Productivity

Aug 21 2013
Corinne McKay

Keeping your freelance finances in order

Disclaimer: I’m not an accountant or an attorney; these are just some tips from my own experience and what works for me in my freelance business. Managing your freelance finances is a) time-consuming and b) absolutely critical to your survival as a freelancer. So, it’s worth taking some time to consider whether you’re optimally managing your money. And those of you who are more financially oriented than I am, please chime in in the comments.

Before you do anything else, separate your business and personal finances. Even if you do business as a sole proprietor (meaning that you are not incorporated), open a separate checking account that you use only for business purposes.
People use various accounting tools and processes, but at the very least, track your total freelance income for the year. Every time a client pays you, enter that amount into something (a spreadsheet, QuickBooks, Translation Office 3000, etc) so that you have a running total of how much you have earned.
Always, always have a savings cushion, especially if you are your (or your family’s) only income. Freelancing has its highs and lows; some months go like gangbusters and other months drip along. Big clients may unexpectedly change their plans or hire an in-house translator. And if you (or a family member) are too sick to work for an extended period, you’re left without income unless you have disability insurance. So don’t let yourself live paycheck to paycheck. Keep at least 3-6 months’ living expenses on hand in cash at all times.
Track your total outstanding invoices. For me, this is a big one. Of course you’re going to record your outstanding invoices so that you know whether clients have paid you or not, but you also want to know how much money you should be receiving in the next 30-60 days. This statistic will tell you how aggressive you need to be about looking for or accepting new projects. For example, let’s say that your income goal is $7,000 per month. Every time you issue an invoice, you enter it into an Excel file with a column that totals your outstanding invoices, so that you know how much money clients owe you. So for example if your outstanding invoices only total $5,000, you know that the next month is going to be lean unless you take on a lot more work. But if your outstanding invoices total $9,000, you know that you can afford (at least from the financial point of view) to be choosier about the work that you take on, to work on some non-paying tasks such as updating your website or marketing to higher-paying clients.
Track your business expenses. The easiest way to do this is by using a debit or credit card associated with your business bank account. That way, you don’t have to comb through your records at the end of the year, wondering whether that trip to the office supply store was for home or for work.
Establish a business savings account. Another big one: at the very least, you need to set money aside for taxes. Depending on your situation and your tax bracket, this could be anywhere from 25-50% of what you earn. Every time a client pays me, I deposit the check in my business checking account and then immediately transfer 40% to my business savings account so that I am never in a bind when tax time rolls around. And also…
Use your business savings account as a paid vacation fund. Freelancing doesn’t have many downsides, but one of them is no paid vacation. So, provide yourself with a good quality of life by having a paid vacation fund. For example, if you want to take off 4 weeks per year and work 48 weeks, start by putting $100 a week into your paid vacation fund. Then you’ll have $4,800 to “pay” yourself during your month off.
Have some sort of retirement plan. My accountant likes to say that “Everyone has a retirement plan. Either you’re saving for retirement or you’re planning to work until you drop.” Retirement strategies are really diverse, and they depend a lot on your expenses, how long you plan to work, if you have kids and how old you’ll be when they leave home, and so on. Plus the not insignificant question of how long you’re going to live. But whatever you do, have some kind of plan in place.
Set money aside for professional development and (why not) bonuses. It amazes me how many translators spend absolutely nothing on professional development and then wonder why their businesses are stagnating. In order to stay current in our industry, you have to keep your skills, knowledge and contact base current. Meaning that you have to learn new things. Take webinars, read books, do teleconferences, attend in-person conferences, join the Chamber of Commerce. But set aside at least 5% of what you make for professional development. And, if you have a good year, you really deserve a bonus. I once had a boss who left $50 in everyone’s mailbox on the last day before winter break; a manageable amount for the company, and an amount that everyone was excited to go and blow on something fun over the holidays. Consider earmarking some “fun money” for yourself, getting a new technology toy or treating your most valuable colleagues to a good meal at the end of the year!

Other ideas??

Jun 11 2013
Corinne McKay

A couple of freelance tips

Every now and again, I feel inspired to post a random freelance tip on my Twitter feed. I could say that these are Zen master-esque pearls of wisdom that distill in my mind over the course of a few years, but they’re more like out-of-left-field thoughts that come to me while I’m washing the dishes or folding laundry. Here are two for today; feel free to add a comment with your thoughts on them!

The freelance startup phase: give it time, or pick another business.

One of the most common laments I hear from beginning freelancers is that it’s taking so long to develop a solid client base. “So long” could be defined as anywhere from a month to the better part of a year, depending on the person’s situation. First, I tell the discouraged beginners that for the first year and a half that I was freelancing–a time during which I had planned to work very part-time or not at all, since I had just had a baby–I wondered almost every day if I would be better off getting a full-time job. After about 18 months, I still wasn’t earning a ton of money, but it was enough that I felt encouraged to stay the course. It took about three years of freelancing until I got to the point where I no longer considered the option of returning to full-time work for someone else. Looking back, that was a long three years. But here’s the thing: now, after almost 11 years of freelancing, there is no way that I could replace my freelance income if I worked at an in-house job, especially if I looked for something with similar hours and flexibility. Partially this has to do with location: if I lived in a major East Coast city, there might be in-house jobs that pay more than what I make freelancing and offer generous vacation. But in groovy college towns in the foothills of the Rockies: no way.

