choose what projects to take on, so your interests can be satisfied and you can learn new things to keep you motivated.
• It’s easier to maintain a healthy lifestyle by eating the right foods, finding convenient times to exercise, and setting up an ergonomic office.
• When you are your own boss, you get credit for the work you do, experience higher productivity, and receive the direct benefits from your efforts.
• You get to control your working environment by selecting your surroundings, music (or lack thereof), sitting by the pool, etc.
• You experience the ultimate in flex time: choose anytime in the 24 hour period to work that best accommodates your family schedule.
• Relocation is rarely a problem if you should find that you need to move.
• If you are disabled, freelancing may accommodate you better than if you worked in an office setting.
• If you wish, working vacations are possible. You can still be where you want to be even though you may have that deadline.
• You can justify having the coolest technology and write it off to boot!

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In this section, we will explore the following issues and offer suggestions on how to address them:

• Separating Your Work Life from Home Life
• Take Time Out for Yourself
• Hire Help if You Need it
• Avoiding Loneliness

Separating Your Work Life from Home Life

Most of us started our careers working for someone else. Those jobs usually had a definite start and stop time and a prescribed location where work was to be conducted. Larger companies have employee manuals that describe the policies and procedures of the organization and govern how workers must conduct themselves while carrying out their duties.

Once you start freelancing, you have total freedom to decide how, when, and what you will work on and for whom. You also have the choice as to where you will work in most cases (unless you perform your work at the customer site). For many, this place will be their home.

Working from home brings with it two sets of issues that need to be addressed. Acknowledging that they exist is half the battle of resolving them, and discussing them openly with family members usually is all that is generally necessary to ensure they don’t cause problems.

Issue # 1 is your freelancing being taken seriously by family members, friends, neighbors, and anyone else in your home environment. You are not home on vacation, sick, or laid off. You are home conducting business for a client, marketing yourself and your services to secure more of the same, or performing the operational and administrative duties necessary to keep your freelance business running. You are not there to switch loads of laundry, do the dishes, mow the lawn, fix the light switch, or any number of other chores that might be asked of you because you are conveniently home. Likewise, you are not there to chat with neighbors or relatives who drop by, run errands, or help with homework. To be sure, if any of these things are important, and you feel they need to be done during your normal working hours, by all means, schedule them on your calendar and do them. After all, freelancing gives you that flexibility and it’s a major advantage of the work style. But the point is that you should not be interrupted to do these things, and the people around you need to know that.

The second issue lies within you and your ability to cut work off when appropriate and get on with your personal life. In the hourly 9 to 5 world, once you “punch out”, your time is yours. Salaried workers may be “on call” after hours, but generally this is the exception rather than the rule. When you own your own business, this becomes tougher because you are trying to build your customer base and when you work from home, it is especially tempting to work extra hours because it’s so convenient. Eventually this practice will conflict with your family life and cause you stress.

Here are some suggestions to help you “call it a day”:

• Create a separate work space - Try to locate your studio, office, or work environment as far away from the rest of your living space as possible. An outbuilding, shed, or detached garage is ideal, but if that is not practical for your situation, try to at least make it a separate room with a door that can be closed at the end of work.
• Set up an end of day ritual - When you’re done with work, change your clothes and reward yourself by taking a walk, watching the news, or enjoying a glass of wine or beer.
• Get out of the house each day - Schedule an appointment each work day to run an errand, meet with a friend, or pick up the kids.
• Set firm office hours and stick to them - This replicates your former 9 to 5 life, but if you’re used to it and it works for you, why not?
• Place non-work events on your business calendar as well - This prepares you to take the time off you need for social and family events.
• Set reasonable work hours - Set some time aside each day as “free time” where you have nothing specific planned. Be fairly rigid about not scheduling anything work related during that time. Also plan on having one or two full “free” days each week. If you must work weekends, schedule your free days during the week.

If you have a problem with customers calling or stopping by before or after hours, put policies in place of when you are best reached and use an answering machine or service to answer your phone when you are not available. Leave a secure box outside of your home or rent a private mailbox where customers may leave work and instructions for you if desired.

