IntroductionWelcome| 00:04 | If you're working in a creative field,
you will find yourself freelancing one or
| | 00:08 | more times during your career,
either by choice or by circumstance.
| | 00:12 | It's especially common in difficult
economic times when job stability is hard to find.
| | 00:17 | To earn more money and stay creative and
confident, you are going to need agility.
| | 00:22 | You may find yourself having to adapt
your working style to situations where
| | 00:25 | your skills and your talents are most valued.
| | 00:29 | Freelancing is an excellent
opportunity to be both creative and independent.
| | 00:34 | You can be both an artist and an entrepreneur.
| | 00:37 | It can be an incredible experience but
it's important to keep both feet on the
| | 00:41 | ground when planning this phase of your career.
| | 00:45 | In this course, I'll focus on being a
freelancer, dispel some myths and share
| | 00:50 | some realities that I
have learned along the way.
| | 00:54 | Finally, I will show you how to build
both sustainability and resilience, how
| | 00:59 | to make a short or a long term commitment to
freelancing, and how to make it work for you.
| | 01:05 | So let's get started with
Running a Design Business:
| | 01:08 | Freelancing.
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| Disclaimer| 00:01 | Okay, so here's the disclaimer:
| | 00:03 | I'm a designer and a professor, not a CPA.
| | 00:06 | I do however have many years of
experience as an employer, creative director, and
| | 00:11 | a small business owner.
| | 00:13 | I teach courses in creativity and
professional practice to graphic designers.
| | 00:19 | The information I present in this
course is not a substitute for the
| | 00:22 | personalized advice you will get
from an attorney or an accountant.
| | 00:27 | If you have questions regarding legal
or financial issues, you should seek the
| | 00:30 | services of an appropriate professional.
| | 00:33 | Bring the ideas and samples you take
away from this course as a basis for
| | 00:37 | discussion with your advisers.
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| Exercise files| 00:01 | I have included a number of
great resources for this course.
| | 00:04 | These documents can be found in the
Exercise Files tab on the Course Details
| | 00:09 | page for all Lynda.com subscribers; or
if you're watching this tutorial on a
| | 00:14 | DVD, the files have been included there.
| | 00:16 | I will be calling them
Resource Files throughout the course.
| | 00:20 | These files will include guidelines,
templates, and editable text files so you
| | 00:25 | could copy and paste some of the key
information directly into your own files.
| | 00:30 | These documents will be very
helpful to reference during the course.
| | 00:33 | They have been created to guide
the instruction when customizing the
| | 00:36 | materials for your needs.
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1. What Is a Freelancer?Definition of a freelancer| 00:01 | A freelancer is
essentially a one-person business.
| | 00:04 | A person who primarily works on a
particular part or phase of a larger project.
| | 00:10 | They often maintain anonymity as they
provide a necessary component, such as a
| | 00:14 | series of spot illustrations
or an extra hand in production.
| | 00:19 | For the purposes of this course, I
will use the term agency to mean design
| | 00:23 | studios, Ad agencies and in-house design teams.
| | 00:27 | Often you work through them,
not directly with the client.
| | 00:31 | Agencies hire freelancers as sub-
contractors, and I will use the term freelancer.
| | 00:37 | But freelancer is not a term
the Internal Revenue Service uses.
| | 00:40 | They use self-employed
and independent contractor.
| | 00:45 | More specifically, the IRS defines
workers in one of two categories either as
| | 00:50 | employees or independent contractors.
| | 00:53 | These categories determine how a
workers' income tax will be calculated.
| | 00:58 | An employee is someone who is hired.
| | 01:00 | They can be full-time which is defined
as 40 hours a week or part time, less
| | 01:05 | than 40 hours a week.
| | 01:07 | The employer withholds the employees'
federal and state income tax from each pay check.
| | 01:13 | A freelancer is responsible for paying
their own state and federal income tax.
| | 01:17 | No taxes are withheld by the employer.
| | 01:20 | In the United States, income tax
laws enable freelancers to keep more of
| | 01:25 | the money they earn because they can deduct
business expenses from their total income.
| | 01:30 | It places them in a lower tax bracket,
which lowers the percentage of tax they pay.
| | 01:36 | This all sounds terrific, but there is a
great responsibility a freelancer takes
| | 01:40 | on to keep track of these expenses;
| | 01:43 | to file forms properly and to do it on schedule.
| | 01:48 | For some designers, switching from creative
mode to accounting mode is just not possible.
| | 01:53 | Beware, if you can't balance your
checkbook as an employee, you're going to have
| | 01:57 | a tough time as a freelancer.
| | 01:59 | You have to be an entrepreneur with a
head for both design and record keeping.
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| Ongoing models of freelancing| 00:01 | I've come up with four
categories of freelancing.
| | 00:04 | The first two are ongoing,
the second two are temporary.
| | 00:07 | Each has specific economic and
creative advantages and disadvantages.
| | 00:12 | When you identify which category suits
you best, you can proceed with your eyes
| | 00:17 | open in regards to your expectations.
| | 00:20 | The first type of freelancer is a moonlighter.
| | 00:23 | After working all day at their real
jobs, moonlighters find a way to fit in a
| | 00:27 | few hours in the evening
to work on other projects.
| | 00:29 | There are primarily three motivations
for moonlighting: earning extra income,
| | 00:34 | using talents you don't use in your
day job, or working on projects that have
| | 00:38 | more meaning to you such as
social or environmental causes.
| | 00:42 | There are some drawbacks.
| | 00:44 | This additional work can creep into
your day job because there are things that
| | 00:48 | just can't be handled
after regular business hours.