If you need quick money–and there’s nothing wrong with that…haven’t we all been there?–pick another business. Another mom from my daughter’s school recently told me that she was in that situation, and although she’s bilingual, in a marketable language, she started a housecleaning business. Within three months, she was bringing in a full-time income. Is the work intellectually stimulating, or creative, or self-directed? Probably not so much. But if you need a source of income ASAP, cleaning houses or walking dogs is a much better option than starting a freelance language business. And I don’t mean that in a derogatory way, since my fantasy sideline career is to become a service dog trainer!

Well-paying work is out there if you look for it. But most people don’t look for it; they wait for it to find them, and meanwhile they complain.

I’m not sure how much explaining this one needs: it’s all right there. Yes, our industry has its share of low-paying work and bottom-feeding clients. In addition, as freelancers we often take that aspect of the industry very personally, as if it’s a reflection of our personal worth. For more on that, see Walt Kania’s insightful post Charge what you’re worth? Please, no on The Freelancery.

But here’s the thing. There is so much well-paying work out there; even clients who are looking to pay high rates to someone who does a really good job. But those clients are too busy with their own work to comb the web looking for you. Maybe they don’t even know that you exist. Seriously: when I interviewed Joanne Archambault about how to find direct clients at industry conferences, she commented that a lot of her clients said that they never knew that someone like her existed, although they desperately needed her. You can go find those high-paying clients at their industry conferences; you can send them postcards; you can give webinars for them; you can write articles for their industry newsletters. But you cannot wait for them to find you, and meanwhile complain about the bottom-feeders and non-payers. It’s tough love, but there you go.

May 14 2013
Corinne McKay

Regaining control of your e-mail: filtering

As I mentioned a few weeks ago, I’m developing a new presentation on time management for translators. I presented the “beta” version at the Colorado Translators Association‘s recent mid-year conference and I think it went well; big thanks to everyone who responded to my time management survey which provided an excellent starting point for the presentation!

Time management is such a huge and subjective topic that I’m not sure I can write just one blog post about it. So I thought I would break the idea down into specific tips that might be easier to digest. Here’s one: take back control of your e-mail by mercilessly unsubscribing and filtering, so that you (try to) limit your inbox to messages that you need to read as soon as you receive them.

All of us receive countless notification e-mails every day: someone added you as a LinkedIn contact; someone mentioned you on Twitter; Groupon has a great offer for you; someone in your neighborhood needs a dog sitter. You may not want to stop receiving these e-mails entirely, but you need to stop them from interrupting your actual work. So, do this: the next time you read an e-mail and delete it without taking any further action, make a change. If you’re no longer interested in receiving that type of e-mail at all, unsubscribe. If you want to keep receiving it but you don’t need to read it right away, create a filter. I use the Gmail interface to read my domain name e-mail, and I make heavy use of the “Bypass the inbox” filtering feature. So let’s say that I signed up for an e-newsletter from a potential client because I want to learn more about their business. The first time I receive an e-mail from them:

-I click on the dropdown arrow on the right side of the message window, next to the Reply arrow
-Then I select “Filter messages like this”
-I enter the aspect that I want to filter on (sender, subject line, etc.), then click “Create filter with this search”
-Then I select or create a folder for those e-mails to go to; for example “Marketing research”
-Then, most importantly, I tick the “Skip the Inbox (Archive it)” box. The message will still be marked as unread, but it will go automatically to the designated folder. For example I currently have 497 unread messages from my neighborhood e-mail list in the folder I created for them. Basically that’s 497 messages that didn’t end up in my Inbox, and that I can read when/if I want to.

I’m sure that other e-mail applications have similar features; whatever program you use, make sure that you learn how to use filters so that you can focus on time-sensitive messages in your Inbox.

Apr 02 2013
Corinne McKay

Unplugging: why and how

I’m a big believer in taking at least one unplugged vacation per year: no computer, no work phone. I think that it’s important for a few reasons. Such as:

Work gets a lot of my undivided attention when I’m not on vacation, and my family needs and deserves some undivided attention too.
The mental break always helps me feel invigorated about my current work, and always gives me new perspectives on my work-related goals for the future.
It keeps me from developing an inflated sense of my own importance. If I start to feel that my clients really cannot live without me for a week, I’m the one with the problem.
It forces me to plan financially for the time off; I use my business savings account to pay myself for the time that I take off work.
I recognize that my energy, enthusiasm, creativity and probably other qualities are not infinitely renewable. I could work 50 hours a week, 51 weeks a year, but I don’t think that my current productivity level would last long. Everyone does what works for them, and for me, about 30 hours a week, 46 weeks a year is what’s sustainable.

Unplugged vacations might not be the norm these days, but even people who are actually important (as opposed to those of us who only fancy ourselves as important) think they’re worth considering. Here’s an interesting article in Harvard Business Review, which discusses the advantages of completely unplugging versus plugging in at scheduled times. And this article on CareerCast argues that unplugged vacations not only don’t hurt your career prospects, they actually help them.

So, now that you’re convinced (!), how do you do this? First, you pick a vacation destination that helps you, or even forces you, to unplug. As in, you don’t go to New York City and tell yourself that you’ll just leave your cell phone in the hotel room. You do something like go mountain bike camping in Utah, where there’s no cell reception anyway. Then, you find at least one trusted colleague who is available while you’re away. You send a pre-emptive e-mail to all of your clients and to the colleagues who regularly refer work to you, and you say something like:

Dear clients and colleagues: my office will be closed for vacation from X until Y, and I will not have access to e-mail or phone messages during this time. For urgent translations, please contact my trusted colleague (insert name and contact information). Otherwise I will respond to you as soon as possible when I return.

Note that if you truly want to unplug, you do not say that clients can call your cell phone if they need to reach you urgently. Nor do you leave them totally hanging and unable to get an urgent translation completed if they need one. You let them know that you are checking out completely, and you tell them who to contact while you’re away.

Finally, you put on your e-mail auto-responder and change your outgoing voicemail message, with something similar to the e-mail above. You clearly state that you are unavailable, and you provide a referral right there in the auto-response.

Then you go; you just do it. Put the office in the rear view mirror and enjoy your vacation. While you’re away, spend a little time making your peace with the fact that you may miss some work. You may even miss a really awesome project that you would have gladly interrupted the vacation for, had you known about it. That’s the reality of a week off the grid, but it’s a small price to pay for the renewed energy and enthusiasm you’ll have when you return. Because while you’re away, you’ll have a moment like this, and all of the missed work will be worth it!

Mar 12 2013
Corinne McKay

Why do some freelance translators fail?

I’m not a great “tough love” advice-dispenser, but I’m going to give it a try. I work with a lot of beginning translators in my online course (shameless self-promo: the next session starts on April 3 and there are four spots left!). When I follow up with students over the months and years after they finish the course, or when I talk to beginning/aspiring translators in general, some of them have “made it” as freelancers and some of them haven’t. In thinking about advice for translation newcomers and translation students, I’ve unscientifically identified a few pitfalls that can cause serious problems for people who are in the freelance launch phase. I’m sure that readers have great tips and anecdotes too…so feel free to add them!

Expecting too much return from too little marketing effort. I get a lot of inquiries from beginning freelancers who are “very discouraged because they’ve applied to over 30 translation companies and received no work.” I know I’ve said this a few (hundred) times before, but here it is again: during my first year as a freelancer, I applied to over 400 translation companies. Then, I sent every single company that responded positively a hand-written note with a business card, thanking them for their response and letting them know that I looked forward to working with them in the future.
Expecting the startup phase to be shorter than it is. I think that six months is the bare minimum that anyone can expect–two months to look for work, two months to do the work and two months to get paid. A year is probably more realistic, and I think that most freelancers reach “cruising speed” after about three years.
Having weak language skills. As often stated by Chris Durban, author of The Prosperous Translator, it’s hard to develop the linguistic and cultural competence that a translator needs, without spending at least a year in your source language country/ies. And don’t hang out with speakers of your target language the whole time you’re there!
Not putting yourself out there. I get it: you’re not good with strangers, you don’t want creepy exes finding your address online, and so forth. But the simple truth of freelancing is that people cannot hire you if they cannot find you. They can’t refer work to you if they don’t know who you are. So whether it’s in person or online, or preferably both, you have to come out of hiding.
Getting stuck on the low rate treadmill. This is a tough one. Most beginning translators don’t set out to be underpaid, but working is better than not working, and you have to start somewhere if you want to break in to the industry. Many beginning freelancers tell themselves that in a few months or years, they’ll trade up to better-paying clients. But if you’re translating 10 hours a day just to pay the bills, it’s hard to find that time, so you’re more likely to stick with the low-paying bird in the hand.
Remaining in denial about how much work it is to be self-employed. A wise self-employed person once said that being an entrepreneur means working 60 hours a week for yourself so that you don’t have to work 40 hours a week for someone else. I’m a firm believer in avoiding perpetual overtime, but the essence of this statement is true. I recently gave a talk on self-publishing, after which many of the attendees commented that the idea sounded intriguing, but “like a lot of work.” Um…yeah! It is a lot of work, but I’m more interested in putting that work into my own project than into lining a traditional publisher’s pockets. The same is true of being a freelancer. It’s a lot of work! Did we mention that it’s a lot of work? But the ability to make your own decisions and take responsibility for your own future makes it worth it.

Wise readers, over to you! Why do you think some beginning translators don’t make it?