Take Time Out for Yourself

Home-based freelancers are particularly vulnerable to burnout because they never actually leave their workplace. Too many things in our environment beckon for attention, and many of us are so oriented toward taking care of everything else that we neglect to take care of ourselves. As a result, over time, our performance suffers and our health starts to take a hit.

Part of maintaining a healthy life balance means granting yourself permission during your workday to engage in an activity that benefits you. The benefits of exercise are well documented. If you have a hectic personal life, take an hour or two every other day to go to the gym, walk, run, or bike. You wouldn’t even necessarily need to leave home. Purchase a mat, buy or borrow an exercise tape at the library, and work out at home.

Freelancers who work in creative professions often get so wrapped up in their work that they lose all track of time, yet studies show that breaking their focus now and then helps the creative process. Schedule a mini-break of 10 - 20 minutes each day to focus on something completely different. Take a walk, read the newspaper, play with the dog — anything that doesn’t involve too much of a commitment and will allow you to easily return to work.

You also should set aside some time for self-improvement. Read up on a subject of interest. Take a community college course. Attend a seminar or conference being offered in your profession. If certifications are important in your line of work, consider a course of study designed to achieve them. Indulge yourself with a hobby. When working for an employer, you had to justify any education you wanted to take. Now, you just need to satisfy yourself that the instruction will benefit you and is worth your time.

The origin of the word “recreation” means the act of “re-creating” or rejuvenating ourselves. Make sure you schedule a major holiday or vacation each year so you can re-create yourself and strengthen the bonds that tie you with family and friends.

Hire Help if You Need it

One of the things you notice most when you go from employee to freelancer is that everything now falls on your shoulders. Not only are you the producer, but also the marketing, sales, accounting, collections, and administration departments. In short, you have to do it all.

Or do you? When you are first starting out, money may be tight. So you try to tackle everything. As time goes on, you find out that you may be missing opportunities because you are so caught up in the everyday operational aspects of your business that you don’t have the time to take on more billable work. It’s at that point — when you’re turning away work — that you should consider bringing in outside help.

Indicators that you need assistance are:

• You find that you don’t have the skill or expertise to do the job yourself
• Paying someone to do the work would be more cost effective than doing it yourself
• You find that a job can’t be done by one person alone
• You hate doing a job that needs to get done, and so you keep putting it off

This could be anything from hiring a high school kid to stuff envelopes for you to calling in a bookkeeper once a month to keep your accounting in order. You can also hire a virtual assistant — a fellow freelancer — to handle anything from scheduling appointments to putting together presentations. Everything is handled remotely via phone, fax, VPN, or email. There are also professional organizations, known as pass-through agencies, like MBO Partners and Solo W-2 to consider. A pass-through agency is a company that acts as your employer of record, handling billing and collection for you and issuing you a W-2 at the end of the year. But you remain in control of whom you work for, how much you charge, your work hours, and other project parameters. These organizations will also help market you and may have group benefit plans that you can take advantage of, so they are well worth looking into. Solo W-2 even has a Roth 401k plan for people who work independently.

The key is to not drive yourself crazy and increase your stress level trying to do everything yourself. You’re a freelancer, and so that gives you choices and the ability to leverage resources. Explore partnering with others locally to exchange services to help minimize your costs or possibly joining a barter exchange.

Avoiding Loneliness

Loneliness is a common “disease” among freelancers. Where you may have once enjoyed the buzz, socializing, and camaraderie with fellow employees in the workplace, you now are faced as a freelancer with working solo and maybe feeling a little isolated and “out of the loop”.

To be sure, not everyone feels this way. Most freelancers lose any sense of disconnection from their former employer once their business gets up and running. Their former contacts are replaced by a new set of clients, suppliers, neighbors, business associates, and colleagues. But if you start working from home and still have feelings of isolation, there are things you can do to combat them.

First of all, admit to yourself that you are missing something by working from home and try to determine what that something is. Is it the people? The hubbub? Not knowing what’s going on? The constant flow of email messages? For some, it may be the lack of someone who knows your business to bounce ideas off of.