| | 00:51 | It may be unfair to your employer.
| | 00:54 | Of all the categories of freelancers,
I find that moonlighters are the least
| | 00:57 | compensated for their time.
| | 00:59 | They can often be too rushed to
properly deal with basic estimating and
| | 01:03 | invoicing because
frankly they're just too tired.
| | 01:06 | Moonlighting is difficult to sustain.
| | 01:09 | You can find yourself stretched too
thin because it's hard to give a 100% to
| | 01:12 | your day job, to your freelance gig, and to
your relationships, and even your own well-being.
| | 01:18 | As a moonlighter you often
start out with the best intentions.
| | 01:22 | Make sure the benefits outweigh
the drawbacks with each project.
| | 01:25 | The second category of
freelancers I call Solo Visionaries.
| | 01:30 |
| | 01:30 | They are poised to succeed in an area
when the most important skill is the
| | 01:34 | ability to acquire new skills.
| | 01:37 | Solo visionaries take pride in calling
themselves the Swiss Army knives of creativity.
| | 01:41 | One advantage to this career
choice is extremely flexible scheduling.
| | 01:47 | Flexible doesn't mean
they work less than others.
| | 01:49 | It means they get to decide where those
work hours go in the day or the night.
| | 01:53 | Many find a nocturnal schedule more
conducive to creativity and productivity.
| | 01:59 |
| | 01:59 | Often the challenge that solo visionaries
have is to keep themselves focused and motivated.
| | 02:04 | Significant time management skills are
necessary because they don't have the
| | 02:09 | structure provided by
traditional office environments.
| | 02:12 | Successful moonlighters and solo
visionaries embrace instability and
| | 02:17 | recalibrate as needed.
| | 02:19 | Some find this process daunting,
others find it exhilarating.
| | 02:23 | Only you can decide if this
is the right path for you.
| | 02:27 | In the next movie, I will review
two temporary models of freelancing.
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| Temporary models of freelancing| 00:01 | The third and fourth categories
are models of temporary freelancing.
| | 00:05 | You may be transitioning from one job
to another and in the interim decide to
| | 00:09 | pick up some extra work to
keep your income stream going.
| | 00:12 | Many designers use this time in between
jobs to expand their portfolio or create
| | 00:18 | projects that show off new skills.
| | 00:19 | While you're looking for another full-time
time job, be clear about your end goal
| | 00:24 | with those who hire you on a freelance basis.
| | 00:27 | Letting them know that you're
seeking full-time work is a professional
| | 00:30 | courtesy and ensures that there are no
assumptions made as to your long term availability.
| | 00:36 | Agencies may be extremely helpful
in opening up their network to you.
| | 00:39 | If they think you're a great candidate
but can't hire you full-time, they can
| | 00:43 | often pass your name along to
colleagues that might be hiring.
| | 00:47 | Many agencies hire workers as
freelance to test them for available
| | 00:51 | full-time positions.
| | 00:52 | This is a great opportunity for both
parties to make sure that it's a good fit.
| | 00:57 | It's often a win-win situation.
| | 00:59 | You get an opportunity to see the
agencies' strengths and weaknesses and they
| | 01:03 | get to see yours too.
| | 01:05 | They'll expect you to work in their
office and have regular work hours and
| | 01:09 | responsibilities but you will
be compensated as a freelancer.
| | 01:13 | During the test period, your hourly
rate may be less than if you were a
| | 01:16 | traditional freelancer.
| | 01:19 | Remember, if you're hired as a
freelancer, they won't withhold taxes. That's
| | 01:23 | your responsibility and I will
cover that detail in the next chapter.
| | 01:27 | The IRS doesn't tolerate employers hiring
freelancers for extended periods of time.
| | 01:33 | So a hiring decision should be made soon.
| | 01:36 | A test period may not
result in full-time employment.
| | 01:39 | It might not be a good match, but it
shouldn't be awkward for either party to say
| | 01:43 | things didn't work out and still
maintain good feelings overall.
| | 01:47 | This experience has a potential for
you to learn more about your value to the
| | 01:51 | organization, about what you want from
your job, and what type of situation might
| | 01:57 | be better for you next time.
| | 01:59 | If you know you don't want to
accept a staff position, let them know
| | 02:04 | respectfully before any
test agreements are made.
| | 02:07 | Treat them with respect and
they will return the favor.
| | 02:09 | Whether you're going from one job to
another, or being tested for full-time
| | 02:14 | employment, transitioning
is a time of uncertainty.
| | 02:17 | Keeping your motivations clear and well
-communicated is the best advice that
| | 02:22 | I can give you.
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| Why agencies and clients hire freelancers| 00:01 | Let's review the main
reasons clients hire freelancers.
| | 00:04 | One of the most common reasons is to
provide a specialized skill that employees
| | 00:08 | of the firm are unable to do, or do as well.
| | 00:12 | Freelancers with specialized skills
are usually able to charge a premium for
| | 00:16 | what they do, as they are the experts.
| | 00:18 | Another reason is to help with overflow work.
| | 00:21 | In this instance, you will be
doing what the agency does already.
| | 00:25 | The agency may not be confident the
amount of overflow work will continue long
| | 00:29 | enough to support a full-time staff member.
| | 00:33 | Starting out, it's tough for young
designers to command high fees, but bringing
| | 00:37 | in fresh ideas at bargain
prices can get your foot in the door.
| | 00:41 | Many times agencies hire
freelancers for their unique perspective and
| | 00:45 | non-traditional ideas.
