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Archive for the ‘Small Business’ Category

Freelance Nation

by: Kate Lister | August 23, 2010

Call them what you like–contractors, temps, outsourced workers, freelancers, day laborers or, as one recent doomsday article suggested, disposable workers. Whatever the term, businesses are calling them more these days.

An overwhelming 90 % of U.S. companies outsource at least some of their work, according to a survey by the Human Capital Institute, a global association of talent management groups. Some outsource almost all of it, and more are heading in that direction: The average portion of work outsourced has grown from 6 percent to more than 27 % since 1990. A third of employers report using more contract employees in the past few years–not typical in a recession–and expect to use even more in the future.
“Outsourcing is no longer considered a temporary fix to a short-term need,” says Katie Ratkiewicz, a practice leader for the institute. “Instead, it’s being redefined as a permanent fixture in organizational makeup.”

Danny Wong used that model when he co-founded his startup, Blank-Label.com, a Wellesley, Mass., maker of custom men’s dress shirts. Wong keeps the core team small–eight staffers in total–and outsources about 60 hours a week of e-mails, live chat, programming and content creation. “Once we’d answered the same customer question for the hundredth time, we knew it was time to outsource customer service, too,” he says. “It increased our quality of life and the quality of our service.”

Indeed, outsourcing at its best can expand your talent pool as well as save you money, allow you to quickly adjust to changes in demand, attract workers who prefer flexible schedules and keep you technologically current. All of these reasons and more are why outsourcing is being touted from most corners of the business world, and why there are so many new converts. Fabio Rosati, CEO of Elance, one of the largest freelance job boards with more than 30,000 new projects posted every month, calls outsourcing “a new, leaner way to start and grow a company with a lot less overhead.” “Suddenly,” he says, “small businesses are operating like mini multinationals.” What’s discussed less often, though, is how different it is to hire and manage a team of freelance workers versus an in-house staff. Just think about it: Outsourcing exposes your intellectual property, trade secrets and customer information. It places your corporate memory and business functions in the hands of outsiders. And–if it’s managed incorrectly–it can trigger a nightmare of investigations and costly penalties from the IRS, Department of Labor and other government agencies, all of which are increasing their oversight.

So is outsourcing for you? And if so, how can you get the most out of it? We consulted human resource experts, outsourcing specialists, lawyers and some of the largest HR associations in the country. Here is their best advice.

Choose the RIght Jobs
Back in 1989, management guru Charles Handy predicted a “shamrock organization,” with one leaf representing the “core” staff, another the “process” areas such as IT, customer service or financial management, and the third leaf representing “projects” groups, such as graphic design, article writing or search engine optimization.

The role of those core people–the cultural center of your organization–is to drive and direct the process and projects groups. Core workers should not be outsourced.

Hour By Hour
On a strict dollar-per-hour basis, outsourcing may not appear to save you money, but not having a fixed commitment to an employee will almost certainly represent a huge savings in the long run. As an example, government numbers show the following average cost for a salaried graphic artist. –K.L.StafferHourly rate based on salary: $20.38Benefits and taxes (32.85%): $6.70Office space (230 square feet at $34 per square foot): $3.91Technology (amortized over life): $1.47Total hourly cost: $32.46ContractorAccording to PayScale.com, the average self-employed graphic artist charges $16.44 to $46.32 per hour. Rates on the freelance job boards range between $10 and $30 per hour.
It may make sense to outsource in one of the other areas if the job requires skills or expertise you don’t often need; tools and technologies you don’t need to own; or special cultural, geographic or industry expertise. FreelancersUnion.org, a nonprofit organization that represents 140,000 independent workers, shows that graphic designers, writers, information technology professionals, artists, editors, photographers, web developers, and media production and marketing professionals are the top outsourced talent. But whatever you’re considering, don’t expect outsourced workers to function completely on their own.

“Employers often outsource because they think it will be cheaper, but there’s a lot involved in establishing processes outside your own organization,” says Sajeel Qureshi, vice president of operations for Computan, a web applications developer in Canada with more than 1,000 customers worldwide. “If you don’t spend the time to teach an outsider your business, don’t expect them to perform as an employee–who has the benefit of cultural immersion–would.”

For example, a public relations agency may have the contacts, relationships and expertise to deliver your message better than anyone on staff, but the PR agency knows nothing about your business and if you don’t teach it, you’ll be wasting your money. The need is even greater, Qureshi points out, if you’re an international operation working across multiple cultures.

Find the Right People

Ron Holifield, CEO of Strategic Government Resources, a Keller, Texas, firm that specializes in training for local government agencies, has almost 200 client cities in 11 states. The company trains more than 1,000 city workers each month, conducts a dozen executive searches per year, operates the largest public sector job board in the nation and does consulting for local governments–all with only eight staff employees.

As a former city manager with 2,500 employees, Holifield knew he didn’t want the headache and cash flow strain of a large staff. So his employees provide the central management, and the outsourced talent is mostly baby boomers who offer years of expertise.

