Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated So, you want to be an editor... who makes money Carolyn L Burke, MA, CISSP, CISM CEO, Integrity Incorporated Executive Director, EAC
Copyright 2010 Integrity Incorporated profitable
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Did I really say money?
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Each of us needs to earn a living in order to pay our bills and save a little for the future.
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated But how much?
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated How much are your services worth?
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Or, how profitable are you willing to be?
Copyright 2010 Integrity Incorporated What do business people know? They know to leverage their knowledge and skills to work for them, but that was last years talk. You work in order to earn a living. Stay focused.
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Warning This presentation may or may not contain numbers, charts, spreadsheets, financial planning and target practice.
Copyright 2010 Integrity Incorporated Focus = Having a Target
Copyright 2010 Integrity Incorporated Aiming at the target
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated LAST YEAR BASIC BUSINESS DECISIONS Are you a freelancer, an employee or a business person? How much are your services or products worth? Are you providing a service or a product? Are you profitable? ADVANCED BUSINESS SKILLS Expanding your business's offerings Finding more work and new clients Setting and achieving goals CONCLUSION Your mission, vision and values Running a profitable business with integrity
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Our agenda this year A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Freelancers and Money A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated How much do you charge? 24 hours in one day 365 days in one year 8760 hours 8 hours in one work day 220 work days in one year 1760 working hours
Copyright 2010 Integrity Incorporated How much do you charge?
Copyright 2010 Integrity Incorporated How much do you charge? A A C C D D E E F F B B
Copyright 2010 Integrity Incorporated How much do you charge? Accumulated total E E
Copyright 2010 Integrity Incorporated How much do you charge? A A C C D D E E F F B B
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated What happened to F ?
Copyright 2010 Integrity Incorporated What happened to F? You didnt charge for all the hours you worked You didnt charge for work that wasnt editing per se Lets change this
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Freelancers and Money A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated What are you charging for? Charge for all the hours you work Charge for work that isnt editing, such as sales time, project management, administration and billing, managing the client or sub-contractors.
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Lets find out how you spend your day
Copyright 2010 Integrity Incorporated What are you charging for? Logging your time Carry a notebook and pen with you. Use one page per day. Record each activity as you go, not after the fact.
Copyright 2010 Integrity Incorporated What are you charging for? HrsCodeTimeActivity 1.0H9am-10am Staff meeting 0.5S10am -10:30amCalled three clients about new projects 0.5B10:30am-11am Client call. Spoke to staff for 10 minutes. 2.0B11am-1pmEdited brochure
Copyright 2010 Integrity Incorporated What are you charging for? CODEType of work BBillable time NNon-billable AAdmin tasks HHR FFinancial MMarketing, networking SSales LLong term XTime spent on special projects TTravel time PPersonal time during official work hours
Copyright 2010 Integrity Incorporated What are you charging for? Tracking your time Once a week, count all the hours spent on each type of activity. Log into your time log.
Copyright 2010 Integrity Incorporated What are you charging for? May10B SUN1 MON3 TUE1 WED3 THU3 FRI3 SAT4 totals18 Your time log
Copyright 2010 Integrity Incorporated What are you charging for? May10BNAHFMSLXTPtot SUN MON TUE WED THU FRI SAT totals Your time log
Copyright 2010 Integrity Incorporated What are you charging for? Daily:Complete your log book page for the day, accounting for every minute Weekly:Update your time log Monthly:Compare what youve billed against the N and B hours, and against the total hours. Is time allocated wisely? Annually:Compare what youve earned against the N and B hours, and against the total hours.
Copyright 2010 Integrity Incorporated What are you charging for? Are you working efficiently? (lower P) Are you spending enough time on billable work? (raise B, lower N) Should you bill for the non-billed work? For sales, admin time, travel? Justify N time: Write a mini essay about why you chose to work for free.