The next step in curing the “disease” is to take action to get involved in activities that will supply what you are looking for. You will need to take this initiative on your own to become involved in the new world around you. Here are some suggestions:

• Join trade organizations that represent your field of work, attend meetings, meet people, and get involved in activities within the organization.
• Stay in touch with your old contacts and let them know what you’re up to. Ask their advice or get their opinion or reaction to something you’re involved with.
• Attend workshops, seminars, and courses in your field and attend networking events that will provide you with the opportunity to meet people with similar interests.
• Go online and blog or participate in forums that address issues in your line of work.
• Schedule breakfast, lunch, or just coffee breaks with peers to share ideas and information you have come across that may be of interest to them.
• Get involved in your community and volunteer your time and services to organizations that advocate causes you believe in.

The bottom line is that you need to create a new support system to replace your old one. Web sites like Meetup are available to help you to connect with people who share common interests with you.

This article was featured in the Working at Home Blog Carnival at Working at Home on the Internet and in the Modern Families Blog Carnival at Modern Families.

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In this section, well cover a number of topics that address this:

• Managing Your Finances
• Solving the Cash Flow Challenge
• Keeping Track of Expenses
• Tax Implications of Freelancing
• How to Provide Yourself with a Benefit Plan

Managing Your Finances

Depending upon your financial circumstances, it’s generally a good idea to wait until you have at least a 6 - 9 month nest egg built up before you quit your regular job and jump into freelancing. At least plan on having another source of money coming into the household because chances are it will take a period of time to get established and have a steady income. You may even want to consider just freelancing part time at first.

Also, discuss your decision to “go freelance” with your family to make sure you have their support and willingness to help you financially until you break even.

Solving the Cash Flow Challenge

Cash flow, simply put, is answering the question “do I have enough money in my business checking account to cover my expenses?” A “Yes” means you have a positive cash flow. “No” means your cash flow is negative. You can’t have a negative cash flow for very long and still survive in business. By being vigilant about your expenses, you can control your cash flow to the extent that you have money coming in. Use a simple spreadsheet program to track your income and expenses. By projecting these items over time, you can develop a cash flow forecast that will help you prepare for lean times or schedule payments for when you have money coming in.

Until you hit the big time, cash advances on projects are rare. Depending on the nature of your work, and the customs in your industry, you may be well underway in completing the work or indeed have completed the project before you start seeing any money. You may be able to ask for quick turnaround on invoices, but sometimes you are subject to the client’s 30 or 60 day pay cycle. Smart freelancers ask questions up front on what the client’s payment practices are and build terms into their contracts that spell out an agreeable payment schedule. If you establish milestones and deliverables during the project, you can often send out periodic invoices billing clients for work completed.

Keeping Track of Expenses

It’s imperative that you keep track of all expenses associated with your freelancing business. Not only might you be able to bill your clients for those expenses, but you can use them to offset income on your tax return.

Most of us would be surprised at what we spend on a day to day basis. Those trips to the convenience store to pick up a necessity like milk or bread end up costing a lot more because of the “incidentals” like newspapers, batteries, or gum that you also end up buying. On the business side, a trip to the office supply store to buy printer ink suddenly ends up also supplying you with envelopes, paper fasteners, and a new desk lamp that you hadn’t originally planned on. We’re not saying that you shouldn’t buy them if they’re needed. The point is, expenses add up quickly and you need to keep track of them.

There are software programs like Quicken that make expense tracking easier, but you still need to save receipts and enter the information. Many banks have Quicken interfaces that allow you to download your account activity directly into the software so that you save the data entry time. If you set up the program to track expenses by account, you can then produce statements that list what you spent, regardless of whether you bill the customer or not.

Tracking expenses creates clarity, and clarity about spending means you can make better choices about where your money goes.

Tax Implications of Freelancing

The tax laws differ in each country, but generally speaking, a freelancer who has not set themselves up as a company or partnership will pay taxes on freelance earnings as ordinary income. This means that they cannot claim deductions for any business expenses that they may incur and may end up paying taxes at a higher rate.