Knowing the kind of person you want is as key in an outsourced job as it is in a staff slot. Start your search with people you know–a trusted advisor, employee, peer or former employee who left on good terms. To expand your search, consider:

Business referrals: See a website, logo or widget you like? Ask the owner if he’d recommend the company that produced it.
· Freelance job boards: Elance, vWorker and oDesk are top among the websites where you can list your project for open bidding, or choose who you want to bid based on their portfolios or other criteria.
· Web searches: If you’re looking for a writer, approach a blogger, freelance writer or author you like.
· Want ads: Check Craigslist, Monster or CareerBuilder.
· Social networks: See LinkedIn, Facebook and other social networks.
· Cloudsourcing: Websites such as crowdSPRING, 99designs, BootB, MEDIAmobz, IdeaScale, Squadhelp and InnoCentive offer forums where you can post your projects and generate dozens of solutions.
· Staffing agencies: They may be more expensive, but they assume all of the recruiting, hiring, training, management and legal responsibilities.
“Finding the right people is difficult whether you outsource or hire, but with freelance talent, we’re able to test them out,” says Wong, the custom shirt maker, who uses oDesk.
Instead of relying on writers’ sample articles–not always a good indication of ability–Wong asks new contract writers to set their first deadline and judges them by what he gets. (He also coaches them along the way and doesn’t expect them to understand all the nuances of his business.)

“It’s an easy and inexpensive way to find people who can handle the work,” Wong says. If he finds someone who’s reliable and doesn’t need micromanaging, he’ll pay a higher rate.
But even with careful vetting, Wong has been stung. “There have been many times that we’ve been stuck with truly awful contractors,” he says.

Many freelancers, he warns, see you as just another project, another paycheck. “You need to find people who really care, who see the potential for a long-term relationship with you, and then nurture them.”

Manage the Right Way
Managing outside talent requires different techniques. You’re not their only client. You may not even be their most important one. They’re not trying to climb your organizational ladder. They may not even be someone you’d want to work with over the long term. They have a job to do and, if you’ve hired right, they want to do it well. But you’re not their boss in the traditional sense.

“If you’re micromanaging, you’ve hired the wrong person,” Wong says. “You need specific measurable goals that define success. The result is what matters, not the process.”

Says Qureshi: “Remember that when you outsource, you become the customer. It’s the contractor’s job to make sure you’re happy. When outsourcing to a large organization, be sure there’s a good account manager between you and the work being done–someone you can call when things aren’t going right.”

Outsourcing can affect staff morale: Employees can become fearful or resentful of the outside workers. But you can avoid the biggest problems by keeping desirable work for your employees. Farm out the undesirable work, and make sure employees understand the reason behind the rate difference between contractors and employees (such as lack of benefits, job security and the employer’s share of taxes).

Consider, too, the risk of information loss or intellectual property issues. Qureshi advises documenting any work as a work-for-hire to give you, not the contractor, ownership of the work.

Also consider including a non-disclosure and/or noncompete agreement. Holifield has found it useful to require contractors to sign a non-compete agreement. Keep in mind, though, that many U.S. contracts are invalid or unenforceable in other countries.

Cheap communications and support services such as Google Docs, Skype, Facebook and others make it easy and inexpensive to find and manage a cadre of remote talent, says Thomas Malone, a professor of management at the MIT Sloan School of Management and author of The Future of Work.

“I still see a huge, untapped potential in outsourcing,” Malone says. “Technology is what makes it easy, but the fact that outsourcing offers freedom and flexibility for both employers and employees is what will really drive it forward.”

The IRS is Watching
Government agencies are ramping up their oversight of employers who use freelance workers
It is one of the ironies of outsourcing: You want to find freelancers who function as smoothly and effectively as staffers. But if you treat freelancers too much like employees, you are liable to be penalized by the IRS and other government agencies for “worker misclassification.”
And employers have never been more vulnerable. In February, the IRS began a three-year initiative to crack down on worker misclassification. Six thousand businesses have already been targeted for audit.
At the same time, President Obama’s budget proposal for 2011 includes $25 million in new Department of Labor spending, including 100 new employees to ramp up enforcement of employee misclassification.
Worker misclassification occurs when a government entity decides that a contractor, freelancer, temp, or 1099 worker is really an employee and entitled to the benefits and protections dictated by employment law. On the financial side, they want the income from the employer’s share of taxes (Social Security, Medicare, unemployment, workers’ compensation).
What can misclassification cost you? According to James Coleman, partner with Constangy, Brooks & Smith, a national labor and employment law firm, the IRS may go after all sums that should have been withheld retroactively, including the employer’s share of Social Security, Medicare, unemployment insurance, interest and penalties.
Misclassification actions brought by the Department of Labor can result in retroactive minimum wage, overtime, liquidated damages equal to the back wages and an award of costs and attorneys’ fees.
Obama’s budget proposal also calls for better collaboration between state and federal efforts to identify misclassified workers. So, once a business has been tagged, it will likely be subject to additional investigations by other agencies.
Certain industries with a history of misclassification are being targeted: trucking, construction, restaurants, grocery stores, janitorial, business services, child care, poultry and meat processing, landscaping and home healthcare. But any company that issues a large number of 1099s or has a relatively large percentage of independent contractors versus zero employees has higher potential for an audit.
Also, many audits are triggered by a claim for workers’ compensation or unemployment benefits from a contractor. Others are brought about when one or more contingent workers decides to sue. In addition, the IRS Whistleblower Program allows a disgruntled worker or competitor to pocket 15 percent to 30 percent of the amount collected if the company is found to be in violation.
Although some federal and state agencies mirror the IRS rules, many do not, so it’s crucial that you seek the advice of an attorney if you have any doubt about worker classification.
The IRS website, irs.gov, explains the criteria for determining whether a worker is an employee or independent contractor. They fall into three categories:
· Behavioral: No-nos include telling contractors where, when or how and in what sequence they’re to perform their job; providing training; requiring them to use or purchase certain tools or supplies; evaluating how work is performed rather than the result.

· Financial: Contractors should have an investment in their own businesses, have an opportunity for profit or loss, not be reimbursed for all expenses, make their services available to the public, and, in most cases, be paid by the project rather than hourly.
· Type of relationship: There should be a contract and, preferably, work should be off-site. Contractors should not receive benefits, be guaranteed a continuing relationship, do work that’s similar to work done by employees (now or in the past) or perform work that’s a key business function.