| | 00:48 | If you're hired to do overflow work,
you could be in a great position to wow
| | 00:52 | them with your skills.
| | 00:53 | With proper preparation and positioning,
you could pivot from just overflow work
| | 00:58 | to more lucrative and creative work.
| | 01:01 | Years ago, I asked a wise and
respected colleague for advice about being a
| | 01:05 | successful designer.
| | 01:07 | I was stunned when he told me that if I
return client's phone calls and emails
| | 01:12 | promptly and showed up to meetings on
time, that I would be better off than 90%
| | 01:17 | of graphic designers out there.
| | 01:18 | He also said, just do what
you say you're going to do.
| | 01:24 | It sounded so simplistic but it's
consistently held true for over 20 years.
| | 01:28 | As much as great creative skills,
clients appreciate freelancers that are
| | 01:33 | resourceful, organized, flexible,
efficient at what they do, and are reliable.
| | 01:39 |
| | 01:40 | Clients expect them to be
great listeners and contributors.
| | 01:44 | Hiring a freelancer is more
than just an extra pair of hands.
| | 01:48 | Clients appreciate great skills,
fresh ideas and a unique outlook.
| | 01:54 |
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2. PreparationManaging expectations| 00:01 | Canadian designer Marian Bantjes said
the best thing about being a freelancer is
| | 00:05 | being able to work, or not, whenever she wants.
| | 00:09 | She says she simply can't imagine having to
be in a particular place or time every day.
| | 00:14 | When you're considering working
as a freelancer, it's important to
| | 00:17 | understand what to expect.
| | 00:19 | There are great things such as
independence, keeping more of the money you earn,
| | 00:23 | and the potential for increased job
satisfaction. But there are also challenges
| | 00:28 | like instability, more
responsibility, and less structure.
| | 00:32 | As a freelancer, when you're called
upon to collaborate as part of a team, you
| | 00:36 | can often follow your own creative instincts.
| | 00:39 | You're there to offer your most skilled,
candid, and honest take because you've
| | 00:43 | been hired to do so.
| | 00:45 | As an employee, your honest
instincts are often quieted.
| | 00:50 | A recent survey found that 90% of
those choosing to freelance said they were
| | 00:54 | happier than when they were working as
an employee, and 55% said they wouldn't
| | 00:58 | give it up to work for someone else.
| | 01:00 | Those are pretty impressive
numbers. Now the bad news.
| | 01:05 | There are some employee benefits
you won't have as a freelancer.
| | 01:09 | When you want to take time off or you're not
feeling well enough to work, your income stops.
| | 01:14 | As an employee, Social Security taxes
are deducted from each of your paychecks.
| | 01:20 | Your employer is required
to match your contributions.
| | 01:24 | Different types of insurance are more
expensive if you purchase them as an
| | 01:28 | individual versus the group
discounts employers receive.
| | 01:32 | Purchasing affordable healthcare can be
a significant deterrent to freelancing.
| | 01:36 | One of the long term financial
disadvantages of being a freelancer is difficulty
| | 01:42 | getting credit for long
and short term bank loans.
| | 01:46 | Banks lend money based on
the income stated to the IRS.
| | 01:49 | Since most freelancers are deducting
business expenses against their income,
| | 01:54 | their net income looks quite low.
| | 01:57 | Banks consider self-employment unstable.
| | 02:00 | This can be a problem when
you're looking to buy your own home.
| | 02:04 | Two things you might miss as a
freelancer are mentorship and collaboration.
| | 02:08 | Some find freelancing not stimulating
enough and thrive in an environment where
| | 02:12 | they are able to learn from coworkers.
| | 02:14 | Many stay motivated by a
common workday schedule.
| | 02:18 | On their own they get lonely and
feel like they're creating in a vacuum.
| | 02:22 | I want to give you a
balanced view of freelancing.
| | 02:26 | There are some rewarding benefits.
| | 02:28 | You won't find this kind of
creative freedom working in an agency.
| | 02:32 | However, there is something to be said
for having an office full of coworkers to
| | 02:36 | collaborate with and be supported by.
| | 02:39 | So ultimately you'll have to decide
which environment will help you thrive.
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| Required forms and quarterly payments| 00:00 | I'm going to help you become familiar
with some of the forms and regulations
| | 00:04 | that are necessary for freelancing.
| | 00:06 | Before an agency can pay you, they will
ask you to fill out a W-9 Form where you
| | 00:11 | provide your Social
Security Number and your address.
| | 00:14 | Unless you have a legal partnership or
corporation, you'll check the box that
| | 00:18 | says sole proprietorship.
| | 00:21 | This form confirms that you are an
independent contractor and that the agency is
| | 00:25 | not required to withhold State or
Federal income taxes from your payments.
| | 00:31 | In January of the following year,
the agency adds up the payments made to
| | 00:35 | you the previous year.
| | 00:37 | If you've earned more than $600,
you'll receive a 1099 Form, which states the
| | 00:42 | total amount paid to you by the agency.
| | 00:45 | They mail it to you on the
address you gave them on the W-9.
| | 00:48 | So if your address changes, you must
be proactive and notify the agency that
| | 00:53 | paid you as a freelancer in the
previous year. Because no taxes are withheld
| | 00:58 | from your earnings, both the IRS and
the state income tax agencies require that
| | 01:03 | you file estimated
payments on a quarterly basis.
| | 01:07 | These are forms that you download,
fill out and mail to the tax agencies.
| | 01:12 | The Federal Form is called the 1040ES.
| | 01:14 | You must also make a quarterly
payment to the state in which you live.
