The Business Side of Things

[Elizabeth Ann West]

I just wanted to start a post about how we each run our [i]writing business[/i]. I can't say that my methods are the best, but I thought I would share them so others could give me feedback, perhaps use some of my ideas, and also post their own unique ideas.

First, I use two accounting systems. I have a system (in a spreadsheet, with a worksheet for each month) that tracks my writing. I keep track of what I write, how long it took, where it is posted or customer it is personally for, how much it is listed for, and when does it actually sell. This is actually done in a double booking manner, meaning an article enters in when it is written, and posted, and then entered again once it sells. The reason I do this is because I read that for tax purposes, you cannot claim "business bad debt" on writing that does not sell to it's original requester unless you count revenue the second you invoice the piece. I will be seeking more advice on this issue by a licensed tax professional prior to filing my taxes next year, but in the meantime I think I have myself covered.

The second accounting system I use is also in a spreadsheet, and simply tracks my net receipts (after C-C and Paypal take their cut), and expenses. I keep track of my mileage to and from the library (50.5 cents a mile in 2008), and dates and where I purchased itemz, plus the items purchased just in case I should misplace a receipt. I only use proceeds from writing though to further my writing career. I used this year's profits so far to purchase an All-in-one printing machine so I can scan, fax, copy, and print. All I had before was a $20 bubble jet that printed pages off center, and not in clear crisp ink.

Since I have a tendency to be distracted by shiny things (or items on sale), I run all of my purchases through my husband, and have instututed a 2 week waiting period on the purchase of major equipment and goods. We actually disagreed on the "need" for an all-in-one, but I overruled him since my next goal is to start tightening up my "premium" articles that have not sold, take them down and submit to print magazines. I certainly can't send manuscripts with blurry ink and off center printing, and printing them at an office store is really an unnecessary expense.

The only other thing I can think of that I use is index cards for brainstorms. Each article idea I get goes on it's own index card including website resources (initial sources, but not necessarily primary sources), and tucked into this purple plastic index card holder. I also include any "hooks" or interesting phrases I can think of at the time. Then when I am bored and have nothing to write on, or my current piece has irritated me and needs a time out, I pull out an index card and go. It's kinda like writting Russian roulette, I never know what I will pull out. This way I can still satisfy my scheduled writing hours for the day, even if I don't finish an article.

Those are only a few of the business side things I have worked on. I admit, many of them work for me, and may not work for other writers. Any other ideas for the business side of things?

[Celeste Stewart]

I learned a lot about running a business from my old boss. One technique that has served me well is the "daily budget." At my old job, we had a team of about 20 technicians who did all of the work as far as bringing in the money. The rest of us were involved in sales, marketing, and administration.

Yes, we all worked too, but these technicians were held accountable to a daily budget. Each tech had to complete at least $1000 per day worth of billable sales. This figure took into account everything from payroll for the entire company to inventory to supplies to rent to gas to advertising to insurance to training to whatever.

While each technician made a respectable hourly wage, they had to bring in far more in order to keep the company afloat. A tech bringing in $500 per day more than paid for his own salary but fell short productivity wise. Having a daily budget gave them a figure that they needed to reach. They knew that they could not spend all day on one $200 job. It helped them to manage their time.

Each day, we'd look at each tech's productivity. Did they hit their daily budget? This gave us a daily pulse of the company's health. We knew a good month when we saw one and could see a bad one coming long before the final sales figures were tallied. We could also set sales goals for the year and take steps toward meeting them (and measure whether we were succeeding or not). Techs that couldn't produce didn't last too long.

I've taken this daily budget and applied it to my own writing business. I have a yearly sales goal that I want to earn. This figure takes into account my expenses and tax liabilities as well as what I could get in the corporate world. I figured out how many working days I have in a year. Simple math gave me a daily figure that I target.

By having this figure, I know when I'm carrying my weight toward the goal or not. It also gives me a specific target to accomplish each day. If I fall short on Monday, I can try to make it up on Tuesday. THis helps me in many ways including managing how much time I spend on my projects. I know I can't spend all day writing a single $50 article - not if I want to reach my daily budget.

I'm not necessarily strict about it - if I feel like spending all day writing a $50 article or even one that I doubt will ever sell but that I want to write, I can do so. I just don't do it every day or I'd never make my yearly goal.

[Elizabeth Ann West]

Wow Celeste, that's a pretty awesome system. I never really thought about a daily productive goal. I can see how that would be vital to a home based business (there are SO many other distractions).

So far I only had monthly sales goals. Maybe I will start with weekly sales goals, and go from there.

[Celeste Stewart]

It's nice because it keeps you focused. And it's not overwhelming doing it one day at a time. If you get off track for a day or two, you can make adjustments and get back on track - or let it go knowing that one or two days of slacking off won't throw you off balance too much.

I do it with a dollar figure in mind but you can easily do it with a word count or article count instead. For example, if you know that one out of three of your articles sells right away and you want to sell one article a day, then your daily article budget would be three articles.

[Elizabeth Ann West]

Because I know others do read this, but may no reply.

I wanted to share something I did today. I can't guarantee this is available in every area, but I think most major U.S. cities should offer something like it.

I visited the South Carolina Small Business Development Center today and received a ton of good information. Plus, it was all free. This center is run by the government, and answers questions about business license needs (many states are passing legislation that requires people conducting business over the Internet to possess a business license, and to pay sales tax on goods purchased or sold). Thankfully, the county I live in only requires me to register my business with the state, and I don't have to pay sales tax on my writing, but any purchases of business supplies online that I do not pay sales tax on I have to pay SC sales tax on at the end of the year, or make regular payment online to the office of revenue. Failure to do so on my part, and if I am audited, could mean pretty hefty penalties.

While that information is extremely specific to my business and my area, I am sure others can find free small business resources in their area which might help with questions about taxes, licenses, and fees. I also received my very own business counselor, and she is willing to meet with me monthly for the first year to keep me honest about my goals etc. There are additional resources available if you are a woman or minority, as these centers frequently offer networking opportunities.

Just thought I would share.... sharing is caring LOL