Originally published on http://www.entrepreneur.com/article/217195

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Starting and running a business alone isn’t for everyone. If you’re up to the challenge, here are a few tips to make it work.

By Peter Vanden Bos
June 21, 2010

So you’re sick of your corporate gig and dream of making a living as a solopreneur?
Actually, you’re not alone (pun intended). There are now more than 20 million single-person businesses in the United States, accounting for more than three-fourths of all U.S. businesses, according to recent U.S. Census data. The prospect of running your own business has some obvious appeal. Being your own boss lets you set your own schedule – at least theoretically. This has some clear advantages for the family man or woman.

But be warned: working for yourself isn’t for everyone. “Just because you’re a great technician at what you do doesn’t mean you’ll automatically be a great entrepreneur, too,” says Marla Tabaka, a business coach who writes The Successful Soloist blog for Inc.com. “They’re two totally different hats to wear.” Running the show solo requires ample amounts of determination, discipline, and fearlessness. “I’ve had many days where I just want to bury my head in the sand and ask, What did I get myself into?” says Chris Jordan, owner of Atlanta Insurance Live, an insurance firm based at his home in Atlanta.

But if you think you’ve got what it takes, follow our tips for building the foundation of a successful venture.

Running a One-Person Business: Getting Off the Ground

Getting a solo business off the ground takes more than a great idea. Like any start-up, it takes a specific, concrete business plan that includes your goals for becoming a solo practitioner. (Do you want to sell your business eventually, or do you just want a change of lifestyle?)

Putting together a plan will force you to think through that bright idea as an actual business. You might find your can’t-miss opportunity was nothing but a pipe dream.

“The biggest mistake I see these days is thinking that a business idea will automatically turn into a viable business model,” says Terri Lonier, president and founder of Working Solo, a New Paltz, New York-based business strategy consultancy, and author of Working Solo: The Real Guide to Freedom and Financial Success with Your Own Business.

Then again, what if the idea really is viable?

“A lot of people start with a kitchen table idea,” Tabaka says. “It’s a great idea you come up with your cousin at dinner. But then the business booms, and your growth gets out of control. You need a plan.”

Another important consideration is your personal financial resources. Make sure you have a considerable amount of capital set aside, especially because in a sole proprietorship you assume personal liability for all activities of that business. If you borrow money and can’t repay it, your personal assets are at stake.

It’s also smart to play to your strengths. “The best thing you can do is to make sure that you’re getting into something that suits you and what you want to do,” Lonier says. “It should be something that uses your unique capabilities and experience to allow you to position yourself uniquely in the marketplace.”

Indeed, drawing upon your previous professional experiences can really get the ball rolling for your new solo venture. “It took me seven years working at a big company to build a clientele,” says Michael Nunziato, a now independent hair stylist in St. Charles, Illinois.

At the beginning, it’s really up to you to determine how the business functions, so be prepared for a migraine or two. “There’s a lot of scrambling,” Lonier says. “It’s like a lot of ducks paddling underneath the water line.”

Dig Deeper: How to write a great business plan

Running a One-Person Business: Stay Focused on What’s Important

Time is a soloist’s most valuable asset, Lonier says. A hawk-like focus on your most important functions as a business owner is essential. Don’t get bogged down on administrative work when you should be focused on marketing your business and driving sales.

As a one-person show, that might prove to be especially difficult. More than one-third of sole proprietors said that their biggest challenge is finding the time and resources to generate new business, according to a recent survey conducted by Visa USA and SCORE, a nonprofit group that counsels entrepreneurs.

And if you aren’t bringing in business to your company, who is? “The hardest thing for me was leaving the security blanket behind,” Nunziato says. “Having a big name behind you really helps bring people in the door.” If you’re trying to build a marketing strategy from the ground up, you need to be clear on who your customers are, because you don’t have any time to waste on marketing to those who aren’t. “That’s really the biggest challenge, determining who exactly your customers are,” Lonier says. “Many times [business owners] think they understand who they are, but you need to be willing to interview and test potential customers, particularly in the early days of a company, in order to be able to build those relationships.”

One way to make marketing easier is through joint-venture marketing, Tabaka says. When she owned a coffeehouse in Naperville, Illinois, she realized that her company and a major drugstore in the same shopping center could work together and support each other’s marketing goals.

Another important and relatively easy way to get your name out into the market is building your web presence through social media like Twitter and Facebook. Be sure you familiarize yourself with and utilize Search Engine Optimization (SEO) to make it easier for people to find your website.

Dig Deeper: Building your web presence

Be Disciplined

Solopreneurship isn’t for the easily distracted. To manage your limited amount of time effectively, you have to be disciplined.

Jordan devotes specific tasks to specific days of the week. “One day of the week I really focus on doing a lot of sales calls and business development,” he says. “Another day is for the business planning and the numbers side. Another day is heavily focused on customer service issues.”

Your clients are the lifeblood of your business, but they can also put a serious dent in your rigid time management schedule. “So often people can monopolize your time, which is the most valuable thing you have,” Jordan says. “[Business owners] make the mistake that you have to drop everything to answer the phone for a client, even if you’re working on something totally different. You have to be in charge of your own schedule.”

One of Jordan’s tricks to sticking to that schedule is limiting all phone conversations to 30 minutes. “I can be in a great conversation, but when we start creeping up on that 30-minute point, I’m aware of it and ready to go onto the next thing,” he says. “It’s something I’ve ingrained in my head.”