Copyright 2010 Integrity Incorporated What are you charging for? On your invoice, add N, A, T, (and M, S) times. Is the total still reasonable? Next, send that invoice to a client. Check in. Are they comfortable paying you for all your time? If not, perhaps your rates are too low! I guarantee: you are not billing for all the time you spend on a project.
Copyright 2010 Integrity Incorporated Charge for everything you do Log all your time Analyse the log regularly Break into categories: marketing, hr, billable time, administration, sales, bookkeeping, planning.
Copyright 2010 Integrity Incorporated Charge for everything you do Invoice your time Your invoice should look like this: Not like this: Billable hours
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Freelancers and Money A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated What are your costs? G G
Copyright 2010 Integrity Incorporated What are your costs? Flow-through costs Lease Subcontractors Rate-increasing Skill maintenance Marketing Office All tax deductions.
Copyright 2010 Integrity Incorporated What are your costs? Which costs can you reduce? Which can you delay? Which can you eliminate?
Copyright 2010 Integrity Incorporated What are your costs?
Copyright 2010 Integrity Incorporated What are your costs? G G
Copyright 2010 Integrity Incorporated What are your costs? G G
Copyright 2010 Integrity Incorporated What are your costs? Canada Revenue Agency (CRA): you can deduct any reasonable expense you incur to earn business income Tax deductible expenses lower the amount you will owe tax on, thereby raising your overall income.
Copyright 2010 Integrity Incorporated What are your costs? Which other personal or household costs could become tax deductions? Entertainment sales meetings Internet and phone business expenses Insurance convert plan to include CGL Car travel Clothes / makeup deduct if you present to an audience
Copyright 2010 Integrity Incorporated What are your costs? When you plan a tax deductible major purchase, consider which tax year the purchase will fall into. Pick the year with the higher business revenue.
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Freelancers and Money A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated Profit Profit = Revenues - Expenses
Copyright 2010 Integrity Incorporated Lower expenses Reduce all unnecessary expenses
Copyright 2010 Integrity Incorporated Raise revenues Raise your rates Add admin fees
Copyright 2010 Integrity Incorporated Gross Profits G G E E H H
Copyright 2010 Integrity Incorporated Reduce taxes Finally, look at other expenses you could deduct. This will lower your profitability, but will put more after-tax money in your pocket.
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated Signing the contract A look at the EAC Standard Freelance Editorial Agreement
Copyright 2010 Integrity Incorporated Signing the contract A contract: clarifies assumptions includes a statement of work provides recourse includes a schedule for delivery and for payment is a legal relationship
Copyright 2010 Integrity Incorporated Signing the contract 1.Task 2.Delivery 3.Payment 4.Termination 5.Special clauses 6.Indemnity 7.Applicable laws 8.Schedule A – definition of terms
Copyright 2010 Integrity Incorporated Signing the contract 3. PAYMENT The agreed-upon editorial fee of _____________, based on a flat fee or an hourly rate ($_____ per hour), is to be paid by the Client to the Editor in the following manner: __________. Payment is to be made within _____ days of invoice. Any payment after the due date is subject to _____% interest per month (_____% per annum). The Client will reimburse the Editor for direct expenses incurred in fulfilling this agreement, including: photocopying, printouts, inputting, long- distance calls, parking, travel, couriers and postage, ___________.
Copyright 2010 Integrity Incorporated Signing the contract 4. TERMINATION This agreement may be terminated by either party in the event of material change of circumstance, with _____ days notice sent in writing to the other party at the address shown below. If the Editor terminates the agreement, the Editor will be paid by the Client for work done up to the date of termination. If the Client terminates the agreement, the Editor will be paid by the Client for the work done until termination or _____, whichever amount is greater.
Copyright 2010 Integrity Incorporated Signing the contract This contract may be changed only by written agreement between the Editor and the Client. Signed by the parties to this agreement on _____________ (date). Signature: _____________________ Editors printed name: ____________ Address: ______________________ Signature: _____________________ Clients printed name: ____________ Address: ______________________
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated Collecting your fees 1.Include scheduled payment terms. 2.Include a retainer or start-up fee. 3.Include a charge for late payments. 4.Invoice on schedule. 5.After 30 days, phone them.