A way to avoid this is to be aware of your options. Your form of organization is the first step. By setting yourself up as a company, partnership or corporation, you change your income status from earning money as an individual to earning money as a legal entity, which entitles you to some tax benefits as well as legal protections. While you may incur other kinds of taxes as a company, generally the money you save in the long run is worth it.

In the United States, the limited liability company, or LLC, has become the most popular choice for small business formations since the Internal Revenue Service approved it in 1988. This is because it retains the best liability protection features of a corporation, while protecting a business owner’s personal assets. This protection is not available to sole proprietors. From a tax standpoint, LLCs are taxed like partnerships, so there are no federal corporate taxes and the members, as they are called, just need to file a Schedule C form to claim business expenses.

Among the tax deductions you have as a company that you cannot claim as an individual are:

• advertising your business
• professional fees for attorneys and accountants
• auto expenses directly related to the business
• cost of renting or leasing equipment, vehicles, your office, or other property used in the business
• seminars and other educational expenses related to your profession
• expenses incurred for the business use of your home
• fees paid to subcontractors you may use to supplement your services
• business insurance
• office supplies and postage
• professional association dues
• travel, meals, and entertainment

These are deductions allowed in the U.S. What you are able to claim in other countries will largely be determined by that country’s tax laws.

The general rule for deductibility is that the expense needs to be:

• ordinary and necessary - common, acceptable, helpful, appropriate for your line of business
• directly related to your business - must be incurred by the business itself, otherwise have to proportion the part that is personal
• reasonable and customary - cannot inflate the amount actually spent and need to be similar to what others would have to pay

One of the things that surprise employees turned freelancers in the U.S. is that they now have to pay estimated taxes. Once you start earning income over a certain amount on your freelance earnings, the federal government wants their income and self-employment taxes four times a year. If you live in one of the income tax states, you may owe taxes to your state government officials as well. Even some local governments, like New York City, have income tax on their residents.

U.S. employees receive Form W-2 from their employers reporting their income and indicating amounts withheld for taxes. As a self-employed freelancer, you will no longer receive W-2s, but may receive Form 1099 MISC from clients that pay you more than $600 in fees and who will request a Form W-9 from you to obtain your tax number.

The Flip Side

As a provider of services, you may also be subject to paying sales taxes to a municipal and/or state taxing authority. As such, you will need to register with them in order to be authorized to collect the appropriate taxes. Not all services are taxable, so be sure to research the government requirements that may apply to your profession first.

How to Provide Yourself With a Benefit Plan

One of the big downsides of freelancing and being self-employed in general is the lack of good alternatives for benefits coverage. You may be in a situation where you are covered under a family plan or have spouse coverage, and if that is the case, consider yourself lucky. For the rest of us, health insurance options are available, but are very costly.

There is an advocacy group called Freelancers Union that is working to make health and dental coverage, disability insurance and retirement plans affordable for those who freelance. They are a nonprofit organization that represents the needs of today’s independent workforce though advocacy, information, and service.

By visiting the Freelancers Union web site, you will be given an opportunity to receive a quote on discounted or group rate health, dental, long term disability, and term life insurances. Membership is free and is open to all independent workers — freelancers, consultants, independent contractors, temps, part-timers, contingent employees, and the self-employed. In addition to their advocacy role, Freelancers Union also provides opportunities for members through event sponsorship, an online forum, a gig listing, a blog, and various discounts.

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• Furniture and Equipment - Tools You’ll Need
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Yard sales, estate liquidators, and used furniture stores are good sources for outfitting your office. There are also used office furniture dealers to investigate, but often the size and quality of the equipment they sell is overkill for the home office, plus you’ll usually pay more.

Beyond just acquiring furniture, equipment, and tools, some thought should be given to how those items will make you productive. If you purchase equipment, and end up with backache, headache, eye strain, or other irritations during the day, you’ll create more problems for yourself.