Dig Deeper: How to set up a home office

Running a One-Person Business: Delegate, Delegate, Delegate

Just because you’re the only employee of your business doesn’t mean you have to do everything on your own. In fact, you should delegate any task that can be outsourced, particularly if you’re not that experienced – or good – at something. This will allow you to focus on your most important responsibility: driving sales.

Tabaka says she’s a huge fun of virtual assistants. According to the International Virtual Assistants Association, virtual assistants are independent contractors who remotely provide administrative, creative, and technical services for multiple clients. One of the biggest concerns among solopreneurs, however, is that they won’t be able to afford virtual assistants, whose services typically cost around $40 or $50 an hour.

“Solopreneurs often don’t see their own time as having a dollar value,” Tabaka says. “It does. It might take you 20 hours a week to do web design because you’ve got a huge learning curve. That’s 20 hours you could put toward marketing and bringing in new clients.”

Hiring freelancers or independent contractors is another option. Dick Clark, owner of Atlantic Training, hires independent contractors to help reduce the burden of managing the management consulting firm based in his home outside of Los Angeles.

“I try to farm out everything I can,” he says. He prefers to do that with independent contractors rather than full-time employees due to the constantly changing nature of his business. “If I have people working for me, I’m responsible for paying their salary. With contractors, I pay them when I have an income, and I don’t hire them otherwise.”

Technology can also be a major time-saver. Here are a few tools to get you started:

QuickBooks – a business accounting program for small business
Quicken Home Office – personal and business finance software
Filemaker – database management software
eFax – converts your faxes into PDF files sent to your e-mail
Google Docs and Calendar – create and share web-based spreadsheets, presentations and calendar alerts
Mail Chimp – free e-mail marketing service and e-mail list manager

One word of caution from Lonier, however: Make sure you’re familiar with your finances before you hire someone to do your bookkeeping. “If you don’t understand how your finances work, then you’ve lost control of your business,” she warns.

Don’t forget that as a sole business owner, your business relies entirely on you. If you die or become incapacitated, you need to arrange for who’s going to take over your business, or at least pay off your debts. Or if you simply want to take a vacation, make sure you can arrange a backup for when you’re gone.

Dig Deeper: Debunking the delegation myths

Running a One-Person Business: Surround Yourself with Advisers

You’ve probably noticed by now, but the reality of running a business by yourself is that you’re not going to be successful if you do everything completely alone.

In addition to delegating, it’s a good idea to assemble a diverse group of colleagues, peers, and advisers to bounce ideas off of, Tabaka says. “Look at your needs, and look at the areas you’re not strong in,” she says. “Surround yourself with people who know more than you do. You’d be surprised how flattered a lot of people are when you ask them for this mentorship.”

You should ask this advisory group to meet with you on a regular basis, either in person or over the phone. Lonier, who has been in such a group for more than 15 years, meets with them every four to six weeks for about an hour. “We come prepared to talk about some of our current challenges and to get feedback on what we’ve been doing,” she says. “We also hold each other accountable.”

Having trouble finding some advisers? Don’t forget about social media. “I’ve actually met some tremendous people on Twitter,” Jordan says. “It’s important to have that third-party perspective to provide valuable insight.”

Of course, you’ll also want to make sure you have a good business accountant who’s familiar with small business and can meet with you quarterly, as well as a good lawyer if any legal issues come up, Tabaka says.

Dig Deeper: Are you ready for self-employment?

Make Time for Your Life

The dividing line between work and play can often become blurred when you run your own business, particularly if it’s home-based.

“Some people love their 10-second commute,” Lonier says. “They like that they can work when they want. On the other hand, some people haven’t taken a vacation in four years.” Realize that you are the most valuable part of your business and take care of yourself, she says.

Doing that can become one of the more difficult parts of being a solopreneur. “I’m constantly working to find that balance,” Jordan says.

Originally published on http://www.inc.com/guides/2010/05/running-one-person-business.html

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A Good Year for Business Planning

By Tim Berry  

 I’m optimistic about business planning for 2010, and I’m expecting it to be a good year. People are going to do more and better business planning. This is the year for getting key planning elements defined and understood, for regular plan review and course correction, and for more focus on the planning process. All of which means, in a nutshell, that more businesses will benefit from better planning processes. Ultimately, that means more businesses, more jobs and more success.

Why? Three factors:

Factor No. 1: The natural backlash of the’don’t plan’fad
It’s silly, really, but contrarian is cool. So if you look, you can find people (who should know better) bashing business plans. Investors supposedly don’t read them, and some of the most successful startups didn’t have one. The logic here is a lot like saying healthy eating and regular exercise aren’t valuable because some people exaggerate one or the other.

Of course, the kernel of truth in all this is that real business planning is about management, not about a one-time-use document that’s drafted and then left in a drawer. So the whole bit about the misuse of the document is irrelevant.

This underlying truth is precisely why I’m saying business planning is coming up in the world. The more you see experts harping about the straw-man business plan that wasn’t that useful, the more we’re going to see people turning to real business planning because they need it. Business planning isn’t creating a one-time-use document; it’s about managing better and navigating a company through dangers toward long-term goals.

Factor No. 2: Back to planning fundamentals
Trends are taking us back to fundamentals. In the case of business planning, it was never really just about the plan. Consider these two basics of business:

•Form follows function. When you get down to business basics, the plan should only be as big as it takes to meet the business need. If you have the need to show a plan document to some outsider, you might have to do the full formal thing. But most of us just need to manage better. For this, a much smaller, simpler plan coupled with a planning process to build in regular review and course corrections is sufficient. 