| | 01:19 | Each state has its own name for the form.
| | 01:22 | In California, it's called a 540-ES.
| | 01:26 | The forms indicate when they are
due and where they are to be mailed.
| | 01:31 | When you're starting out, it gets
confusing as to how much payment will be necessary.
| | 01:36 | I have a simple rule of thumb that seems
to work well for beginning freelancers.
| | 01:40 | My suggestion is that for every $100
you earn in the previous quarter, you pay
| | 01:45 | the IRS $15 or 15%, and the State $3 or 3%.
| | 01:50 | This is a simple calculation that
you can use for the first few years of
| | 01:56 | your freelance business.
| | 01:57 | After that you'll get a better sense
of what you're earning and deducting so
| | 02:01 | you'll be able to be more
accurate in estimating your payments.
| | 02:05 | Gather all of your 1099 forms
to prepare your annual return.
| | 02:09 | If you're only freelancing temporarily,
you could use a simple tax preparation
| | 02:14 | program like TurboTax to calculate what you owe.
| | 02:17 | But if you plan to freelance on an
ongoing basis, get an accountant.
| | 02:21 | I have tips for finding a
good one in the next movie.
| | 02:25 | You'll file a Schedule C Profit or
Loss from Business to recap your business
| | 02:29 | expenses, which are deducted from
your yearly income and then your tax
| | 02:33 | liability is determined.
| | 02:36 | Depending on whether you
underestimated or overestimated your quarterly
| | 02:39 | payments, you will owe
money or receive a refund.
| | 02:44 | In addition, TurboTax or your
accountant will calculate what you owe for
| | 02:48 | Social Security self-employment tax
and any other special forms, say for
| | 02:52 | depreciation or amortization.
| | 02:55 | The IRS pays close attention
to independent contractors.
| | 02:59 | You don't want to get into
trouble with any tax agency.
| | 03:02 | If you receive an audit, you call
attention to yourself and you've signed up for
| | 03:06 | scrutiny for many years to come.
| | 03:09 | We've reviewed a lot of tax form names
and calculations and your eyes might be
| | 03:13 | crossing now but the most important
thing to understand is that freelancers must
| | 03:17 | make their quarterly payments.
| | 03:19 | It's not an option.
| | 03:21 | I cannot stress this enough.
| | 03:22 | Smart freelancers make it a habit of
putting the quarterly payment money aside
| | 03:26 | in a separate account every time they
make a deposit from a payment received by
| | 03:31 | an agency, just to make sure
it's there when they need it.
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| Finding an accountant and a bookkeeper| 00:00 | My accountant once said that
designers never have to cheat on their taxes.
| | 00:04 | Tax laws enable us to deduct so
many legitimate business expenses that
| | 00:09 | there's no reason to cheat.
| | 00:11 | My advice is that you find a good
accountant, keep good records, and establish
| | 00:15 | streamlined bookkeeping systems that
require the minimum amount of your time.
| | 00:20 | Get this business stuff out of the way so
you can do what you love to do; design.
| | 00:25 | The best way to find an accountant
is to ask your respected colleagues
| | 00:29 | for recommendations.
| | 00:31 | When I've done this, I have found that my
colleagues say things like, I love my accountant.
| | 00:35 | This is a good sign.
| | 00:37 | You want to look for someone who has
experience with designers, artists,
| | 00:41 | architects, or other people
in the creative service fields.
| | 00:45 | This ensures that they are aware of the
specific laws that pertain to our situation.
| | 00:51 | I don't recommend using an accountant
from a generic tax preparation franchise.
| | 00:56 | If you're freelancing long term, it's more
than just preparing and filing once a year.
| | 01:01 | You're trying to establish a long term
relationship with a professional that
| | 01:05 | will be advising you on
personal financial matters.
| | 01:10 | There is light ongoing
bookkeeping that needs to be done;
| | 01:13 | this includes sending invoices, posting
payments and deposits in your checking
| | 01:17 | account, paying bills, reconciling
bank statements, keeping schedules for tax
| | 01:23 |
| | 01:23 | payments, sending out past-due notices
when necessary, posting your expenses,
| | 01:29 | creating reports, and just keeping up
with the business part of your business.
| | 01:34 | Many freelancers do this themselves,
but some pay others for the service.
| | 01:38 | If you find that you're getting behind
on these tasks, then you know your time
| | 01:42 | is better spent designing versus bookkeeping.
| | 01:45 | Earn a few extra dollars and pay
someone to do it for you once a month.
| | 01:48 | The other important thing is that it
gets done, and it doesn't end up causing
| | 01:53 | panic and undue stress in the future.
| | 01:56 | It's also important that
you use somebody you trust.
| | 01:59 | They'll often have access to your
personal accounts, possibly some passwords,
| | 02:03 | and a lot of information that's private.
| | 02:06 | If you stay small, you can do this yourself.
| | 02:09 | Part of a growing business is that you
find the right people to support your
| | 02:13 | expanding creative endeavor.
| | 02:15 | Trying to do all the bookkeeping
yourself as your business is starting to grow
| | 02:18 | might not be the best use of your time.
| | 02:22 | I love my accountant and I don't know
what I do without my office manager.
| | 02:26 | Again, you're establishing long
term relationships with good people.
| | 02:30 | So choose wisely.
