1. Keep records of everything, and I mean everything…from the beginning
Whether you like to write things down in a notebook or you are more technical and have a spreadsheet, you need to keep records from the receipt you get after setting up your site, to the first few dollars you receive from affiliate marketing or selling your own products.
Don’t leave anything out. Treating your writing as a business from the get-go will save you many headaches later.
I love Google Docs and Spreadsheets but my Mac’s Numbers software keeps everything neat and tidy for me. Once tax season is near, TurboTax is what I usually use. Even if you have an accountant take care of your taxes, keep meticulous records.
Track records of phone and email conversations with clients. I have a submissions track sheet I made with Google Docs that lists publication, editor, submission date, publication date, invoice number and date it’s sent, receipt of pay, ect. You can take download a copy of mine from my resource library. Simply sign up for my newsletter and get the password.
I group invoices by category and year in folders. Notes with reminders and conversations of clients also go into this folder.
I use an editorial calendar to keep track of blog posts, newsletters, and product launches. When I’m writing fiction, I use Scrivener’s word count tracker and divide the story I’m working on into weeks and days with specific tasks to complete.
Get a specific credit card for all business transactions. This is huge in keeping track of expenditures at the end of the year.
2. Get a Business License or Tax ID Number
Using an EIN (Employee Identification Number) makes me feel a lot safer than giving out my social security number to everyone. Checking with your local courthouse to see what type of other business licenses you need can save you trouble in the long run. Getting an LLC can help protect you should you have problems with vendors, clients or employees of your own.
You’ll need to know if your state requires you to charge sales tax one ebooks, courses or other tangible goods. Make sure you check on this before you launch your first product. If you do have to collect a sales tax, determine that information into your sales platform where you’re selling your product. Some platforms do it for you, but don’t assume they will.
If you’re in the US, a good resource is the Small Business Administration for your state.
3. Registering Your Business Name
Whether you are doing business as a sole proprietor, an LLC, check to see if your business name has already been registered before you fill out paperwork, buy a domain or send out that newsletter will save you some embarrassment and frustration. Your local SBA or your local Chamber of Commerce will be your best bet in securing your business name.
Once you decide on a name, do a basic domain search and see if it’s available. As for the type of business you choose (sole proprietorship, LLC, S-Corp etc.), this is up to you. Many bloggers and small online business owners choose to operate as a sole proprietor, (this is what I am) many go the LLC route and some set up as an S-Corp or get incorporated. Do what fits you. If you have a specific logo, registering it as your brand is also a good idea. Don’t wait till someone else does.
The main benefit of something other than a sole proprietorship is that if anyone sues you, your personal assets may be more protected than they are if you’re a sole proprietor. However, it costs more with becoming an LLC. Ask an accountant or lawyer to help you decide. Starting out, you may not need an LLC. You can always look into that as you grow.
4. Get a business address
The first time I tried to send out a newsletter with MailChimp, it wanted my home address. I almost passed out. You’ll be asked for a business address in many places, and if you’re like me, I don’t want to give that out to everyone. Having an address other than your home address is a good idea. I simply use a P. O. Box. For less than $100 a year, it’s worth my privacy and soundness of mind.
Make sure your business address is a physical location where you can collect mail. If you plan on building an email list (a must-have these days), by law, you’ll need to include this address in each email.
5. Set up a business bank account and a PayPal Account
Getting paid through PayPal is painless and super easy. I feel safer giving out this information rather than my banking information. But don’t mix your personal account with your business. It may be a pain to set up a business account and cost a little more depending on where you live but keeping things separate is a wise move.
It takes time to verify your accounts with Paypal, so don’t put it off. Becoming a “verified member” helps you in the long run. We all want to get paid for the work we do. If not having a PayPal account is the only thing holding you back, what are you waiting for?
A few tips about PayPal:
- Make sure you link your PayPal account to your business checking account and not your personal account.
- Make transfers to my business checking account after reaching $100, don’t risk getting your money frozen.
- If you have your own products and run an affiliate program the Mass Payment feature is a huge time-saver when it’s time to pay your affiliates.
- You can get a PayPal debit card and use it like you would a normal debit card if it’s convenient. This is also helpful in keeping records.
6. Have a Budget and set Aside Income Tax Money
Setting aside a percentage of all income for income taxes as it comes in will keep you sane at the year of the year. This calculator can give you a general idea of what percentage you should save. It’s better to overestimate your taxes than underestimate them.
My motto is: save some, give some and spend some. There will be slow seasons, so creating a savings will help you suffer through those. Working at home and being your own boss is great until the paychecks slow down. Always prepare for a rainy day. The first year should give you some insight on what it will cost you to work at home. There are software needs, computer needs, office supplies, travel expenses, etc. Make a list of your expenses related to your income so you are prepared. Keeping track of everything you spend will help you to adjust your budget for future years.
7. Don’t Give up and Be Persistent
At the end of each year, I do a little self-inventory. What worked, which clients paid on time and were easy to work with, what products helped me the most, and what did I spend money on that I really didn’t need. Be ready to improve your business and let go of clients that are just not working for you. If you do a good job and are dependable, you’ll find people seeking you out. Always strive to go beyond expectations and don’t be afraid to take a few chances. Some jobs you’ll love, others you’ll know not to do those again.
If you have any questions about working at home or making a living writing, leave a comment or shoot me an email. I’ll be happy to help you if I can! Happy Writing.
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Also published on Medium.