•Planning is about managing change. Laughably, some anti-business-plan sentiments argue that a business plan reduces flexibility. In truth, good planning increases your ability to manage change by providing you clear visibility of how everything links together. For example, when sales are different than projected in the plan–and they always are–you have tools for making adjustments to expenses, which means that good business planning helps your company manage rapid change better.

Factor No. 3: New age of accountability
Recently, some smart person said we can drop the “virtual” from virtual business, because it’s just assumed these days. We work online from different computers. We travel. We work remotely. It’s part of the age.

Meanwhile, what happens to accountability? What has to happen is metrics, measurement and keeping track of things. You can’t assume that showing up is enough anymore; things have to get done. And that means getting done remotely, or virtually, or wherever and whenever.

And that is a matter of planning: real planning, tracking, managing and following up. Set the steps down somewhere accessible, and then meet regularly to review and revise.

Tim Berry is the “Business Plans” coach at Entrepreneur.com and is president of Palo Alto Software Inc., which produces the industry’s leading business planning software, Business Plan Pro, as well as other popular planning applications for businesses. He is the author of The Plan-As-You-Go Business Plan and co-author of 3 Weeks to Startup with Sabrina Parsons, both published by Entrepreneur Press.

Originally published at http://www.entrepreneur.com/startingabusiness/businessplans/businessplancoachtimberry/article204532.html

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Essential Habits Of An Effective Professional Freelancer

By Rob Smith

 There’s very little to stop anyone becoming a freelancer. In a highly competitive and, in most places, saturated market, you need to make sure your reputation as a freelancer is well-managed and continues to grow. It’s very possible to get a good reputation without being the best in the world, and it’s even easier to lose that reputation. In this article, we’ll explore 15 habits that are essential in helping freelancers effectively safeguard and grow their reputation, and we’ll also discuss how to make freelancing work for you. The habits are split into 3 sections:

 ■Marketing

■Business and time

■Specific business areas

1.  The Presentation Habit

 Your website should be at the centre of your marketing strategy. It’s where people go to see who you are, what you’re about, whether you know what you’re talking about and what work you have done. It’s your silent 24/7 salesman, and it needs to be right. Fortunately, what your website needs is straightforward:

 ■Well-presented work with a good description of the roles you played

■A brief history of who you are and why you’re where you are

■Contact details that are easily accessible

■Content that is continually tweaked, added to, and updated

Other than that, you can go wherever you want with your own website — and so you should. Personality is key. Some great examples:

 2. The Networking Habit

 They say that within 6 degrees of separation, everyone knows everyone. So you need to make sure that everyone within your 1st degree (i.e. people you know), know exactly what you do. It needs to be exact as well. If you’re a developer you don’t want people saying you’re a website designer, and so on. Your current network of friends, family, and associates are your free word-of-mouth marketing – so get them talking about you right now.

 Once this is done, your network needs to be extended and enhanced. Register with any social networking platforms that can work for you — LinkedIn, Facebook, and Twitter. Within those places, start getting into the right circles. On LinkedIn you may join some appropriate discussion groups that are either local or skill based. On Twitter you may start tweeting and including appropriate hashtags so more people can see your tweet on that subject.

 There are many ways to network and connect with people, so it’s crucial that a freelancer not be afraid to talk to people and share information and contacts. Learn the networking habit and get yourself known.

 3. The Niching Habit

 Freelancers can get into the habit of not only finding their niche, but creating niches. A niche in this case is an area in your overall field of work in which you particularly specialise. If you’ve become very good at creating websites for golf courses, for example, then that’s a great niche.

 The reasons having a niche is valuable are simple: It’s easier to become an expert in a niche. It’s easier to sell to other prospects within that niche as they can see what you have done before. As an expert in that niche you can charge a premium for your depth of knowledge.

 The key to this habit is to proactively build your own niches. Seek out profitable areas in which you can work and concentrate on building niches.

 5. The Growth Habit

 It’s been claimed that it costs seven times as much in resources to acquire a new client than it does to grow an existing one. So the growth habit is about proactively looking at your clients in detail so you can discover new ways to help them.

 One practical way to do this is to cross reference. Write all your services across the top of an excel sheet, then put your clients down the left hand column. Now place an X in the box where a service you have done matches a client. The boxes without X’s are potential growth opportunities and should all be explored before spending too much energy trying to acquire new clients.

 6. The Time Management Habit

 Lacking good habits in time management could cause you to over-committing yourself at certain times, which could lead to:

 ■Missing a deadline and disappointing a client

■Producing sloppy or inaccurate work

■Causing yourself stress because of the pressure to get everything done

The solution to this is an effective planning mechanism. Estimate how long the work will take you, then add a buffer to your estimation. This will ensure that, if it does take longer, it won’t eat into other projects. A 50% buffer works well. That may sound like a lot, but if you go over by 25% and then there are additional client emendations, you’ll need it. Once you have the total time allocation, add it to your diary. Now, here’s the crucial part: Do not move it, shrink it, or change it in any way. If you have to do something urgent that will interfere with that scheduled work, make sure the time is reallocated elsewhere.

 A simple calendar application like Google calendar or Outlook can help you plan your time as a freelancer. If you struggle with where all that time goes and want to get serious about making improvements in time management, something like Rescue Time can really help.

 7. The Flexibility Habit

 Being flexible, responsive, and effective at what you do will allow you to handle unexpected situations, such as when a client contacts you with urgent needs and expects you to help. Having set aside time in advance for such urgent situations will ensure that you earn a reputation as a flexible worker.

 What happens if nothing comes up to fill that pre-allocated time? Well you might finish that other project early and can add something special. What happens if the whole day is taken up by urgent project? No problem, you had already planned this might happen, so you won’t let anyone down.