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| Tracking business expenses| 00:01 | The most logical way to track your
expenses is to make sure that you keep your
| | 00:04 | personal expenses and
business expenses separate.
| | 00:08 | My suggestion is that you have separate
checking accounts and separate credit cards.
| | 00:12 | This will help you easily track,
categorize, and recap your business expenses.
| | 00:17 | Here's a list of allowable business
deductions that designers often use.
| | 00:21 | Tax laws occasionally change, but your
accountant will know if there are any
| | 00:26 | clarifications or exceptions to this list.
| | 00:28 | Often, your car will be used
for both personal and business.
| | 00:32 | Keep mileage records, so you know what
percentage is deductible for business.
| | 00:37 | The IRS requires written records.
| | 00:39 | Deduction percentages for meals, gifts,
and entertainment categories often have
| | 00:44 | limitations, and these frequently change.
| | 00:47 | Talk with your
accountant about the current laws.
| | 00:50 | If your office is in your home, the
IRS requires that you create a floor plan
| | 00:55 | indicating the living
space versus the office space.
| | 00:59 | You can use it to calculate the
percentage of your home that is used as an office.
| | 01:03 | As backup documentation,
take photographs of the space.
| | 01:07 | Let's say you live in a 900 square foot
apartment, and pay $1500 a month for it.
| | 01:12 | Your floor plan indicates that one-
third of your space is used as an office.
| | 01:17 | When you pay your landlord each month,
pay $1000 from your personal checking
| | 01:21 | account, and $500 from your business account.
| | 01:25 | You would use this two-third and one-
third calculation when paying utilities and
| | 01:29 | any other business expenses that are shared.
| | 01:33 | If there are any inquiries by the IRS,
they require receipts to determine the
| | 01:37 | validity of your deductions.
| | 01:40 | In addition to printed credit card and
checking account statements, you should
| | 01:43 | keep original paper register receipts
for everything that you plan to deduct.
| | 01:48 | You can deduct payments you
make to your own subcontractors.
| | 01:51 | You'll need to get the Employer
Identification Number or EIN and follow the same
| | 01:56 | W-9 and 1099 filings as
explained earlier in this chapter.
| | 02:01 | Remember, when you start hiring
other people, it's absolutely imperative
| | 02:05 | that you consult with an accountant so you
know what your tax and filing obligations are.
| | 02:11 | Being able to deduct business
expenses from your total income can really
| | 02:15 | save you a lot of money.
| | 02:16 | The tradeoff is that you have
to keep track of them properly.
| | 02:20 | Inquiries and audits are expensive
even if you don't end up owing more money.
| | 02:24 | Establishing good tracking and
categorizing systems at the beginning is great
| | 02:29 | so you're able to find things when you need to.
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| Subcontractor versus employee| 00:01 | As a subcontractor, clients and agencies
will pay you without withholding any taxes.
| | 00:06 | You are responsible for paying your own.
| | 00:08 | Without a clear understanding of this,
it's easy to get into trouble with the
| | 00:12 | Internal Revenue Service and
your State Income Tax Board.
| | 00:15 | It has been common for companies to
deliberately misclassify workers as
| | 00:20 | freelancers rather than employees in
order to avoid paying matching Social
| | 00:24 | Security and other withholdings.
| | 00:26 | They also avoid the
responsibility of paying any employee benefits.
| | 00:31 | The IRS pays close attention to
determine whether a freelancer should have
| | 00:35 | been put on the payroll.
| | 00:36 | They look at 20 factors relating to
the relationship between the parties.
| | 00:42 | I'll review five of the key ones
and tell you how they apply to a
| | 00:45 | freelance designer.
| | 00:47 | The IRS wants to know that you're not
tied to the agencies work hours, that you
| | 00:52 | set your own schedule, and work independently.
| | 00:56 | The IRS gets suspicious when a
freelancer is continuing to work for an agency
| | 00:59 | over a long period of time, especially
when the location is the agency's office.
| | 01:05 | The IRS believes that the freelancer
should be able to decide where, when, and
| | 01:09 | how the work is performed.
| | 01:13 | If you have say more than 85% of your
income in one year from only one source,
| | 01:18 | the IRS may conclude that you're their employee.
| | 01:21 | A true freelancer works with
multiple agencies or clients.
| | 01:26 |
| | 01:27 | Finally, the IRS wants to know that
you're truly independent, that you have
| | 01:31 | your own computer, and other tools
you need and that you don't rely on the
| | 01:36 | agency for equipment.
| | 01:38 | If any one of these 20 factors is not true, the
IRS says you're an employee, not a freelancer.
| | 01:44 | So now who gets into trouble? It's the agency.
| | 01:48 | The IRS will hold the agency
responsible and require specific taxes and
| | 01:53 | payments including penalties and interest.
| | 01:55 | It's a bit of a dilemma because
staying a subcontractor is financially
| | 02:00 | advantageous to both parties.
| | 02:02 | It's not really your responsibility
to resolve it, but it is important that
| | 02:07 | you're aware of the laws and why they exist.
| | 02:09 | Again, the point is to do things
the way you're supposed to do to avoid
| | 02:13 | any level of scrutiny.
| | 02:15 | That's my advice.
