Pinning a Value on Your Time

Writers, like other artists, often have a hard time when it comes to pricing their work. With visual artists, it’s a difficult prospect because a project may take hours and hours of grueling work before its completed. If they charged an hourly rate, their work would be overpriced in the market place. Instead, many just take a wild guess and figure that if someone wants one of their pieces bad enough, they’ll pay whatever it takes to get it.

As a writer, on the other hand, if you produced one copy of a book, for example, and charged what it took in time to produce it, no one would buy it. But as a writer, you have an advantage. You have to ability to produce multiple copies of a work or get paid by a publishing company for them to do so. Artists who have adopted this same business model are doing significantly better than those that don’t.

Still, how do you figure out what your time is worth? The first thing you have to remember is that you’re in business. And as such you have overhead—the cost of utilities, including phone and the Internet, office supplies, postage, food, transportation, insurance, equipment, clothing, etc. All that adds up! And before you can make any profit, you have to be able to pay for it all.

There’s no guess work involved when figuring out what your hourly rate should be. It’s simple mathematics. First, you add up all your regular monthly expenses, then you factor in the cost of extras, such as buying replacement equipment. If you can’t wait to get the latest smartphone, then you’ll have to add in that cost to the mix. You can’t leave anything out.

Next, you need to divide your total monthly expenditures by four in order to get the amount you spend per week. By dividing this by seven, you’ll find out what you spend per day—even on days when you’re not actually working.

If you work the standard 40 hours—not necessarily 8 hours per day—then you should divide your weekly total by 40. Let’s say your monthly expenses come to approximately $1,600, then your weekly expenses would be about $400. Dividing that by 40 hours gives you an hourly rate of $10. But that doesn’t allow for any profit, so you must add on an equal amount or higher to make sure you’re getting enough to cover your expenses and make a profit.

However, you won’t necessarily be working steadily as you would in a salaried position. Instead, you may work more one week than in another. Generally, money won’t be flowing in regularly. So it’s a good idea to make your hourly rate slightly higher to cover the times when you may not have any work. In the beginning, you can possibly shoot for a lower rate, increasing it as you gain more experience and more complex assignments.

While you probably won’t ever get your hourly rate, at least you’ll be able to judge if what you’re getting paid is enough for the time you put into your work. You may also want to consider establishing a minimum rate for writing projects. But don’t make that rate too high or you’ll be cutting yourself out of some easy jobs that overall will net a higher profit.

While you won’t have much control when it comes to be paid by editors of magazines and newspapers—essentially, they generally tell you what they’ll pay you—you still need to know if what they’re paying is enough for the time you put in on a project.

Many freelance writers make the mistake of putting in the same amount of work on each article they write and then get paid a different amount for each piece. But unlike products produced by other businesses, no one piece of writing brings in the same amount from different publications. You may get paid $300 from one publication and $50 from another for exactly the same piece. Also, some editors may only pay a pittance but ask for a lot more work. It’s only by knowing your hourly rate that will enable you to decide it what they’re offering is enough for you.

Tips for Writer/Agent Negotiations

Okay, you’ve decided that you just can’t be successful as a writer unless you have a literary agent representing you. You’ve found one, but just because you're excited someone wants to represent you doesn't mean you should let them take advantage of you. You still must watch out for your own interests. Not all agents are as professional as they should be. Before you sign on the dotted line, be sure to follow these tips while you’re negotiating your contract.

First, find a reputable agent. You’re first thought is: Aren’t all agents reputable. The simple answer is no. Reputable agents generally don’t require payments of any kind when you sign a contract with them for their services. They also don’t charge fees to read your work. And they don’t sell your work to vanity presses. But most importantly, they’ll readily share with you the names of other authors and projects they’ve represented.

Reputable agents don’t charge excessive commissions. Today, the standard is 15 percent for book sales, although you could pay up to 20–25 percent for foreign sales, and 10–20 percent for movie, TV and theatrical sales.

Most reputable agents won’t try to cash in on your speaking fees—they really aren’t entitled to, unless they were directly responsible for getting you the engagement.