 Of course you’re not going to be able to foresee everything, but a certain level of flexibility will allow you to please your clients and be relatively free of stress because of time constraints.

 8. The Honesty Habit

 Agencies will not use you again if you let a client down, and your chance of repeat work is slim to none. In the same way, you should not over commit your time, but stay within your capabilities. We all need to stretch ourselves on new projects and learn new techniques and practices — that’s not what this is about. This is about promising to do a task in a specified time when, in actuality, you don’t have any idea whether it’s feasible or not. Above all else, people appreciate honesty. You’re better off being honest about whether you can handle a project rather than taking the risk of letting them down.

 So how can you grow your skills and help your clients? By being honest and asking some good questions:

 ■“I don’t think this project is right for me. I don’t have much experience in [insert technology here]“

■“I can really help you with the [insert service here] part of this project, but I know another freelancer who can help with it. Would you be happy if I managed the project for you but outsourced this other work?”

■“I’ll need more information before I know how long this project will take. Would you mind if I spent a couple of hours doing some research so I can give you an accurate timescale?”

 9. The Over-Delivery Habit

 Do not deliver your projects early. Sound strange? It’s not. If you deliver early, there’s a possibility the client will think you overcharged, and may expect part of his payment to be returned. They might also expect future work to be completed ahead of schedule, which may set a bad precedent.

 Instead, use the extra time to focus on whizz-bang elements — those extra bits of polish and creativity that will gain you the reputation you deserve and let you grow. For a designer this might mean spending time adding nice touches to your graphics; for a developer, it could mean more time to implement a cool piece of JavaScript to replace the plain functionality you originally settled for. The “over-deliver” will earn you a solid reputation, whereas finishing early could get you into trouble.

 10. The Business Advice Habit

 Although as a freelancer you’re skilled at what you do, don’t assume you’ll be able to do your accounts and bookkeeping, fill in tax returns, produce an invoice or write a proposal all by yourself.

 Seek regular advice from respected professionals to help you with these aspects of running your business. This might include speaking with people who run their own operations and understand the ins and outs better than you do. Learn as much as possible from their experiences and mistakes.

 11. The Email Habit

 Email is toxic. As a freelancer you can easily become what’s commonly known as a busy fool. You might spend a significant part of your day just sending and receiving email without ever getting any work done. Instead, be in the habit of controlling email, and not letting it control you.

 To do this you need to:

 ■Turn off all the little reminders, message counts, and other indicators that may catch your eye

■Configure your email client to run a “send and receive” at longer intervals, maybe as little as once per hour

■Set aside blocks of time in the day to deal with all email, then switch it off; if something is urgent, people will use the phone

■Use the ‘touch it once’ philosophy; fully read and deal with every email you open, instead of half-reading some and coming back to them later

 12. The Project Management Habit

 Some clients will want you to fit in with their processes, while others will not enforce this. You need to have very clear processes for how you start working with a client and start a new project. What questions do you ask a new client? Where do you store the information they tell you? How do you keep track of how close the deadline is? Where do you store all the files they send you?

 Email is not sufficient for this! Things will get lost, forgotten or overlooked. You might prefer cardboard folders or ring binders or whatever works for you — but use something and stick to your own system. There are applications like Basecamp and activeCollab that can help with this.

 13. The Research & Development Habit

 Sounds like a big company thing to do but R&D is essential to a good freelance operation. You need to be ahead of the curve or at the very least on it to be servicing your clients most effectively. Be in the habit of investing time for research and development. Expand your current skills and learn new ones.

 Never designed a billboard before? That’s development.

 Don’t know which email marketing system might help your clients? That’s research.

(Campaign Monitor and MailChimp are good options).

 Set aside time every week to do R&D. Build up a list of blogs that feed you new thinking and new ideas. Listen to informative podcasts (Boagworld is a good one).

 14. The Sales and CRM Habit

 How can you allocate your time and resources and figure out whether or not you need to be hunting for new work or concentrating on servicing current clients? You should know at any given time what your work pipeline looks like, how likely is it all to materialize, and at roughly what value.

 There are various applications out there to help, such as Salesforce, SugarCRM (open source edition), as well as 37signals’ popular Highrise.

 15. The Accounts Habit

 Making sure you have any easy way to produce, send, and track invoices is essential, as is getting into the habit of running your accounts professionally, because such habits will ensure regular cash flow. Applications like Blinksale, Freshbooks or Simply Invoices can help formalise the accounts side of your business and give a good professional feel to how you operate. Clients will need invoices for their accounts — make sure they’re not hand written or unbranded.

originally published at www.smashingmagazine.com/2009/12/21/essential-habits-of-an-effective-professional-freelancer/

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 – December 17, 2009

ENT_SafeguardYourBizWhen Homer Bair and his partner, Susan Kreitman, conceptualized a T-shirt and screen-printing venture on a beach in Jamaica, they had little inkling of its potential for international success.  They collaborated with a group of Caribbean artists and, in 1987, created Cooyah Clothing.  The line combined art and fashion with the global appeal of reggae culture.  Headquartered in South Beach, Florida, the store’s success was bolstered by patronage from the late Gianni Versace, Island Records founder, Chris Blackwell, and the area’s global clientele. Soon the brand was spotted on television and in movies, worn by Whitney Houston, Lenny Kravitz, Missy Elliot, and several reggae entertainers. It was distributed in the Bahamas, St. Maarten, Barbados, Germany, the Netherlands, and several African countries.

Despite its cultural origins, Cooyah was a hard sell in Jamaica. To help them break into the local market, Bair’s brother Nigel stepped in.   “He used his connections to clear the product through customs and paid his employees a commission based on the amount of T-shirts sold,” Homer says.