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| Understanding business licenses| 00:00 | If you commit to freelancing, you're
running a small business and are likely to
| | 00:04 | need a few licenses. They are a City
Business license, a Seller's Permit, also
| | 00:10 | known as a Resale Certificate, and a DBA.
| | 00:13 | Let's talk about a City Business License.
| | 00:16 | In Los Angeles, my small design
office is required to get three different
| | 00:20 | licenses as part of this process.
| | 00:22 | They're separate because each
is taxed at a different rate.
| | 00:26 | One is called Wholesale Sales, which
means that my work is being resold to other
| | 00:31 | design firms and agencies.
| | 00:32 | The other is called Retail Sales where
I work directly with clients and sell
| | 00:37 | them tangible property.
| | 00:39 | The last one is called Professional
Services, which covers my work being
| | 00:43 | performed directly with clients where
there's no tangible property transferred.
| | 00:48 | You'll need to investigate what
business licenses your city requires.
| | 00:53 | The next license you may need is a
Sellers Permit, or Resale Certificate.
| | 00:57 | This is only necessary if
you're selling tangible property.
| | 01:02 | A resale certificate enables you to
purchase materials tax-free that end up
| | 01:07 | part of what you sell.
| | 01:08 | For example, if you design a line of
silkscreen t-shirts, you can purchase the
| | 01:13 | blank t-shirts without paying sales tax
on them, because it will be paid by your
| | 01:17 | customer when you sell them.
| | 01:20 | You must go to your local sales tax
office, explain what you do, and find out if
| | 01:24 | anything that you sell is taxable.
| | 01:27 | In California, this tax agency is
called The State Board of Equalization.
| | 01:32 | Take the opportunity to have them
review the require forms with you to make
| | 01:36 | sure that you know how to charge sales tax
and how to file quarterly or yearly returns.
| | 01:42 | The transfer of tangible property
requires that your customer pays sales tax
| | 01:47 | unless you're shipping it out of state,
or out of the country, in which case it
| | 01:51 | might be subject to use tax.
| | 01:53 | This can get confusing.
| | 01:54 | So again, consult with your Sales Tax Board.
| | 01:57 | There may be one more form you need.
| | 01:59 | It's called the DBA; Doing Business As.
| | 02:02 | And it's sometimes referred to
as a fictitious name statement.
| | 02:06 | A DBA is the official, legal
recognition of your business name.
| | 02:10 | It's required if payments are made
to a name other than your legal name.
| | 02:14 | For example, if your legal name is
Jane Doe, you can deposit payments made
| | 02:19 | directly to you in your checking account.
| | 02:22 | But, if you decide to call yourself
Doe Design Associates and a client writes
| | 02:26 | the check to that name, you can't
deposit that check in your account.
| | 02:30 | Banks require a DBA to open an
account that's not in your personal name.
| | 02:35 | It's often a four-week process to
get a DBA, and costs around $100.
| | 02:40 | Search online for details
on how to file in your area.
| | 02:44 | Note that it's a ridiculously
antiquated system that requires that your company
| | 02:48 | name be printed in a newspaper.
| | 02:51 | Yes, a newspaper, for four consecutive weeks.
| | 02:54 | This process is meant to show proof that the
public has been informed of your new business.
| | 03:00 | After that time, you'll receive a form
from the county clerk to take to your
| | 03:05 | bank to open a business account.
| | 03:07 | Filing for a DBA is not the
same as registering your name.
| | 03:11 | Searching and registering
are separate from this process.
| | 03:15 | Legally registering your name will
prevent others from using it and ensure that
| | 03:19 | you're not using someone else's.
| | 03:21 | It's possible to do this yourself, but
I recommend hiring an attorney to handle
| | 03:25 | it because the requirements differ
locally, nationally, and internationally.
| | 03:30 |
| | 03:31 | To recap, if you plan to do ongoing
freelance work, you'll need a city business license.
| | 03:36 | If you plan to sell something
tangible, you need a resale certificate.
| | 03:40 | And if you plan to do business
using a name other than your legal name,
| | 03:44 | you'll need the DBA.
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|
|
3. Agreements and ContractsGeneral principles| 00:00 | Go get a strong cup of coffee as we
plow through some really dry but important
| | 00:04 | legal documents in this chapter.
| | 00:07 | I wish we could just call them
communication tools because that's really what they are.
| | 00:12 | They define who is responsible for
what, what's being delivered, and what
| | 00:16 | it's going to cost.
| | 00:17 | And also, what the
ramifications are if things change.
| | 00:20 | They are agreements that both parties
discussed, sometimes negotiate, but mostly they
| | 00:25 | solidify your business approach.
| | 00:28 | It signals that you value the work that you
produce and that what you do is not a hobby.
| | 00:32 | Good business helps you
earn respect and build trust.
| | 00:37 | Everyone wants the project to go smoothly
without any misunderstanding or conflict.
| | 00:42 | The beginning of a project is the best
time to be having these discussions, not
| | 00:46 | after something has gone wrong where
fingers are being pointed as to whose fault
| | 00:50 | it is, and who is going to pay for it.
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| Signing nondisclosure agreements (NDA) and work-for-hire agreements| 00:00 | In this movie, I'll cover two agreements;
| | 00:03 | an NDA and a Work for Hire.
| | 00:05 | Whether working directly with the
client or through an agency, a freelancer may
| | 00:09 | be asked to sign one or both.
| | 00:11 | It's also possible that a client
or agency won't require either.
| | 00:14 | Let's start with an NDA;
| | 00:16 | a Non-Disclosure Agreement.
| | 00:19 | It's common that an agency
will ask you to sign an NDA.
| | 00:23 | Often, it means that their client
has asked them to sign an NDA and that
| | 00:26 | everyone working on the project
understands that the work is confidential.
| | 00:30 | NDAs are written by attorneys, so
that language is dense and confusing.
| | 00:34 | I'll explain the basic gist of an NDA.
| | 00:37 | The document states the date and
place of the agreement along with the
| | 00:41 | party's legal names.
| | 00:42 | It ensures that the project is
confidential and restricts any disclosure about
| | 00:48 | any part of the project for
a particular amount of time.
| | 00:51 | Sounds simple, right? Yes and no.
