Basic business things every freelancer should do (right now)

Let’s just dive on in to this one; a few basic business management things that every freelancer should do, right this red hot second. Not rocket science, just things that are crucial to the survival of your business!

  1. Completely separate your business and personal finances. Even if you are not incorporated, open a separate checking account for your business to keep things clean. This also really facilitates recreating your accounting records if you ever need to.
  2. Have a reliable project and invoice tracking system. Post-it notes on the computer monitor work if you’re doing one translation job every two months. But when you start juggling multiple clients in a week or a day, you need a better system. Whether it’s Translation Office 3000 (not an affiliate link), a spreadsheet or even a whiteboard, make sure to have something in place.
  3. Buy a domain name and use it for your work e-mail. Your own domain name looks professional, and protects you against ever having to change your e-mail address again. You can also use whatever interface you want (i.e. Outlook, Gmail) to manage it.
  4. Put a percentage of every payment into a business savings account. I say “a percentage,” because it depends on your country and your tax bracket. But here in the US, let’s say at least 30% of every invoice if you just want to cover your taxes, and probably 40% if you also want to establish a paid vacation fund in order to pay yourself when you take time off. In a higher tax situation, say if you live in the European Union, you might be looking at more like 50% just to cover taxes and social charges. But the point being, don’t get caught short at tax time with no way to pay what you owe.
  5. Investigate retirement account options. Again, a little vague, but that’s on purpose. Put it this way: although one of the nice things about freelancing is that you can potentially work into your older years if you want or need to, don’t depend on that. I have an individual 401K through Charles Schwab that I’m quite happy with (and it has very high contribution limits, allowing you to put away a lot of money tax-free), but there are lots of other options out there: Roth IRAs, SEPs, etc.
  6. Investigate whether it’s worth incorporating. If you live in the US and are a sole proprietor (non-incorporated self-employed person), self-employment tax is a big hit. Essentially, you pay some taxes as if you are the employER and the employEE. Incorporating can allow you to legally avoid paying self-employment tax on some of your income, and can also give you some liability protection. Downside: having to file payroll taxes and a separate tax return for the corporation, depending on the corporate structure that you use.
  7. Use a professional e-mail signature. An e-mail signature (the few lines of text that get pasted at the bottom of every e-mail you send) is a very basic marketing tool, and also helps people know who you are. Here’s mine:–
    Corinne McKay, CT
    ATA-certified French to English translator
    http://www.translatewrite.com (professional site)
    http://www.thoughtsontranslation.com (blog)
    http://speakingoftranslation.com (podcast)
    303-499-9622

    Even if you have a very basic signature, like “English to Japanese translator,” it’s worthwhile. But overdoing it can be worse than nothing: the original convention was 4 lines, and I’ve clearly broken that rule, but definitely do not double the length of a typical e-mail with your signature.

Any other basic tips out there?

16 Responses to “Basic business things every freelancer should do (right now)”
  1. Jennifer Bader February 21, 2014
  2. Sylvia Smith February 21, 2014
  3. Kevin Hendzel (@Kevin_Hendzel) February 21, 2014
  4. Moira Monney February 21, 2014
  5. Your Good Words February 21, 2014
  6. patenttranslator February 22, 2014
  7. Rikke February 22, 2014
  8. ciclistatraduttore February 24, 2014
  9. Carolyn Yohn February 26, 2014
  10. Brenda L. Galván February 26, 2014
  11. Darcy Ferris March 4, 2014
  12. Silvia DAmico March 7, 2014

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