Copyright 2010 Integrity Incorporated Collecting your fees Terms payable upon receipt doesnt work payable on 30 days is standard
Copyright 2010 Integrity Incorporated Collecting your fees Scheduling your payments 1.Regular intervals Weekly, bi-weekly, monthly Set up your monthly work plan to include time to issue invoices 2.Milestone payments 1 chapter, 20 pages, on completion Submit your invoice with the work
Copyright 2010 Integrity Incorporated Collecting your fees What if you miss your work deadlines? Issue the invoice anyway. Let the client decide to delay payment–they may not.
Copyright 2010 Integrity Incorporated Collecting your fees Collection calls Dont feel badits just business. Youve done the work and are owed compensation. Mediation If you need help, EACs mediator for help:
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Remember these?
Copyright 2010 Integrity Incorporated Revenues
Copyright 2010 Integrity Incorporated Expenses
Copyright 2010 Integrity Incorporated Bookkeeping Issue invoices using your accounting software Enter all receipts for expenses The software will generate the multi- period income statement Add your own projections for the rest of the year (on a spreadsheet)
Copyright 2010 Integrity Incorporated Gross Profits
Copyright 2010 Integrity Incorporated Bookkeeping The software will: Calculate taxes owed (GST, PST, HST) Prepare your year-end statement for your tax return Help you manage your profitability by producing reports and charts Help you stay on top of the paperwork
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated The bottom line You should earn enough to Cover monthly and annual expenses Take a few weeks off Save 10-20% for long term investments
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated How can you be profitable? From today Charge a reasonable rate Charge for every hour worked Lower your expenses Deduct everything you can
Copyright 2010 Integrity Incorporated How can you be profitable? Other ideas (from other sessions) Market your services Specialize (and raise your rates) Find new niches to work in Fire your expensive clients (20% / year) Leverage your time by subcontracting Go through further professional development (and raise your rates)
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated A freelancer How much do you charge? What are you charging for? What are your costs? When will you be profitable? Who makes money Signing the contract Collecting your fees Bookkeeping The bottom line Regularly How can you be profitable? Making those changes
Copyright 2010 Integrity Incorporated Your scheduled week
Copyright 2010 Integrity Incorporated Bulls Eye
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated So, you want to be an editor... who makes money Carolyn L Burke, MA, CISSP, CISM CEO, Integrity Incorporated Executive Director, EAC
Copyright 2010 Integrity Incorporated Integrity Exercise
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Your mission, vision and values
Copyright 2010 Integrity Incorporated A profitable business with integrity Having integrity is using your values and principles as guidelines when making decisions in situations as they arise. In other words, you can run a profitable business on your own terms. What are your terms?
Copyright 2010 Integrity Incorporated Editors' Association of Canada Mission and Vision The Editors' Association of Canada promotes professional editing as key in producing effective communication. Values To sponsor professional development for editors To promote high standards in editing and publishing To establish fair pay and good working conditions for editors To cooperate with the larger publishing community To promote networking for editors
Copyright 2010 Integrity Incorporated What are your core business values and principles? Self respect Profitability ___________
Copyright 2010 Integrity Incorporated Values Order these values from most important to least important. Keep the top 5.
Copyright 2010 Integrity Incorporated What is your business mission? ________________________________ ________________________________ ________________________________
Copyright 2010 Integrity Incorporated What is your business vision? ________________________________ ________________________________ ________________________________
Copyright 2010 Integrity Incorporated Exercise in Integrity Highlight your values and principles in: your mission and vision your business plan your policies, procedures, standards and practices your leadership style your elevator pitch Do they align?
Copyright 2004 Integrity IncorporatedCopyright 2010 Integrity Incorporated Your values should reflect in everything you do