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In this issue of Ask FreelanceSwitch, we look at incorporation and working with family. Ask FreelanceSwitch is a regular column here that allows us to help beginners get a grip on freelancing. If you have a question about freelancing that you want answered, send an email to askfreelanceswitch@gmail.com.
If you are just getting started, is it too early to incorporate your business? If yes, when is a good time to incorporate?
I actually incorporated fairly early for a freelancer ? about two years after I started freelancing full-time. My reasons for incorporation were based on having a few other things going on than straight up freelancing (including bringing in subcontractors). For many freelancers, incorporation is something that can be put off indefinitely.
Incorporation means that you?re going to need to pay out money every year to maintain your corporate status, pay extra money to your tax preparer and spend time on extra paperwork.
I?d generally wait until a CPA or other business advisor says that you really need to incorporate: you do get benefits if you might otherwise be liable for a problem, but I?ve only heard of a handful of cases where freelancers faced such issues. Generally, we can get by without incorporation.
I have a degree in graphic design, however since I’ve been teaching for 15 years, 3 years ago I decided to focus on the teaching. Since I really enjoy designing, I design for my school and help out a friend who freelances.
Here’s my bind. I borrowed some money from my sister and we agreed that I would pay her back through design work which at the time seemed pretty straight-forward and simple. You are, obviously, laughing at my last point.
I adore designing websites. I have my system, my rules, my ideas backed-up with theory (most of this thanks to you guys). But all I get are NOs. No images, not that font, not that template, not that name for those links, no, no, no. I feel just heartbroken because I care for my sister and her business partners and I really want the project to work and for them to have an awesome website. It’s starting to take affect me, because I have to take time from my weekend to work on this and spend less time with my daughter.
I’ve basically had to design the site 3 times, and we are now finally at a point where we are almost done. What is really hard for me is that they have asked everyone for their opinions, even conducted surveys, seems like everyone else’s opinions are more important than mine.
So to sum up, here’s my question: What is the best way to tell someone you care about that clients really need to have a clear vision of what they want and that designers deserve respect because they have studied and worked at their trade? I love my sister and maintaining a great relationship is very important.
I?d be wary of trying to draw a line in the sand on this project. Your relationship with your sister could take some damage, at the very least. It may be better to just get the project done and get out. If the important thing to you is maintaining your relationship with your sister, biting your tongue may truly be the best option.
If you feel that your sister can take the truth, I?d suggest writing out your sense of the situation. You can frame it as a set of suggestions for your sister?s business for future creative projects if you want to tread lightly. But if you were dealing with a client who you aren?t related to, you would still need to write out everything. That?s because you need to be very clear on what you want to share with a client and you can?t count on being able to communicate effectively in person once you get emotional about a situation.
I have to say that I?ve had a lot of bad experiences with working with families. I flat out don?t do it anymore. That colors my recommendations, I?m sure. But working with someone who remembers all the ridiculous things you did when you were little is much harder than working with a client you?ve never met before.
I?m not saying that your sister (or any other relative) automatically can?t respect you, but she?s going to think that she already knows what you think and she?s going to remember plenty of times that you were wrong. That?s why I just won?t take on a project from a relative anymore.
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If you know me, you know I love a good study. And I found the findings in the 2012 Oriella PR Network Global Digital Journalism Study to be fascinating.
Titled The Influence Game: How News is Sourced and Managed Today, the study shows the deepening penetration of digital and social media into all areas of newsgathering and production.
The study was conducted in April and May of this year and surveyed 613 journalists who work for a variety of different media outlets (from broadcast to blogs) in the following countries: Brazil, Canada, China, France, Germany, Italy, the Netherlands, New Zealand, Portugal, Russia, Spain, Sweden, Thailand, Vietnam, the U.K., and the U.S. On average, 38 journalists were surveyed in each country.
The study found that journalists in Asia, Brazil, and Russia had a sunnier outlook on their news organization than those living in Western Europe and North America.
This year the study found that 12% of respondents globally believed their publication would go belly up, down from 21% last year. Check out how individual countries and regions fared when asked the question of falling (or growing) revenues:
Falling Revenues:
On a more upbeat note, journalists in Russia, Brazil, and China seem to be doing great. Advertising revenue, audience, and editorial staffing is all up in these countries. According to this study, the BRIC countries of Brazil, Russia, India, and China will experience double-digit growth in ad spending during 2012. France will see a scant 2% and the U.K. will see 3.4%.
Under half of respondents globally said their biggest audience was online as opposed to nearly 60% in 2009. When you break it down into specific countries, it looks a little different. While 48% of the respondents globally said that their audience was offline (meaning they consumed news using the ?traditional? print/broadcast format) the following countries had very different results:
Percent of offline readership:
Last year?s survey found that just under half of respondents used Twitter for sourcing stories and 35% used Facebook. This year found that 54% of respondents use these social media outlets (and other similar sites depending on the country) if the source is trusted by the journalist. Forty-four percent said they used blogs to source angles for new stories.
Journalists in North America use these sources for their stories more than journalists in the rest of the world. In Russia, 90% of respondents said they used microblogging for news sourcing.
But this paints a picture of trusted social media sources only. When asked about unfamiliar sources, journalists were more hesitant to trust them?26% of respondents worldwide said they would use microblogs from sources they didn?t know.
Here is some interesting data on where journalists worldwide turn when researching a story:
I love infographics! It?s a great way to illustrate data in a creative way. This year?s study found a huge interest worldwide in the use of infographics as a story-telling tool. The majority of respondents reported that their organization used in-house developed infographics (22%) as opposed to the percentage that used externally-developed infographics (17%). Adoption of this mode of story-telling is highest in Russia and China.
