I have a blog on b5media called Small Business Boomers.  To help out a friend on the network at HomeBizNotes,  I did a guest post on "Getting Paid."  Remember, there are only two things you need for a successful freelance writing business:

1.  Lots of clients

2.  Making sure they pay you

That’s about it. 

I was talking to a business owner and asked, "How much do you have in receivables?"  He said he had over $10,000, but it turned out he was talking about deposit money on writing work he was doing for people.

That’s not receivables. You get receivables when you do work for someone and don’t get paid right away. 

BTW, the rule to remember with receivables:  "The longer it’s a receivable, the less likely it is that you’ll receive it."

How do you handle receivables?  Do you require clients to pay you half when you start a writing assignment and the rest on delivery? 

If you require people to use credit cards and PayPal, you won’t have as many receivables.  To me, it’s better to pay a small percentage fee and be sure I get the money.

Financing Your Startup with Credit Cards.  A writer emailed me the other day and said she is having difficulty getting a loan to pay for her startup and working capital and she wondered if she should finance with credit cards.  My answer would be, “Only as a last resort and keep it to a minimum.”  Here is what I’d suggest:

§         Get vendor financing for big items like your computer and printer.  For example,   This financing is more texpens

§         Try to get a 0% introductory rate card with the lowest post-introductory rate.  Make sure the 0% also applies to ATM withdrawals.  Then WATCH to see when the intro rate stops and try to pay off the card before this happens.  Pay this card off FIRST if possible.

§         Go minimal, and I mean MINIMAL.  Buy only what you absolutely need.  Don’t get carried away with sales.  Have someone go with you when you are buying, if you have trouble with this.  You must keep your credit card balance as low as possible. 

§         Look for used equipment and furniture.  If possible, use your credit card for this stuff.  You may have to use the ATM if it’s a direct purchase from an individual; that’s why you need the 0% on the ATM withdrawals too.

§         After you start, use the card for working capital.  Work out a bill payment schedule for your business expenses.  And be sure to pay the minimum on the credit card each month.

§         Live simply.  Take out as little as possible for living expenses.  You did it for three plus years while you were in school; you can do it for a little longer.

§         Show positive cash flow as soon as possible.  Work to get to a position where you are consistently bringing in more in income than you are paying, every single month. 

After six months or a year, re-work your cash flow statement and take it to the bank to show them that you are consistently bringing in more money than you’re spending.  See if you can get them to give you a loan before your 0% introductory rate stops. 

If you can discipline yourself in the short term with this method, you’ll be in great shape in the long term, because you won’t have a huge amount of bank debt to pay back, and you can take your profits and plow them back into new furniture and other neat stuff as you go. 

Entrepreneur Magazine has a good article with some additional advice on this subject.  Here is the link:  http://www.entrepreneur.com/money/financing/financingcolumnistdavidnewton/article41520.html

If you are still considering a website to market yourself or your books, you need to talk to Kathy Hendershot-Hurd.  Kathy knows about web marketing, blogs, and websites.  She can help you avoid the mistakes most authors make in trying to market their books on the web. 

Kathy’s book Beyond Niche Marketing is a wonderful primer on the best ways to market your services, and her EasyAuthorWebsites blog can lead you in the right direction.  Read her information about fishing for customers; she knows what she’s talking about.

If you want a loan for your startup freelance writing business, you may be eligible for one of the SBA’s special loan programs:

1. Patriot Express loans for veterans

2. Rural Lender Advantage helps banks and other lenders in rural communities to encourage them to use SBA guarantees.  This program is currently limited to lenders in Colorado; North Dakota; South Dakota; Montana; Utah; and, Wyoming.  

If you go to your bank and you think one of these two "special treatment" qualifications applies to you, make sure the bank notes this on your SBA loan application. 

You never know what you can get until you ask.

If you don’t own a website to promote your freelance writing business, you should.  If you want to know why you should have a website, check out Beth Erickson’s newsletter (Writing, Etc.) for her latest issue. 