What ensued next was reminiscent of the biblical saga of Cain and Abel. Nigel opened a showroom which became a store. “Before we knew it, he’d opened nine stores,” Homer says. In 2003, Nigel trademarked the Cooyah brand in Jamaica — without his and his partner’s knowledge, according to Homer–knowing it wouldn’t rouse suspicion and under the cover of facilitating the company’s local operations.

James Conley, clinical professor of technology at Northwestern University’s Kellogg School of Management, says this vulnerability is not uncommon in small business.  “Owners must conduct the necessary business hygiene to maintain ownership of their brand and intellectual property.” Herb Williams, a trademark and copyright attorney at Washington, D.C.-based Foley and Lardner, adds that owners “should perform a trademark clearance search to ensure that your “mark” is available, and if it is, register it with the U.S. Patent and Trademark Office.”

Each trademark clearance search can range from $2,000 to $3,000, application filings can range from $500 to $700, and the cost of wrangling with the trademark office, plus attorney fees, is unpredictable.  Most business owners can’t spare the cash or would rather use it toward more immediate needs — a decision, Williams says, that may cost in the long run. He also cautions, “Employees should never work in their name or even your own.  Form an entity, such as a limited liability, and operate under that business name.”

Williams also suggests putting in place employment contracts and non-compete agreements to protect any ideas and techniques that distinguish the business.  “Use a boilerplate contract from a software program and individualize it to fit your business’ environment and requirements,”  Conley says. He also suggests keeping a record that memorializes promises made, even if it unilateral.  “This serves as evidence of intent and backs up an oral agreement.” But with no written agreement in place it was Homer’s word against his brother’s.  “We spent hundreds of thousands of dollars in legal fees fighting for our name and, after 18 years, we didn’t have a leg to stand on.”

Nigel then attempted to trademark Cooyah in the U.S. but failed because Homer had first rights to the company. Williams explains, “Our trademark rights are based on common law usage, meaning priority goes to the first to use the brand, not the first to register.”  Trademark rights are jurisdictional and U.S. rights do not provide rights in Jamaica.  “Every country has its own trademarking scheme that must be followed.”

Now, Homer and his partners have formed a new company, CY Clothing, culled from a Jamaican phrase meaning, “See why we’ve let go yesterday to embrace today.”  The new line reflects their journey and takes them in a greener direction defined by global interconnectedness.  The clothes feature hand-drawn designs and are made of natural bamboo, hemp fabrics, and green-friendly dyes and inks.

If forced to walk away from the business or settle disputes, Williams suggests using caution when referencing the old company and transitioning to the new.  “Overusage of the old name or badmouthing can open the door to legal action,” Bair says. “We’ve learned from our experiences and now we’re unstoppable.”

By Denise Campbell Laidler

originally published on black enterprise online

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As every small business owner can attest, there are myriad challenges to finding long and short-term methods to save on operating costs and still deliver quality goods and service.  Both established companies and new ventures have discovered the numerous benefits of outsourcing work responsibilities and are opting to utilize freelancers, consultants and independent contractors as a cost effective means to help grow their companies, achieve business objectives and make available much-needed capital for investment in other areas of the enterprise.

There are a number of substantial benefits of employing freelancers and outsourcing vital job responsibilities. By taking advantage of a wide range of services provided by outsourcing, smaller firms gain access to the same level of efficiency, expertise and business development enjoyed by larger firms.  Projects and disciplines that can be successfully outsourced include marketing, communications, creative services, IT, accounting and even administrative services.  One of the main advantages of outsourcing and contracting is that enable small business to manage capital expenditures such as labor and operating costs, office space, health benefits and profit sharing. The inclusion of freelance professionals also introduces a fresh perspective and innovative ideas that will give your projects and services an extra shot of ingenuity and competitive edge. Increased efficiency shifts the focus from peripheral, time-consuming activities allowing owners to concentrate on core, income-generating business and customer service and acquisition.  Because freelancers’ income and reputation are largely based on timely payment for services and repeat business, they are inclined to expedite projects to their client’s satisfaction.

There are a few essentials to keep in mind that’ll ensure that you get the most from your freelance experience. First, be sure to request a resume, and work samples with related projects and cross reference them to ensure that they current job requirements and expertise.  Request a client list to ascertain if they’ve handled similar projects and work scope. It’s also very important that you discuss and agree on a mutually beneficial fee, work schedule and payment structure and be sure to put all relevant details and agreement in writing.

Poll

Do you currently or have you used freelancers for any of the following job responsibilities:

IT

Creative Services

Sales and Marketing

Public Relations

Accounting

Administrative/Executive Assistance

Travel & Entertainment Services

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1. Evaluate your Internet access service. Independent and smaller ISP companies often provide high quality service and support for a fraction of the cost of larger companies. You may be able to save over $100 annually.

2. Use a Payment Service instead of a Merchant Account. Payment Services such as PayPal, eGold or Clickbank are cheaper, faster and easier to manage and boast a variety of features such as low monthly fees, discount percentages and programs that add up to big savings.

3. Re-evaluate Your Long Distance Costs and Service. Use the competitive communications market to your advantage in order to drastically reduce your charges instantly and find the perfect rate for your small business’ needs.

4. Find out if you qualify for a home office tax deduction. If you use a room in your home, regularly and exclusively as an office, you may deduct certain other expenditures, such as depreciation and the indirect expenses of operating your home, on a pro-rata basis.