Control your agent-related expenses. Ideally your agent won’t charge you for making one or two copies or standard postage, but only for unusual expenses, such as large numbers of copies and priority mail, express or courier services. You agent should work within spending limits that you set and not spend anything over a fixed amount, say $100–$250, without your approval.

Some agents demand that publishers pay them your entire book advance directly, then they’ll send you your share. In most cases, a publisher will send you your 85 percent and the rest to your agent to cover your commission fee. The first incidence can pose a risk. If your agent gets paid your entire advance and then goes bankrupt, you’ll get nothing. Insist that your publisher pay you the entire advance directly, then you pay your agent.

Although most publishers still report and pay royalties semi-annually, typically within three months after the semi-annual period ends—the check for the royalty for a book sold in January will be paid in late September. If your agent insists on receiving all monies owed to you by the publisher, he or she should pay you promptly upon receiving the funds—ideally within 10 days, but no longer than 30.

Above all, you should expect your agent to be honest in their dealings with you., but don’t take that for granted.

How Much Should You Sacrifice for Writing?

No matter how you look at it, writing whether full-time or part-time requires you to make sacrifices. These may be just little things like skipping your favorite T.V. show to getting up at the crack of dawn to going into thrifty mode and cutting way down on expenses. You may choose to do just one of these or you may be forced to do all three. And sacrifices don’t come easy.

Skipping your favorite T.V. show is easy. You may be lucky enough to have the technology to record your program to view at a later time. That also means you’re probably paying your phone/Internet or cable provider a hefty fee for the privilege.

If you’re still working at a full-time job, then you may have to create time to write by getting up before the chickens. While that may sound like a good idea in theory and it may work for a short while, the stress on your body from not getting enough sleep will eventually catch up to you. To be able to rise before dawn means you should probably go to bed at sunset.  That means that you’ll most likely be doing so right after dinner—not good for your digestion.

Lastly, you can cut back on your expenses—or better yet, put yourself on a strict, but reasonable, budget. Doing so will do two things. It will take the stress off of you to work long hours to pay bills that are higher than they should be. And it will help simplify your life. While this may work well if you’re single, it probably won’t work if you have a family. Those little mouths beg to be fed—a lot.

But controlling your expenses doesn’t have to be a severe sacrifice. First list all the expenses you can’t do without, such as housing, food, temperature control, transportation, food, etc. Then list all the expenses that are extra luxuries. This will be a subjective exercise because what’s a luxury to one person may be a necessity to another. While you may not want to give up your Starbucks coffee, you could switch to a less expensive coffee shop. But if you can’t give up the former, build it into your budget.

If you go to the movies once a week, consider getting a T.V. control box that will let you stream movies and T.V. shows from such outlets as Netflix, Hulu, or HBO. You can watch a whole lot more movies and such for the small amount per month that they charge.

A big expense is transportation. Consider driving less or buying a compact car that gets really good mileage and costs a lot less to maintain. You really don’t need an SUV or a van, even if you have a couple of kids. You can also take public transit if it’s convenient for you. Also, shop around for less expensive auto insurance that will give you the coverage you already have. Combining homeowner’s and auto insurance will allow you to get discounts.

Shop for clothes at less expensive retail outlets—skip the mall and department stores. You may even want to buy some of your clothes at local thrift shops. Chances are you’ll find some excellent brand-name items for a whole lot less. Sporting an L.L. Bean shirt that you purchased for $5 is a lot better than buying it new from the source for $50 or $60. Clothes from this retailer are made to last, so even used ones will be fine for a long while.

Cut back on eating out. “Cutting back” is the key here. Eating other than at home will be a treat if you do it once in a while. Also, keep your eye peeled for coupons and enroll in rewards programs. Not only will you get a free-bee once in a while, but you’ll also be privy to special promotions and discounts. Cook larger batches of food and freeze them in meal-sized portions. Not only will this save you money, it will also provide delicious prepared food when you’re too tired to cook.

Skip the gym but don’t skip the exercise. Work out at home. Invest in dumbbells or just do bodyweight exercises. You can also search YouTube for exercise videos. Or do the easiest exercise of all—walk around your neighborhood.

If you put your mind to it, you’ll find plenty of ways to save a buck or two. And before you know it, your life will be a lot less stressful, plus you’ll be enjoying yourself more as you find time and energy to write more.

Budgeting for Success

Freelance writing is one part creative skill and one part business sense. The only problem is that too many writers who get into this business don’t have much of the latter. Unfortunately, this came from what most learned in school—albeit subconsciously.

Writing has always been looked upon as an intellectual endeavor. Therefore, it shouldn’t be tied in any way to business. But when you’re in business to make money, having a bit of business sense is a prime concern. And if you’re going to make money in this business—at least enough to live on—then you have to know what’s coming in and what’s going out. If these aren’t relatively balanced, you’ll be out of business sooner than you think.

To keep tabs on your finances, you’ll need to create a budget based on what you’re spending now and what you predict you’ll spend in the not too distant future. The best way to do this is to create a budget sheet for each month for at least six months. Doing so will let you know if you’re going down the right marketing path and making enough money to cover your expenses. Once you know how much you can afford to spend based on your earnings, you’ll be able to take control of your finances. If you're always coming out in the red, you’ll find it easier to change your work patterns once you're faced with the actual figures.

One of the best ways to start budgeting is to faithfully record the details on your budget sheet. After you've recorded these for a month or two, you'll have a better idea of what sums to enter in your budget for the month. At the end of the year, add them up and divide by 12, putting the resulting figure in the proper slot, even though you may pay some bills quarterly, semiannually, or annually. With an accurate monthly record, you'll be able to more easily adopt counter measures if your receipts aren't tallying with your expenditures.

Lay out your budget sheet like this: Divide it into three columns.

The first lists your sources of income for that month, your uncontrollable expenses, and your net income (the first minus the second). Under that, list your regular expenses—mortgage or rent, gasoline, equipment, office supplies, utilities, travel, etc—and the their totals. At the bottom, create a line for profit or loss.

The second column lists the predicted and the actual amounts in each category in the first column.

The third column lists the predicted and actual totals for the year to date.

A budget sheet faithfully kept will show clearly where your problems lie. Are expenses in one category heavier than you imagined? Is disaster looming around the corner if you continue to work for a specific market? Where and how can you cut down on expenses? Will you have to negotiate for a higher fee from your best client? Should you aim for more sales volume? Do you need to consider getting a part-time job? Are you paying too much rent? Are you billing properly? Has your inventory of stories and ideas been turned over quickly enough?

Obviously, this budget sheet, too, needs to be balanced monthly. Be sure you carry over the figures on the following month's sheet where indicated. To accurately record figures on this sheet, you'll have to tally up those petty-cash slips you've collected. Keeping an account of each expense as it occurs will help you tremendously in following a budget plan.

Count in the current inflation rate when you're setting up your future budget pages, saving yourself from too many unpleasant surprises when new costs arise. For instance, is your phone/Internet plan slated to increase next year? What about your health insurance premium?

By keeping an accurate tally of your income and expenses, you’ll be able to tell when you may possibly be getting into hot water. If you don’t, you may find yourself reaching for that life preserver all too soon.

Are You Breaking Even?

As a freelance writer, you need to be aware of your finances or you won’t last long. Part of that is knowing your break-even point. This figure gives you a sense of how much you must make under certain conditions to cover your cost of operating with no loss, and unfortunately, no profit. It is  not really a place to stop, though. Breaking even, especially in these times, just isn't good enough.

So that you can move forward, you should do a break-even analysis which will allow you to consider the changes possible in your business—changes which might increase your profits or stop the drain on resources. To figure a break-even point, you must separate fixed costs—rent or mortgage, car payments, etc.—from variables.

Your break-even point is defined as that point where revenue equals cost. You need to separate expenses into fixed and variable costs. Fixed costs are those costs that remain constant over a short period of time. Variable costs are those costs that change proportionately to any changes in the volume of your business.

Dividing variable costs by sales revenue gives the portion of each sales dollar that is required to cover variable costs. This is known as the variable cost percentage. Subtracting this amount from a dollar will give you how much is left to cover fixed costs and profit, otherwise known as the profit-volume ratio. Since profit is zero at break-even, the division of the total fixed cost by the profit-volume ratio gives the dollar amount of sales required to cover all fixed costs.

Once you know this amount, you’ll need to do some income projections. Since you won’t be getting a weekly paycheck, you’ll need to know just how much work you’ll have to do per week, month, or quarter in order to reach your break-even point. In the beginning, you’ll probably project work for a month, but as you move forward, you may want to expand that to three months or a quarter.

List all work that you’ve lined up and add any other jobs that may appear once the quarter has started. Add up all the income you expect to receive, then subject the amount you figured above to cover fixed costs. This will leave the amount you need to cover variable costs.  If you come up short, figure how much and then find work to fill the void. If you don’t, you’ll have to carry over the shortfall to the next quarter.

When you get paid for each job, insert the amount to the right of the projected amount. At the end of the quarter, add up all the paid amounts to figure your actual income.

Payment in Advance

As a freelance writer, there aren’t many opportunities to get paid in advance. Book writing is about the only one.

The advance is the money a publisher pays you for the time and effort put into the writing of a book. Traditionally, the advance has been perceived as a loan made by the publisher to you to keep you alive and producing until the royalties from your book begin to come in—at which time the publisher will recoup his or her loan by withholding the amount of the advance from your share of the royalties.

The advance also reflects the book’s potential for sales. The better the potential, the bigger the advance. If the book has a smaller target readership, then the publisher will offer a lower advance. In this case, there’s no way you can live on just the advance while writing the book. It’s important to remember that during your negotiations.

In the case of many books, where the royalties don’t amount to as much as the advance, the advance serves as an out-right purchase price by the publisher. So it’s important to negotiate for an advance which represents either a fair return for your labor as a writer or the best return you can reasonably expect since you most probably won’t see any more money. When negotiating your advance, point out that the publisher is going to get a far better book if you’re free from money worries and can concentrate on your work.

Some publishers will tell you their advance is small because they expect to invest heavily in promoting the book and that, therefore, you’ll be money ahead in the long run if the contract promises larger than usual royalties to make up for the skimpy front money. But in reality, publishers aren’t doing much promotion today, especially small ones. That means you’ll be out begging people to buy your book just to make up the difference between your advance and your royalties.

Today, publishers sell many of their books wholesale to book distributors, so the royalties from them amount to only a fraction of what you’d receive from retail sales. And competition from the digital book market clouds the situation further.

Your publisher may try to recover all or part of your advance when, for any reason, he or she chooses not to issue a book. Yes, after all the work you put into your book, it just may not get published. Perhaps the market for that topic collapsed or there’s a downturn in the economy. This is clearly unfair if you have kept your part of the bargain faithfully. So, at a minimum, make sure that the language of the contract shelters you against recovery attempts. If you deliver your work on time in the form and content specified, you have every right to the advance money.

Book contracts can be very confusing. Make sure that there are no penalties for not meeting your deadline. So safeguard your advance by making sure the contractual deadline gives you enough time to meet all your obligations.

The book advance isn’t the only way you can finance your book project. You should also consider possible perks like expenses. How will you pay extra costs for travel, extensive research, artwork, photographs, charts, computer printouts, periodicals, books, photocopying, researchers, or secretarial help?

Your publisher will expect you to cover most of these expenses, so it's up to you to ask for help. Will the editor send you books for research that she has on hand? Ask for anything that would help. It can't hurt to try. But ask early. Realize there are limitations. Give your editor time to justify your expenses with the editorial board. Some publishers regularly agree to such arrangements with authors, others seldom if ever. And keep in mind that it's sometimes easier for an editor to justify such expenses as these than a more sizable advance, especially for new writers.

Bookkeeping Tips to Make Your Life a Little Easier

For many writers, bookkeeping can be a drudge. But there are ways to streamline it and make it easy enough that it won’t dominate your life.

No matter which of the three bookkeeping systems you choose—simple checkbook, single-entry journal, or the more complicated cash-disbursements journal—you’ll also need to have an easy way of filing  backup receipts. You should have something—receipt, invoice, canceled check or petty cash ticket—for every expense. Make sure before filing these receipts that they indicate all of the important information—date and amount paid, to whom paid, check number or cash payment. Keep these receipts for business expenses filed separately from any personal expenses. You can use one of those accordion files divided into 12 compartments—one for each month—or 12 envelopes or a box in which you store receipts in monthly bundles. Whichever way you choose, be consistent.

The first step in recording your expense receipts is a program like Expense Director from Iambic.com. This program allows you to record your expenses on your smartphone or personal assistant. Then you can sync the device you’re using to your computer to save and store your expense notations. After you record your expense amounts, place the receipts for that month in a box. Make sure to put a check mark on each receipt after you record it. At the end of the month, bundle that month’s receipts for storage.

A program like Expense Director allows you to create spreadsheets of monthly expenses easily and quickly. You can also sort your expenses so that you have all like expenses together. If you don’t have a spreadsheet program, get one. It comes in handy for lots of other records, too.

All funds received or disbursed from your freelancing business should pass through your business checkbook. Your monthly bank statement should be balanced against your receipts/disbursements spreadsheets, as well as verifying your checkbook balance.

Record all cash receipts in the proper column by category. If you're working part-time, you can keep the data in the same spreadsheet, but keep the receipts in a separate column. If you regularly receive rent or other such income from another source, separate those receipts also.

Record gross receipts and net receipts, if you have both, at the same time for more ease in figuring your taxes. Be accurate when you record figures across the page. They need to balance both horizontally and vertically. You’ll want to balance each page monthly, then record the balances on the balance spreadsheet.

You’ll find it handy to have a calculator with a printout tape. It’s also helpful as proof of balances during any tax audit. As you balance each page of your spreadsheet, you can file the tape with your backup material—receipts, invoices, petty cash tickets, etc.

If you’re following the above procedures, you’ll be able to check your accounts receivables each week which will let you know if you have any slow payers. You’ll also be able to check you accounts payables, your bills, to see if you can pay ahead to take advantage of any discounts.

And every month, you’ll need to post your income and expenses and balance your books. You’ll also need to prepare a profit and loss statement, balance your business checking account, balance and file any petty-cash receipts, and do anything to prepare for taxes. And one last thing: You’ll need to rebill any slow payers. Doing all of this should keep you on financial track.

Getting Paid What’s Due

It’s hard enough working as a freelancer, but add to that the frustration of not getting paid on time or not at all and it can become a nightmare. For most writers, bill collecting is a time-consuming and distracting endeavor. But in today’s economy it has become a fact of life. Just as the people you owe come after you if you haven’t paid your bills, so should you go after those who owe you.

Often you’ll see the signs early on. An editor fights with you for a few more dollars payment. Or perhaps he or she doesn’t let you know up front that the publication will be paying up to two months after publication. If you notice clues like this, it’s better to back away from this market because you’ll surely have problems down the line. But many writers hesitate to do that or to hassle their editors about payment for fear of losing the work.

Timely billing is the first step toward timely payment. Send an invoice with every piece you produce. Make sure that you put your Social Security number on it. Sure, everyone is telling you not to put your Social Security number on anything, but this is a bill and today, businesses use that number to identify you.

Also, make sure you state your terms of payment, unless otherwise arranged. It’s a good idea to ask an editor when the publication normally pays writers before you begin working for it. State on your invoice exactly how you want the check made out—John Doe or John Doe Communications, etc.

If you’ve incurred any expenses that you’ve previously discussed with the editor, include them on the invoice. Some editors ask that you bill them separately for expenses. Enclose copies of receipts if your editor requires them. If you’re sending your invoice by Email, scan your receipts and send image files of them. If sending by regular mail, send paper copies. If you invoice correctly and keep good records, you’ll find you can prevent problems from arising. Remember to keep copies of all your invoices. Mark those paid when you’re paid and keep an eye on those not paid as yet.

If you haven’t received payment when you expected it from an editor, send a pleasant Email reminder. Jog the editor's memory if a few weeks have gone by without payment. Editors get busy and many are  overworked and understaffed. Your invoice may have gotten misplaced. If you receive no answer within 10 days after this reminder, however, the editor may be ignoring you.

A firmer letter, sent by regular mail, should remind the editor that you met your obligations and you request that he meet his or hers. If you receive no response from this, then call the editor on the phone to find out what’s going on.

If none of these tactics work, then you can resort to charging interest on unpaid accounts over 30, 60, or 90 days, just as you’re charged if you're delinquent in paying your bills. While you may not receive the additional amounts, you'll get a businesslike message across.

If all else fails, you can always take the publication to small claims court. Depending on how much you’re owed, this can be more of a hassle for you than just admitting defeat and claiming the unpaid amount on your income tax. If an editor contacts you and tells you that the publication is having problems, back off a bit, but not too much. After all, you deserve to be paid for what you have done.

Generally, slow-paying markets don’t pay expenses. If you’re having problems collecting payment for the writing you’ve done for them, chances are they’re too strapped or cheap to pay for expenses.

10 Ways to Keep Your Bank Balance in Check

Thanksgiving Weekend always seems to be the time when people look for bargains, especially on Black Friday. But as a freelance writer you need to look for bargains all year long. The best way to stay ahead of your bank account is to follow these easy steps.

1. Try to keep a cash reserve in your account to cover the slow months. Use it only for this purpose and replenish it as soon as possible. An easy way not to overdraft your account is to make this cash reserve invisible. In other words, set your ending balance without taking it into account. So when you’re at zero, you’ll actually still have money in the bank. This allows you to not only keep some money aside but also to avoid those high overdraft fees.

2. Another way to keep your income safe is to open a special savings account and deposit all your income in it. Then transfer funds to your checking account as you need them to pay bills. This method works especially well with a sporadic income flow.

3. To make bill paying more efficient, create a Bill Pay Sheet. At the top list all the months in two rows. Under them, list your regular monthly bills set up in categories—mortgage or rent, utilities, credit cards, insurance, etc. Next to each bill listing put the date due in parentheses, followed by the amount you need to pay that month. You can then add up all your bills to see how much you’ll need that month. Cross out each bill as you pay it to keep yourself on track.

4. Synchronize your accounts receivable with accounts payable as much as you can by your early planning method. Know when you’re supposed to be paid, and if you don’t receive payment within a day or two of that date, let your editor know.

5. Apply for credit with your suppliers. If you’re on friendly terms, ask to pay on a periodic basis, if need be, especially if you have established a good credit rating. Explain that your income arrives in spurts instead of on a regular weekly, biweekly, or monthly basis if this is the case. Some suppliers may be willing to bill you on a two-,three-, or four-month basis—allowing you a discount if you pay early. Talk this over with them, explaining it saves them billing and postage costs. Another possibility is to open credit accounts that allow you to pay in three-month or six-month installments with no interest if paid within the allotted time. This works well with car and dental care.

6. Slash expenses to the bone. You can only cut corners so far. But a close analysis of your budget may uncover frills that you can do without briefly without hurting your professional stance. You’ll be amazed how much you can cut your budget and still live a healthy and happy life. Doing this will not only make you more efficient, but will make you the envy of your friends.

7. You might be able to apply for a short-term bank loan for your business, but chances are no bank will loan you the money. Banks are in business to make money, so unless you’re borrowing $50,000 or more, the usual minimum for a small business loan, you’re out of luck. You might want to check credit unions you, your spouse, or other family members may belong to. A last ditch effort may be to borrow some money to hold you over from a family member or friend—this normally isn’t a good idea, however.

8. Join forces and share some of your expenses.  Get together with other local writers or even friends to share services.

9. Take a temporary part-time job. If you do work part-time, try to work at a job that is somewhat related to your writing or the subject matter that you write about. This way, you won’t be wasting your creative energies.

10. You might try applying for a grant. This, like a bank loan, is a slim possibility. Remember, while there are loads of grants out there, unless you can meet their requirements, they might as well not exist. And if you do apply for a grant, be sure to follow the instructions to the letter. If you don’t, you’ll surely be rejected. 

Tools of the Trade

Back in the good ole days—were they really as good as everyone thinks—writers used quill pens, then pens of other sorts and paper to put down their thoughts. Eventually, the typewriter appeared. This invention made work for writers like Mark Twain, one of the first to own one, much easier.

The standard typewriter dominated the writer’s tool kit until the mid-20th century. Soon the old hunt and peck model became electrified, enabling writers to work faster because its powered keys required a lighter touch.

Just when the electric typewriter—the IBM Selectric, with its rotating and interchangeable font ball, topped the list—the electronic typewriter, with its computer-like keyboard appeared. Writers wondered how life could get any better.

Well, it did. With the invention of the personal computer, writers’ productivity increased tenfold. Not only were the keyboard keys extremely light to the touch, but also this machine could store documents for future use and reworking. Editing, formerly a long and laborious process of marking up printed papers, soon achieved great speed through copy and paste techniques.

Over the past 25-30 years of my writing career, I’ve seen and tried them all. I entered my career with a big, old, black, clunky Remington typewriter, followed shortly thereafter by a sleek Corona portable. I hated typing. Each character required so much effort. For a while I rented an IBM Selectric and fell in love with it. After my first article sold to Popular Mechanics Magazine, I took the money and bought myself a Brother Electronic typewriter. This was even better than the IBM I had been using.

But in 1989, that all changed for me, for that’s when I entered the Computer Age. My first, a generic IBM compatible XT clone, seemed like something out of the far future. My productivity took a quantum leap. After that, I purchased a new desktop about every three years—my attic is literally a virtual museum of computing. I also purchased a Tandy portable wordprocessor that helped me to tackle notetaking on the go. I added several laptops to the mix, plus a computer just for my photographic work. And that’s only the hardware.

Along with all the various computers came a myriad of software—wordprocessors, spreadsheet programs, photo editing programs, you name it. I felt as if I was on a Tilt-a-Whirl at times. No sooner did I learn a program, then a new version came out, eventually making my work even more productive.

And that’s the key—productivity. As a writer, it’s imperative to keep up with the latest technology, the tools of your trade. While you don’t have to purchase the latest and greatest computers or software, you should have examples of each that make your work easier. If you’re still writing on a legal pad, then it’s time to make the leap.

To give you an idea of what you could be doing, let’s jump to the present. I no longer go to computer stores to buy equipment. Instead, I purchase lease-back, refurbished Dell desktops, complete with a later version of Windows, from Computer-Show.com. I’ve purchased four of these powerful systems from them for about $300 each and love each one. Since I began with computers that used floppy disks and newer computers today don’t have them, I make sure that my systems all have them. In addition, I also have CD and DVD players and writers that make my systems truly multimedia.

My laptops are all the same make and model IBMs. This allows me to use them and their accessories interchangeably. I do lectures and seminars as part of my work and these allow me lots of flexibility.

Software is a big part of my writers tool kit. Corel WordPerfect X-4, the latest version, is the cornerstone. It allows me to work and read files in both WordPerfect and that other nasty program, Microsoft Word. I also use Dragon Naturally Speaking, a speech-to-text program that helps me take notes from books and convert my handwritten notes to digitized text.  Using these programs, I was able to produce two books of over 100,000 words, each in 10 weeks. With my old systems and programs, that would have been impossible.

Other programs, like Iambic’s ExpenseDirector, incorporated into my Palm Pilot, allow me to keep records of all my expenses—a true boon at tax time. A program called Paperport allows me to use my computer and scanner as a copy machine. And either Corel WordPerfect or Adobe Acrobat allow me to convert my manuscripts to PDF files for producing e-books.

As a freelance writer, I’m both a writer and a business person. I’ve set my office and tools up with care so that my productive capacity is as high as it can be. And high productivity using the best tools you can afford equals higher profits.

Controlling What Comes In vs. What Goes Out

Let’s face it, unless you’ve just written a best seller and have sold the movie rights to it, you won’t make a whole lot freelancing. That’s the truth and there’s no getting away from it. So to maximize your profits, you have to control your expenses—and not just your business expenses.

To set up a good system to control your overhead, you should take a look at how other small business do it. The first, and most important, thing to do is to keep careful records of what you spend on every item and review the figures regularly. Keep an eye out for bargains and buy in bulk at a discount when you can. Use credit wisely—but don’t become dependent on it. Create a budget and stick to it. And lastly, update your equipment when you can afford to. In other words, put some money back into your business.

You'll want to measure your success against the cost of it to see where you can cut corners and still maintain your needed writing routine. While the latest and greatest computer and phone equipment might be nice and will impress your friends, neither is necessary to conduct your freelance business. In fact, you may not want to buy the latest computer with the latest operating system.

For example, let’s say you have some programs that you know how to use well. It’s likely that if you upgrade to the latest Windows, for instance, those programs will no longer work on your system. You’ll have to go out and buy new ones or new versions of the old ones and that takes money. Plus, you’ll have to take the time to learn the new programs and that takes time and time is money. The same applies to your phone. If you have to have a cell phone, then consider a prepay plan like Tracfone that will enable to you to keep your costs in line and not give you another bill to pay every month.

How you handle the basic, materials of your trade is a matter too important to ignore. However the thought process may begin, you’ll soon find yourself composing and refining your thoughts on paper. Perhaps you’ll begin in longhand on a legal pad. Or maybe you’ll go directly to your computer and compose on the screen. Keep an eye on how you use paper. Do you really have to use fresh sheets for your notes? Why not print out your notes on the used pieces of paper? Likewise, do you need to buy special note pads or can you employ the backs of used envelopes to jot down memos or to-do lists? This may sound frugal, but it does save money. And while you’re at it, why not reuse those large envelopes in which you get other mail. Of course, in all cases, the envelopes shouldn’t have more than an address and return address on them, both of which you can cover over with labels and new addresses. To reseal them, buy some clear shipping tape.

You'll be dollars ahead if you study religiously every tip that comes your way regarding items you can get for less or, better still, for free. Know what you need and be on the lookout for sales. For example, you know you’ll need to buy additional print cartridges for your printer, so why not buy them from a discount house like LD Products and take advantage of their occasional sales and free shipping on weekends.

When you need office supplies, don’t make a beeline for your nearest Staples or Office Max. Instead, check online first and keep an eye peeled for sales of printing paper at your local supermarket when school begins in September and at drug retailers like Walgreens.

Today, you don’t even have to buy books new. There are plenty of places to buy used copies, both online and at book sales. And don’t forget that you can still borrow them from your local library, and they won’t cost you a dime unless you return them late.

Look at each item on your budget, including food and utilities, and examine alternatives. Can you use another service, such as UPS, in place of the U.S. Mail and save money? You don’t have to spend hours clipping coupons to get bargains.

Also, consider how you do your research. Technology in general has enabled people to spend far less for communications. Not so long ago, you would have had to pay hefty long-distance charges to interview someone across country—and even worse, within your state. Today, most phone companies, both cell and land line services, offer package plans that include long distance—one amount for all services per month. While before you would have had to keep a phone log of each call, today you needn’t worry about it. Instead, you can deduct a portion of your phone bill for your business.

You can even conduct interviews or get the information you need by E-mail. An advantage to using E-mail is it enables you to send the questions you want to ask ahead, so that your interviewee can prepare, resulting in a more productive interview. It also enables those who speak English as a second language to get an assistant to send you the answers to your questions in clear English, so there will be no misunderstandings.

Finally, you’ll need to record your expenses so you can interpret them as you go. There are a number of programs that allow you to do this. Try to find one that will let you record each expense right after you pay for it, then will let you compile all your expenses for tax purposes.  Splash Money from www.iambic.com is one such program that works with smartphones, tablets, laptop and desktop computers.