| | 00:55 | The first NDA that I ever received
was years ago when my studio did a large
| | 00:59 | project for a global cell phone company.
| | 01:02 | The document was confusing,
and I wasn't clear about it.
| | 01:05 | I didn't know what was expected of me.
| | 01:08 | I understood the need for confidentiality,
but I wasn't sure what actions I needed to take.
| | 01:13 | So, I asked those who hired me
to explain what I needed to do.
| | 01:17 | The last thing I wanted to have happen
was for me to do something, a mistake, or
| | 01:21 | cause confusion or some
liability issues down the road.
| | 01:25 | They told me that the working drawings
or test prints made during the design
| | 01:28 | process had to be shredded
before any were thrown away.
| | 01:32 | After the project was delivered, I
had to remove all the digital files from
| | 01:36 | my back-up systems.
| | 01:38 | Email correspondence was restricted
because we didn't have a firewall.
| | 01:42 | Anyone around the office, even
the janitor had to sign the NDA.
| | 01:46 | It didn't matter whether they
were working on the project or not.
| | 01:49 | If they saw it, they needed to know
what their responsibilities were to
| | 01:53 | keep quiet about it.
| | 01:54 | I couldn't show any of the processed
designs in my website or my portfolio.
| | 01:59 | The only thing that I could show
was what the company had produced, and
| | 02:02 | introduced into the market.
| | 02:04 | To get some sense of the scope, we supplied
over 80 designs of which only 6 were produced.
| | 02:09 | I would never have known what
specific actions I needed to take if I hadn't
| | 02:14 | asked for this clarification.
| | 02:15 | So, you can see, NDAs protect the
confidentiality of completed or unused design
| | 02:21 | projects, and can vary from less
restrictive to very restrictive.
| | 02:26 | They are legally binding, so make
sure to read them thoroughly, and get
| | 02:30 | clarification on any confusing
bits before you sign anything.
| | 02:35 | You may be asked to sign
a Work for Hire agreement.
| | 02:38 | It states that you will not own any of the
work reproduced, even work that wasn't used.
| | 02:43 | Work for Hire agreements mean that for
whatever fee, you retain no copyright to
| | 02:47 | the work you have done.
| | 02:48 | If you are an employee or a freelancer,
the law states that by default, you're
| | 02:53 | working in a Work for Hire agreement.
| | 02:56 | This ensures that when an agency sells
your work to a client that it's theirs to sell.
| | 03:01 | If you're working directly with the
client, your agreement can be different.
| | 03:04 | I will cover that when we talk about the
standard conditions of agreement in a later chapter.
| | 03:11 | Work for Hire agreements are very
restrictive and should not be entered into lightly.
| | 03:16 | As a freelance designer, you need to
be aware of who owns your work and when
| | 03:20 | copyright transfers.
| | 03:23 | It's common that copyright transfers
from the designer to the client or agency
| | 03:27 | when the designer is paid.
| | 03:29 | Photographers and illustrators have
contracts that sell limited rights to these
| | 03:33 | images, as opposed to the image itself.
| | 03:36 | If you are acting as a designer and a
photographer or illustrator, you should
| | 03:41 | have two separate agreements
| | 03:43 | stipulating what the agency owns or does
not own, at what point, and for how long.
| | 03:48 | My final recommendation is that if
you're in any way confused about a document
| | 03:54 | given to you to sign, ask the agency
or client to go through it with you point
| | 03:58 | by point, just to make sure you're
absolutely clear what you're agreeing to.
| | 04:02 | Under no circumstances should you sign a
document if you're not clear about what
| | 04:06 | specific actions you need to take.
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| Contracts with agencies| 00:00 | Freelance contracts differ when they
are with an agency versus when they are
| | 00:05 | directly with a client.
| | 00:06 | The most common freelance contracts
with an agency are verbal agreements.
| | 00:11 | An hourly or daily rate is agreed upon,
a timeframe is established, the total
| | 00:16 | numbers of hours are estimated or
a flat fee is proposed, and specific
| | 00:21 | deliverables are discussed.
| | 00:23 | It's also important to commit to your
availability during this time for input and review.
| | 00:28 | If you promise to be
available to work, keep your promise.
| | 00:33 | If an agency books you for full days
or full weeks, they expect you to be
| | 00:37 | available and have your undivided attention.
| | 00:41 | Make sure to tell them right
away if this is not the case.
| | 00:44 | It's also a great time to talk about
the preferred method of correspondence and
| | 00:48 | how much interaction will be
necessary for the completion of the project.
| | 00:53 | If you're working hourly, then ask
them how much time they think the
| | 00:56 | whole project might take.
| | 00:58 | Keep them informed if you're
using more time than discussed.
| | 01:01 | If it's your first time working with
this particular agency, it's a good thing
| | 01:05 | to ask what their payment schedule is.
| | 01:08 | The average time it takes an agency to pay a
freelancer ranges from two weeks to 30 days.
| | 01:13 | I've heard that some agencies tell
freelancers that they won't be paid until
| | 01:16 | the client pays them.
| | 01:17 | I don't agree with this practice.
| | 01:20 | The important thing is that you know what to
expect before agreeing to work on the project.
| | 01:26 | If you're concerned about having only
a verbal agreement, it might be a good
| | 01:29 | idea to send a confirming email to the
person hiring you about what was agreed upon.
| | 01:35 | In the next movie, I'll be
reviewing contracts that freelancers have
| | 01:39 | directly with clients.