Your car:

5. Convert personal assets into business assets by contributing them toward your business. Remember, you can only deduct the portion of your car that pertains to business only For example, if you use your car in your business, you can deduct the costs of operating and maintaining your car. To do so, pro-rate or allocate the total cost of operating and maintaining your car between deductible business use and nondeductible personal use.

6. Sign up for MasterCard’s Business Savings program and take advantage of travel and entertainment discount and savings programs.  You can receive substantial through over 40 savings partnerships and networks. This includes automotive, services, transportation, hotel, IT usage, dining, and other travel-related expenses.

7. Use your personal retirement plan is to create significant dollars towards your retirement. There are several tax advantages to doing so and you may also qualify to participate in several retirement plans available to small-business owners.

8. Take advantage of the generous first-year of business depreciation write-off for assets bought and put to use during 2007.  Your business may be entitled to immediately deduct up to $125,000 of new and used personal-property assets such as office equipment, machinery, furniture, fixtures and software) under the “Section 179 deduction.”

9. Invest in a website as a foundation and marketing springboard for your business. It’ll work even when you’re sleeping and is a great marketing tool to help you promote and advertise your services. Sites such as youtube.com, Linkedln.com, ladieswholaunch.com and Ryze.com are great for online promotion, resources, business advice and networking.

10. Research and invest in low cost marketing opportunities. Don’t underestimate the power of Blogging. You can advertise your business, review your products and services, get and receive free tips and advice and show of your business expertise. Tools such as WordPress grants access to use creative plug-in, and you can advertise your products or services.

11. Save on Healthcare expenses by finding a plan that’s right for your business and employees. Fee-for-service (FFS) plans and Managed Care plans are most common among small businesses. Health Savings Account (HSA) are also gaining in popularity because it allows employees to share financial responsibility for the plan and gives them the freedom to select a plan that best suits their healthcare needs. There are also several alternatives such as Health Purchasing Alliance (HPA), Health Reimbursement Arrangement (HRA), and Associated Health Plans (AHP).

12. Use freelancers, consultants and contractors who can work from home and help you save in a number of long-term and short-term ways. Outsource some job responsibilities as appropriate and possible or take advantage of the wide-range of services offered by virtual executive assistants.

13. Join trade associations, the Greater Chamber of Commerce, Small Business Associations and other minority –owned business resources.   They’re source for networking, marketing and advertising, and useful information. Many also provide members access to myriad businesses and individuals that can utilize your products and services.  Many offer discounts to minority business owners, provide assistance with much needed services such as healthcare plans, discount programs and tax advice.

Questions and Answers

Q. Every year I look for different ways to cut down my expenses. Is there one large item I should try to cut back on or eliminate?

A. Actually, there probably isn’t. It’s most advantageous to re-evaluate and streamline your overall expenses in order to stay within budget, and then trim the excess from each. Take a hard look to determine which ones you really need. Eliminating a huge item that you may need later on may set you back and end up costing more than you gained.

Q. Internet is essential for my business, but the yearly cost is pretty expensive. Are there ways I can save money without sacrificing service quality?

A. The market is filled with ISPs that you can use the stiff competition to your benefit.

Search the Internet under keywords like “cheap internet access” or “discount isp” for a list of possibilities. Then, try to renegotiate with your existing ISP. Many will offer service of 2-3 months free or a discount with an annual agreement.

Q. I’ve been hearing about merchant services, what are some of the benefits?

A. Merchant services offer lower transaction fees and programs that help your small business to accept credit cards.  If you have a low volume of credit card transactions, it might benefit you to switch from a merchant account to a payment service like Pay Pal or ClickBank. Through PayPal for example, you can send and receive payments quickly and easily, use their efficient accounting system to keep track of transactions, and the PayPal Plus MasterCard has no annual fee and lets you earn reward points for business or personal travel and entertainment.  They’re a indispensable during the tax season. But be sure to comparison-shop before you sign up.

Q. Can I use my home office for tax deduction?

A. Yes, you may deduct certain other expenditures, such as depreciation and the indirect expenses of operating your home, on a pro-rata basis. Even if you fail to qualify for the home office deduction, you are still allowed to deduct other business expenses that you incur while operating your business out of your home.  Your home office space must be exclusively allocated and regularly used for business.

Q. I travel quite frequently for business. Are there travel programs I can use to minimize expenses and conduct business efficiently while away?

A. Sign up for World MasterCard or MasterCard Executive Business Card for premium travel benefits and rewards programs and access to reliable services and merchants nationally or internationally. You can also choose a single travel agency, and insists that employees use it exclusively to book all business trips. Try one of the new online business-travel booking services such as Expedia, Orbitz or Travelocity. A single agency will assist you in ensuring policy compliance, track unused tickets, collect data for negotiations with suppliers and easily locate travelers in an emergency.

Q. Healthcare plans are becoming increasing expensive, but I’d like to provide benefits for my employees without sacrificing my bottom line. What are some economically feasible options available to me?

A. Consider health savings accounts, an increasingly popular option for small business owners. These are tax-exempt accounts used to pay for certain medical expense and could reduce your small business health insurance costs while giving your employees tax breaks.

The larger your group, the lower your premiums will be.  But remember to shop around for the provider that best suits your needs.

Q. A lot of people have been talking about the benefits of “going green?” Can I do this and save money?

A. The “going green” business trend is great for the environment and will certainly help your company save money.  Here are a few eco-friendly tips that will help put your business in the “green.” Be sure to turn off lights and unplug appliances and equipment when not in use; recycle waste materials, reduce energy consumption, purchase biodegradable office supplies and materials; create and support a wellness program for employees.  Going green is not only a money and energy saver, it’s always an effective way to boost morale and team spirit.

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