What people are offering for online content has changed drastically, too. The prevalence of offering TV and video clips has fallen dramatically in 2012 from about 48% to 23%. Twitter channels, which shot up from 40% to 55% between 2010 and 2011 has seen a decline to about 45% in 2012. Organizations that have a presence on Facebook and Google+ have grown in 2012, as has the ownership of a mobile app.
For the first time, this study asked journalists to report what they used for digital media on a personal level. The U.S. and Russia were the countries with the most journalist-bloggers, clocking in at 69% and 72% respectively. In Germany, only 24% of respondents had a personal blog while Portugal reported 41%, Spain 42%, the U.K. 47%, and France 48%.
North American journalists led the way with the most personal Twitter handles at over 80% with Europeans coming in at just under 50%. Personal Google+ pages had North American respondents in the lead at just under 60% with the rest of the respondents in the 20% to 26% range.
When it comes to the overall impact of digital media in journalism, this study shows that the answer is generally positive. Globally, 37% of respondents agreed that the quality of their title?s output had improved. This year, 34% of the journalists surveyed globally said they enjoyed the job more than last year. Unfortunately, this is a decrease from the 2011 data, which found the percentage of people who enjoyed their job more than the previous year to be 44. Perhaps this means there will be more freelancers on the market come 2013?
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If you?ve been a solo freelancer for any significant stretch of time, you?ve probably learned the hard way that a work project can go horribly wrong. They turn out to be life lessons in the long run, but there are ways to protect yourself.
Working with bad projects or bad clients generally boils down to mismatched expectations and inadequate communication. Your best safeguard is to make sure you and your client are on the same page before any work has even begun using a Terms of Service Agreement, which essentially puts into clear, written language what you expect from your client and what they should expect from you.
By submitting a comprehensive Terms of Service Agreement to your client beforehand and having them return confirmation to agree to abide by your terms, you will be saving yourself (and your client) a lot of headaches down the road and avoiding the kind of surprises that can cause a project to get derailed.
1. Billing structure. What are your rates? Do you bill by the hour or by the project? This is important because it?s usually one of the first three questions a new client will ask. Agree with the client what a final estimate includes and what will happen if changes are requested beyond the scope of the initial parameters of the project.
2. Late payment. Determine the grace period within which a client can submit their payment after the invoicing date. The standard practice is 30 days, but you can determine this according to your particular company. Also spell out late fees and/or interest rates for late payments. This will give incentive to your clients to pay their invoices sooner than later.
3. Interim charge caps. I?ve known too many freelancers that have rung up large invoices for major projects adding up to thousands of dollars only to be shafted by deadbeat clients who walk away with your hard work. If you?re working on a major project or are doing several smaller projects for one client that add up to major charges, put a cap on how much outstanding debt the client can carry.
I personally put a $500 cap on my clients so that when their total bill exceeds that amount, they will need to make an interim payment to bring it under or face work suspension. This will prevent clients from promising lots of high-paying business without delivering on their word. This is paramount when it comes to new clients, even those referred by people you trust.
You have the option to waive this cap if you have a long-standing relationship with a trusted client who pays on time and in full.
4. Scheduling. Can you service your clients twenty-four hours a day? Weekends? Holidays? You need to have a balanced life, which means you need to set hours that make sense with your lifestyle. Set appropriate hours when your clients can contact you and expect you to work. If you don?t want to be woken by a panicking client at one in the morning, tell them specifically at what time your shop closes.
5. No spec work allowed. This is a controversial subject among many freelancers and prospective clients. The consensus for most is not to accept work on spec. Speculative work involves doing actual work with the hopes of impressing the client enough that they will provide further opportunities without any guarantee of payment or that you will retain rights over the work if it isn’t paid for. It is bad practice to allow for this type of work with the extremely rare exception of once-in-a-lifetime opportunities. Your time and talent are precious and shouldn?t be doled out for free under any circumstance. Spell it out in the agreement: no spec work.
6. Termination of services by client. If you?re a writer or a designer or another creative professional and you?re submitting a first draft to a client and they are unsatisfied and want to end the project then and there saying something to the effect that your work does not meet their needs, they may be looking to get out of paying for the time you spent already, or worse, intending to steal your ideas for free. An honest client will pay for your time and move on to another freelancer. Otherwise, you?ve effectively just worked for spec and received a rejection. Set a minimum rate for work done that is immediately refused and where the client does not wish to allow you to continue.
It should be stipulated that work that is refused by the client cannot be used in whole or in part. This may or may not be respected, but can be actionable as long as the client has agreed to this term and then subsequently violated it.
7. Ownership rights. Establish who owns the work after it has been completed and what rights the owner has to use or modify the final product. You may also want to consider retaining rights to utilize the work in a repertoire or portfolio for future promotion while the client retains all other major usage rights.
8. Unforeseen or sudden termination of a project. Most freelancers work on their own, so if some mishap, illness or accident occurs that makes it impossible to continue a project in progress, the client needs to know what protections they have. You may have to associate yourself with a backup freelancer who will agree to take over. Otherwise, you can make a provision where files or assets for a project are turned over to the client to be continued by someone else and billed for the work done up to that point.
Whatever you decide, let the client understand that however unlikely, hiring a single freelancer has certain risks and that there will be some compensation or provision made in case of a stoppage.
Most clients will act in good faith, so keep an open mind and be willing to negotiate in instances where there is disagreement. But by explicitly setting the terms in advance, potential disputes can be avoided and you can focus on what?s most important: doing great work.
Note: A few times a month we revisit some of our reader?s favorite posts from throughout the history of FreelanceSwitch. This article by Gary Horsman was first published June 12th, 2008, yet is just as relevant and full of useful information today.
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