Working from home veterans and interior design experts point to four factors that you need consider in order to make your home office optimal:

• Convenience - your office setup needs to save you time and simplify your workflow whenever possible.
• Comfort - your office needs to satisfy both your physical and emotional needs and not cause you pain or strain while carrying out your work.
• Function - the equipment you operate and supplies you use often should be within arms length and easy to access.
• Privacy - your office environment should be reasonably free from distractions and secure from intrusion or disturbances.

So for each furnishing you need, let’s take these four factors into consideration.

Desk

Desktop surfaces need to be 30 inches high for writing tasks, but only 26 inches for keyboarding or computing. Look for those that have multiple surfaces or adjustments you can make. Some jobs, like drafting, need tilted surfaces, so desks and tables that can adapt to your preferences are good too. The width and depth of your desk will also be factors, and will largely be determined by the space you have to accommodate it.

Pay attention to the storage space afforded by the desk and how convenient it is to access. Before purchasing any desk, sit down at it and try to visualize where you would put the things you need to access often, whether it be supplies, files, or equipment. If it doesn’t meet the majority of your needs, continue to look until you find one that does. It will likely be the center of everything you do, so it needs to function as more than just a piece of furniture.

Desk Chair

Here’s where you might want to splurge in your budget a bit. Because your rear end will parked in your desk chair for the majority of time you will be working on a given day, it’s very important to have one that supports you properly and can adjust to fit your anatomy perfectly. Many health complaints of office workers stem from not having the proper ergonomically designed chair to sit in.

Experts say that a properly designed desk chair should support the base of your spine and help it hold a slight forward, or concave, curve. The chair should extend high enough to support the back of your head and allow you to relax against it. The chair should support your weight evenly and minimize the pressure on your thighs. The seat should be rounded as to not restrict blood flow to your legs and should be adjustable so that you can have both feet planted firmly on the floor, while maintaining your thighs parallel to it.

The chair should have arm rests that permit adjustment to allow a comfortable angle for your wrists when writing or typing and can be lowered so you can shove the chair under the desk. It goes without saying that the chair must have rollers to enable you to glide to different parts of your desk area as necessary. For safety, a five leg chair is preferable to one that has four.

Filing Cabinet(s)

Here’s where you can generally get a good deal on a used unit. Try to get something substantial from a recognized brand and not too flimsy, because the latter tend to jam. They come in letter sized or legal sized widths and can be either vertical or lateral shape. Take into account your own height in buying because you don’t really want to have to stand on a stool to reach the top drawers. Also plan out your office space so the cabinets will not be too far out of the way to affect your workflow. You may also want to consider getting ones that lock if you typically keep sensitive material in your files.

Computer - Desktop or Laptop?

At one time, laptop or notebook computers were twice the price of desktop models. These days, you only have to pay a slight price premium to enjoy a computer that is very convenient and has comparable processing capabilities to most desktop units. Technology has become the great enabler.

Some people have trouble using the smaller keyboard on a laptop and complain about the tiny screen. Both of those issues can be addressed by purchasing a desktop docking station, where you can easily connect your laptop to a full sized keyboard, a standard mouse, and a monitor that’s as large as you’d like it to be. You then have the ergonomics of a standard computer that then becomes a mobile computer when you disconnect the laptop and go - the best of both worlds.

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Computer Monitor - CRT or LCD Display?

The flat screen LCD displays have come way down in price and are no longer a luxury to have. They conserve space and energy and certainly weigh a whole lot less.

CRT monitors will always be cheaper and do provide a finer resolution if that’s an important consideration for your business (CAD drawings, graphic design, etc).

Printers or Multifunction Machines

The laser printer is the mainstay in most businesses. There are small footprint machines that can be used as personal printers for individual computer workstations and high capacity machines that stand several feet high that can be networked to serve a large office.

Multifunction or “All in One” machines have become very popular in freelance businesses because they combine printing, copying, scanning, and faxing into a compact space saving unit and are now very affordable. Though most are inkjet based, there are some laser versions. You also have the option of color for each function on the inkjet machines.