To set up your website, you will need:

1.  A web name (domain name, URL).  That is the text that comes after "http://www." and before ".com."  You come up with a name and check to see if it’s being used, then you register it.  I use Godaddy (www.godaddy.com) but there are many others out there.  It will cost you under $20 to register your domain for two years.

2.  You will need a host server (a computer that stores your site information and is connected to the Internet continuously).  You will pay a monthly rate that depends on the size of the storage, number of emails and web sites you want stored, and other features like blogging and photos.  Check out GoDaddy to see what’s available and then check out other hosting companies, including possibly a local host.  Do NOT use a free hosting service; they use "pop up" ads which will not be appreciated by your readers.

3.  You will need a design for  your website.  Consider getting a designer or using a template.  If you use a template, you will still need a web program like FrontPage or Dreamweaver.  And why would you want to fool around doing this when you could be making money writing or marketing?  Look on Elance.com or Rent-A-Coder.com for designers.

4.  Finally, you will need someone to maintain the site.  Even though you can put information on the site, all kinds of things can happen, and you need someone with technical knowlege to get things back in working order.  (Those darn spammers!). 

For a great one-stop package service for a web site, I’d suggest you contact Kathy Hendershot-Hurd.  Her service Acumen Web Services, has everything you need to get started with a web site, and at a reasonable price.

Next post:  The economics of blogging

If you want your writing business to succeed, there are only two things you need to do:

1.  Find clients.

2.  Get them to pay you.

I talked to a consulting client the other day.  She was frustrated because she started her business with lots of customers, but she was having trouble getting paid.  There are lots of reasons why people don’t pay:

• They don’t have the money
• They don’t have the money today
• They don’t think you’re worth it
• They don’t think the price is fair
• They think if they don’t pay, you’ll forget about them (HA!)

So how do you get paid?  Here are some tips for getting paid:

1.  Establish a process.  Decide as you start your writing business how you will handle payments.  Write up a payment policy.  Include processes for billing and collections. 

2. Get paid up front.  Ask for at least half in advance before  you begin a project.  Tell the person you will cheerfully refund the money if they are not satisfied.  (Then do it.)

3.  Follow up.  Don’t be afraid to keep after people about bills.  Start out with friendly in-person (or over-the-phone) reminders.  Put the reminders in writing; it’s good evidence if you have to take someone to court.

4.  Close your ears.  People have all kinds of stories about why they can’t pay right now.  Get your "Not My Problem" mantra going.  Business is business, and if someone contracts for your services, they need to settle up and pay. 

5.  Develop the relationship.  If you have a great relationship with a client, it will be difficult for them to tell  you they won’t or can’t pay.  Sometimes this backfires, if the client tries to use the relationship to wheedle you into accepting less or later.  But most of the time a good relationship encourages people to pay.

6.  Know when to quit.  Accept the fact that some people won’t pay, no matter what y ou do.  Cut your losses, quit working for that person, and don’t look back.  There are good paying people out there who would be happy to pay for your services.  Keep looking for them.

Elance

Here is the link:  www.elance.com/p/promo/win-virtual-assistant.html

If you are like me, you have put off the job of getting your finances in order for the end of the year.  Here are a couple of blog posts that might help:

Here is some information from Anne Wayman at The Golden Pencil

 Here is some financial cleanup information from my Small Business Boomers blog.

If you are like me, you probably have been putitng off doing your bookkeeping and financial stuff because you’re busy with writing assignments.  But you’ll need to do this before the end of the year. 

I wrote an article about this subject, with some helpful hints for organizing and recording your books.  You can read it here. 

Here is the beginning:

Five Steps to a Financial Recordkeeping System that works

As you start your new professional practice, you have lots to think about, including getting paying clients or patients, and making sure everything and everyone is working properly.  But don’t neglect the financial part of your new practice; if it isn’t working properly, you can’t be successful in your business. 

If you want to succeed, you’ll need to create a financial system that clears out the garbage and gives you accurate and useful information to see how you are doing and so you know when to act on this information.  Here are five easy steps in creating a simple financial recordkeeping system:  Capture, Check, Record, Review, Act: