Wearing My “Entrepreneur” Hat

Let’s say I’m comfortable with two of my three hats as a small business owner: technician and manager. After all these years, I have a pretty firm hold on the creative side of my business. I love writing, editing, coaching, and teaching; and I think I’ve gotten pretty good at them. While my least favorite hat is that of manager, if I’m going to stay in business, I have to wear it and master all that it implies. I continue to work hard on getting that hat to fit. That leaves Hat #3 — entrepreneur.

David E. Gerber, author of The E-Myth Revisited, describes the entrepreneur as the visionary, the dreamer, and the catalyst for change. In other words, this is the part of us that grows our businesses and sees opportunities. That sounds great, but what does it mean? Well, the “growing the business” part is fairly straightforward. When I’m finished with the project I’m working on, if I haven’t filled the pipeline, I won’t have another project to do. Of course, there is always the element of luck or fate or whatever makes the phone ring when I haven’t done a thing to make it ring.

That happened a lot in the beginning, and I never really knew why. Someone would call and offer me a freelance opportunity. The good news was I had lots of work; the bad news was I didn’t understand what it took to find that work. The magic word was marketing, which, to me, was mysterious and scary.

Like so many small business owners, I muddled through for years until I met a marketing expert who sat me down and taught me the basics … and I mean basics. My friend and marketing guru, Bobette Kyle, has years of experience and a master’s degree in marketing. If she talked nonstop for a year, she couldn’t begin to tell me what she knows; but she has told me enough to make me downright happy to wear my entrepreneur hat. What I once approached with trepidation, I now enjoy and look forward to doing.

What about the “seeing opportunities” part? I would also describe that as the ability to reinvent oneself when necessary. I’ve had to do that many times in the past two decades. When I first started freelancing, I wrote a great many articles for corporate publications. That was an extension of what I had been doing for years and probably would have continued doing if all those corporate magazines and newsletters in St. Louis hadn’t ceased publication. OK, if I didn’t write articles, what would I do? Well, if I put on my entrepreneur hat, I would ask myself what are the needs in the market? And what are the opportunities? The answers determine how I would reinvent myself this time.

If you don’t like change, this idea will not have much appeal. In that case, you aren’t going to like wearing the entrepreneur hat. Fortunately, that hat fits me very well these days.

Biz Basics for Writers

I just found some notes from a presentation I did a while ago for a group of aspiring writers. I shared the stage with my accountant, Jonathan Becker, CPA. The notes, taken in my particular brand of shorthand, are filled with great advice for owners of “creative” small businesses. That definitely includes freelance writers. The suggestions are still relevant, so I’m going to pass them along without embellishment.

• Bill by the hour. Bill for every single hour you put into your business.
• If a client isn’t willing to pay you for what you do, you probably don’t want that client anyway.
• When you raise your rates, don’t grandfather your old clients. If you do, you will begin the resent them.
• There’s a rule in accounting that every three years you should dump the bottom 20 percent of your client list.
• When you figure your hourly rate make it three times your expected or hoped-for income. Add to that 40 percent for what it costs to run the business. Divide that figure by 2,080 hours (working hours in a year), and that is what your hourly rate should be.
• Set up your books. Get help from your accountant if you need it.
• Creative people need to know how to reconcile a checkbook.
• Creative people should have a feel for what’s going on inside your business.
• If you’ve been business for two or three years and are going nowhere, it may be time to look for a job.

How to set up your business entity:

• Sole proprietor (on your own and doing business)
• LLC (Limited Liability Corporation limits your personal and family exposure) Set up your LLC with an attorney, and register with the Missouri Dept. of Revenue.
• Add umbrella protection to your homeowner’s policy.

Income tax:

• Fifty percent of incomes goes to taxes.
  
• Deduct anything that pertains to your business: Internet access, website, magazine subscriptions, supplies, equipment, consultants, accountants, attorneys, and so on.
• Any items deducted reduce taxes by 50 percent.
  
• Work with your accountant on what to deduct.
  
• The IRS does very little auditing at the small business level.

Marketing:

• Get on TV or radio to talk about what you know.
• Follow up on every lead.
• Return phone calls that day.
• Respond to e-mails.
• Identify your market. Network. Join groups.

Basic? Yes? Important to your financial success? Also yes.