Over the past weekend I have decided to move forward with forming an LLC (Limited Liability Corporation) for my design business Art Space. Currently I have a sole proprietorship and I got to thinking of the liability I now have with my business these days, especially now that I host several client websites, shopping carts and emails, plus my business is growing with larger clients. With an LLC established, this protects my personal assets such as my home and personal finances and keeps that out of the business.
With a corporation in place, you take the risk out of personal liability if your business were to get sued or go under. I highly recommend talking with an attorney and do this for your business.
For those that only do basic freelance, it would be a good idea to at least take out liability insurance. You can contact your local insurance agent and they can provide fairly low cost solutions for liability insurance. This could also be attached to your homeowners insurance too.
I also recommend downloading LittleSnitch. This software is great for protecting your privacy and private data from being sent out. I use this on my Mac and you would not believe how many websites and software you have connects to your computer every hour.
That’s the very question your clients ask themselves. There are free templates online, and YouTube videos for just about everything. So, they ask themselves, why hire you? The same thing goes for taxes. The Internal Revenue Service (IRS) offers free publications to assist with filing taxes. You can buy tax software at an office supply store or use a web-based application at a much cheaper price than hiring a certified public accountant (CPA). The decision to hire a CPA depends on your budget, the issues that surround your taxes and how much you earn.
Your Budget
CPAs charge a flat fee or an hourly rate to prepare and file your taxes. The fee is determined by the number of forms they have to prepare on your behalf, the number of records they have to sort through, such as bank statements, receipts and invoices, and the deductions you’re seeking. For example, if you’re a freelancer who needs to file Form 1040 and report 1099 income, then you’re going to pay less for services than a web design company with part-time employees and business partners. Either way, the starting flat fee is over $100 and hourly rates start at $80 per hour. Tax preparation software costs less. You can purchase desktop software or utilize web based software to handle your freelance or business related filings for as low as $20.
Tax Issues
Each creative professional has unique tax issues that they bring to the table. This includes:
Level of business activity
Deductions that apply to your creative business
Past taxes owed
The more complicated your tax issues, the more you can expect to pay for CPA services or tax preparation software. Some software applications are limited and you may not be able to use them if your tax issues are complex. You may not want to rely on software if your assets are substantial or if you have outstanding tax debt. The fees you pay for a CPA in those instances will spare you legal headaches down the road.
Your Earnings
Protecting your assets and keeping more of the money you earn is the key to running a small business. You could experience more success as a business owner if you focus on your net profits more than your gross income. That means being strategic about taxes, and the strategies change when you earn more money. The reason is that you may have access to different deductions which will reduce your tax liability. If you don’t take advantage of the deductions available to you, then you could pay more taxes that you need to. Worst case scenario, you could end up owing taxes. Hiring a CPA might be a better option to save you money, and keep you out of trouble with the IRS. If you try to do-it-yourself using a software application and at the end of the process it shows that you owe taxes, then you should at least consider the option of hiring a CPA to evaluate your situation.
Whatever your decision, don’t wait until the last minute to take care of your taxes. Rushing your decision can lead to costly mistakes. Tax filing deadlines are the same every year. Be proactive and schedule a deadline, such as in January, to prepare and file your taxes.
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One option for launching your own business or if you want to work for yourself is to get freelance work. Living the freelance life can be a rewarding choice, but it’s very competitive. Many freelancers compete for the same jobs, and it can be difficult to get hired. The challenge gets even more difficult if you have little or no experience for the work you want to do. If you’re up to the challenge, you can find work. It will take persistence and knowledge of where to look.
Be Persistent
You are among many who thrive on the freedom of being your own boss. There are freelancers who you’ll be competing with, who have many years of experience and client references to match. You cannot afford to be anything less than persistent if you want to get freelance work. For example, you should look for and apply for as many jobs as possible. It will help you to improve on the entire application process, such as writing cover letters and following up with potential employers. You’ll also have more job offers as a result. If you apply for only a few jobs, you’ll get fewer job offers. Fear of rejection is a real issue that you may be confronting, but it’s something you have to deal with and overcome. Think about your goals of working for yourself, and the freedom that awaits you and your family instead of the pain of not getting hired.
Know Where to Look
There are many online and offline companies that cater to the freelance community. You can take advantage many of them for free, while you’ll have to pay to utilize other resources. There’s a mix of great websites, books and other resources that post jobs or list companies that hire freelancers, and scam companies that will take your money and you won’t see one job out of it. Knowing where to look for legitimate opportunities is half the battle in applying for freelance work. Here are some tips for where to look for your next job:
Avoid bidding sites because they often cost more than what you’ll earn in the long run
Network offline with colleagues, friends and local business owners
Find jobs on specialized job boards, such as ones that cater to the creative community
Build relationships with marketing and advertising managers
Check the careers section of websites that you come across in your line of work
Contact website owners and introduce yourself
Enter search keywords in the major search engines, such as “hire freelance web designer” or “hire freelance graphic designer”
Check Craigslist.org, but only respond to jobs that include an official website to avoid scammers
You have to be targeted in your approach to help you be consistent in looking for jobs. If you cast your net too wide or if you have no plan at all, you may become sloppy in your approach to applying for jobs.
Working hard on persistence and finding the right places to get freelance work should put you in a great position to get hired. If you don’t see the results you need, then ask a friend, colleague or expert to review your resume and cover letters. You may need to improve those to stand out in the crowd of freelancers who are applying for the same jobs.