High Speed Internet

All businesses need a high speed or broadband connection to the Internet. This is usually accomplished by way of subscription to a cable or DSL service through an Internet Service Provider (ISP). The days of dial-up Internet through a phone line are over. You will also need a device called a modem to connect to the service.

You will have a choice whether to go wired or wireless. Wireless, also known as Wi-Fi, is a lot more convenient, but there are issues concerning interference, connection speed, and security that you should research before making a decision.

Internet access can also be achieved these days through a cell phone, where you can synch with your computer back at the office for accessing files, contact lists, and calendars.

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• Creating Your Freelance Environment
• Managing the Freelance Project

• Do You Want to Work From Home?
• Other Alternatives to Working From Home
• Will Your Surroundings Impact Your Productivity?
• Other Considerations

Do You Want to Work From Home?

For most of us, the primary allure of freelancing is the very fact that we can work from home. No more commute. No more office politics. No more having to spend a fortune on a wardrobe. Yes, you will actually be able to wear your bunny slippers if you so choose! It sounds so good, you can picture yourself running your freelancing empire from your spare room already.

However, there are both upsides and downsides to working from home. Let’s take a look at both.

Advantages

• You have greater freedom, flexibility, and control over your work environment. You can create an office with the lighting, color scheme, furnishings, music, and noise level of your choosing. Surveys indicate that 60% of home workers play music while working, fewer than 10% keep traditional 9 to 5 business hours, 53% fit time for exercising into their flexible schedule and 81% dress casually.
• You get more done because you are no longer interrupted by bosses or coworkers who have easy access to you and you spend less time in unproductive meetings. You also can select to work the time of day when you are more alert and at your best.
• Costs go down when you work from home because you save on the wear and tear of your car and visit the gas station less often. Your overhead is lower than renting office space, and you may also save on taxes if you can claim a home office deduction. The Freelancing Money Matters section covers this in further detail.
• You save time on both not having to get dressed for the public and not having to sit in traffic during your commute.
• Your stress level goes down and your health and lifestyle improve. Here’s why: You feel more in control. You are better able to balance both your work and family demands. You’re more likely to eat healthier and find time to exercise. Your daily traffic commute goes away and concerns about layoffs diminish.
• Your family relationships improve because you get to see more of them.

Now the downsides:

Disadvantages

• You are more likely to experience distractions from family members, friends that drop by, and the constant reminder of the household chores that need to be done.
• You need the discipline to get to work and stick to business.
• You need to be able to put work aside at the end of the day and start your personal life. This is especially difficult if you own your own business.
• You need to avoid intermixing work and family life.
• You may have a lack of privacy discussing confidential matters, background noise from family or pets can bleed into phone conversations and there may be issues with inviting clients to your home.
• Being taken seriously by family, friends, and even clients. Some still regard those who work from home as amateurs or slackers unwilling to find a “real job”.

The bottom line is this: If you are a self-starter who likes the line of work you’re in, enjoys working independently with a lack of structure, and knows what you want and are determined to achieve it, you’ll be more likely to succeed when working from home.

Other Alternatives to Working From Home

On the other hand, for some freelancers, working from home is not an option. You may be a stain glass artist or sign maker that uses noxious chemicals or paints in your work and it’s not pleasant having fumes waft through your house. You may lack the space. In some cases, zoning regulations may prohibit you from engaging in commerce from home. Or perhaps keeping family and work separate will be too difficult.

Here are some suggestions:

• If zoning is not the issue, and you have a large enough property, perhaps building a studio or moving your office into an unused outbuilding or detached garage might be an option.
• There are a number of companies that sell prefabricated sheds, and some of them are quite attractive. They will deliver to your site. You will need to provide a foundation. From there, all you may have to do is wire it for electricity, put up sheetrock, insulate, paint, decorate, and furnish.
• An RV travel trailer (hard sided) can be outfitted as an office. Most have utilities already installed and they are somewhat insulated, except for the coldest of weather.
• Rent a professional suite. These generally give you a single furnished office, but then you share common areas like conference rooms, copy rooms, kitchens, etc. Secretarial services may also be provided.
• Rent private office space. Generally, you will need to furnish and equip this yourself. You may be able to share the cost with a fellow freelancer.
• If you live in an apartment building or condominium, perhaps you can rent another smaller apartment in the complex that can serve as your office.
• Do all of your work on the customer’s site. Depending upon the nature of what you do, you may be able to negotiate office space to do all of your work at the client site.

Will Your Surroundings Impact Your Productivity?

We’ve already established that one of the challenges of going freelance is maintaining focus on your work and the elimination of distractions as much as possible. Every work environment is going to have some element that will prevent you from being 100% productive. There are, however, other factors that you may not even be aware of that can also affect the quality of your output:

Lighting

Light affects people in different ways. How much you need and what type depends upon your age, the type of work you do, and the condition of your eyes. Most experts agree that you should try to use natural daylight as much as possible in your work because it provides the truest color and is also the least tiring on the eyes. The quality of the light your windows will provide, however, will be affected by your furnishings, the color of your walls, the direction and exposure of the light, the time of day, and the weather outside. Because most of these things are not a constant, you will need to supplement with artificial lighting.

The two primary artificial types of lighting are fluorescent and incandescent:

• Incandescent lighting is your typical round light bulb and is usually employed for task lighting — light focused directly at your work. It provides light that is easy on the eyes, but is also the most expensive to use and it often creates heat.
• Fluorescent lighting usually takes the form of long tubes in ceiling fixtures, although compact versions are quickly replacing incandescent bulbs in smaller fixtures and lamps. The light emitted by fluorescent bulbs is diffused, often brighter, but the heat output is minimal. Fluorescent bulbs blink at a high frequency, so may cause eye strain or headaches in some people over time.

You generally may need to employ a combination of the two types depending on your work space. Just be aware that light affects your productivity, so be sure to provide yourself with an adequate amount and experiment with the different types to see what works best for you.

Noise

While some people thrive on the hustle-bustle of a busy work environment, others prefer to work in absolute quiet. Too much noise is stressful, distracting, and can lead to errors in your work. Total silence, on the other hand, can decrease your alertness and make you drowsy. Given the choice, surveys indicate that most people like something in between, most preferring to listen to music as their noise source.

While working from home, you have a lot of control over the sounds you hear. You can choose to use — or not use — carpeting, drapes, acoustic ceiling tiles, weatherstripping on doors, room dividers, wall coverings, etc. to minimize the noise level. You can also choose to relocate noisy equipment to a separate room or closet.

Other Considerations

Staying Organized

Now that you are freelancing on your own, it will fall upon you to stay organized and ensure that things stay on track. Once work starts rolling in, it’s easy for clutter to build up and to start misplacing important papers, phone numbers, or the notes you took yesterday at the client meeting. It’s important to keep your filing up to date, trash emptied, vacuuming done, etc. especially if your space is not particularly large. Consider getting help doing this if it is not your particular bent. Sloppiness in your work habits will translate into a negative impression to the client after one too many excuses that “you’ll have to get back to them” because you were not able to find something you were looking for.

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Feng Shui

Feng shui is the ancient art of placement and design used to balance and enhance the energy flow in living environments. It may have benefits for work environments too. Feng shui experts believe that by creating harmony and balance in your physical environment, you will attract good luck and prosperity in all areas of your life. By following some basic principles of feng shui, you may improve your productivity. Try these:

• Set up your home office in the front of the house to take advantage of the flow of energy, since energy enters your home through the front door.
• Position your desk so that you face the doorway or room entrance. Not being able to see who’s coming may trigger unnecessary fears, or “negative energy”.
• Make sure you are comfortable with your computer equipment. If necessary, replace the keyboard and mouse that came with your PC with something ergonomically friendly, with curvy shapes that benefit the flow of energy through your fingers and hands. You also need to position your computer monitor to avoid any hint of glare. Glare is very negative from a feng shui point of view. It interferes with concentration and peace of mind.
• Keep your workspace clean and clutter-free in order to allow a free flow of chi throughout the room (i.e. the life force or vital energy that links people with their surroundings).

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