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| Contracts with clients| 00:00 | We've covered what's needed if
you're working with an agency, but if your
| | 00:04 | contract is directly with the client,
it needs to have much more detail.
| | 00:08 | I supplied a contract template in the
resource files for you to reference.
| | 00:13 | Generally, this contract
has six distinct sections.
| | 00:16 | You'll find the language I use is
not legal, there's just clear objective
| | 00:19 | phrases and common terms.
| | 00:22 | The first section states the basic
information including the contract date, the
| | 00:26 | names of the companies entering into
the contract, and the name of the project.
| | 00:30 | The client information should
appear in standard business format.
| | 00:35 | The scope of the work needs to be
defined in terms of its size, production,
| | 00:40 | deliverables, and number of components.
| | 00:42 | Is it something completely new or does
it need to adhere to existing materials?
| | 00:48 | Where's the text and imagery coming from?
| | 00:50 | How many ideas will be produced for review?
| | 00:53 | How many refinement phases will
there be in terms of the design?
| | 00:57 | And finally, what will be delivered?
| | 01:00 | An estimate of fees will be provided in
task category such as design, meetings,
| | 01:05 | production, programming, then
a total amount is determined.
| | 01:09 | An area called Notes clarifies
stipulations unique to that project such as what
| | 01:16 |
| | 01:16 | happens when the scope of the
project is larger or smaller.
| | 01:21 | And what are the costs
associated with that change?
| | 01:24 | Also, it should contain some details
about what is and is not covered in the
| | 01:28 | revision phases of the project.
| | 01:30 | Clarification is needed as to what
the designer is not providing such as
| | 01:34 | printing, proofreading, or
programming, or image retouching.
| | 01:39 | If additional work is needed, an
hourly rate can be given for each of
| | 01:42 | those specified tasks.
| | 01:44 | A payment schedule should be established
and common schedules are in thirds or halves.
| | 01:50 | The last but most important area is a
place where each party signs and dates the
| | 01:54 | document acknowledging the agreement.
| | 01:57 | If you're working as a freelancer
directly with the client, it would be foolish
| | 02:00 | for you to begin work without a signed contract.
| | 02:04 | It may take the client a week or so to
give you the initial payment, so it's
| | 02:07 | common to start a project
before you receive any money.
| | 02:10 | But never ever begin without a signature.
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| Using standard conditions of agreement| 00:00 | Refill that cup of coffee.
| | 00:02 | I'm now going to review Standard
Conditions of Agreement or terms and
| | 00:06 | conditions document.
| | 00:08 | It should be called a dozen ways
to keep things from going wrong.
| | 00:12 | It's really a great tool for communication.
| | 00:15 | If you and your client understand this
agreement, it's rare that there will be a
| | 00:18 | dispute or misunderstanding, really.
| | 00:21 | This agreement is necessary if
you're working directly with the client.
| | 00:25 | Think of it as a business relationship pre-nup.
| | 00:28 | We don't think anything is going to go
wrong, but just in case it does, everyone
| | 00:32 | is clear as to what's going to happen.
| | 00:34 | It's signed only once and doesn't
need to be sent with subsequent contracts
| | 00:39 | unless your client contact
person at that company changes.
| | 00:43 | These agreements are easy to review
and agree upon at the beginning of a
| | 00:47 | business relationship, when feelings are
great and everybody is excited to work together.
| | 00:52 | Use them to stay out of trouble.
| | 00:55 | You must understand this
document if you give it to your client.
| | 00:59 | Often I go through it point by point
with a new client just so there's no
| | 01:02 | confusion, everyone knows what's expected.
| | 01:05 | I've included a template of this
type of document in the resource files.
| | 01:10 | I'll briefly explain it,
point by point. Here we go.
| | 01:15 | The first statement enables a
freelancer to charge 10% more even if the project
| | 01:19 | scope doesn't change.
| | 01:21 | It establishes a freelancer's
responsibility to notify the client if there are
| | 01:25 | revisions and gives hourly
rates for different types of tasks.
| | 01:31 | Statement two deals with outside costs.
| | 01:34 | If outside costs are paid by
you, there will be a handling fee.
| | 01:38 | A typical handling fee is 15% and
should be included in the contract amount.
| | 01:44 | In other words, if you plan to use a
thousand dollars worth of stock photography,
| | 01:48 | the amount that appears in
your estimate should be $1,150.
| | 01:54 | Statement three notifies the client
that if tangible property is transferred
| | 01:58 | within the state, the client will
be responsible for paying sales tax.
| | 02:03 | They pay it to you and you pay it to the state.
| | 02:07 | The fourth statement is extremely
important to include as it clarifies that a
| | 02:11 | client only owns the
design that he or she selects.
| | 02:15 | The others are yours to reuse,
adapt, and resell as you wish.
| | 02:21 | The fifth statement lets the client
know that you're taking responsibility for
| | 02:24 | proper back up of files for a specific
period of time and that those files are
| | 02:30 | created in systems that may be
different than those they use.
| | 02:35 | If you want to charge a client to
retrieve a project from a back-up anytime in
| | 02:38 | the future, this is the area
where those fees should appear.
| | 02:43 | Statement six helps clients understand
that they don't own rights to any work
| | 02:47 | until the final payment has been made.
| | 02:49 | They are in copyright violation if
they use or publish the work without
| | 02:53 | making the final payment.
| | 02:56 | Statement seven is a courtesy reminder
that even though the design copyright
| | 03:00 | transfers, there may be other
components of the project that have different
| | 03:04 | rights to agreements such as
illustration or photography.
| | 03:08 | Statement eight clarifies to the
client the importance of proofreading.
| | 03:12 | If projects are published with
spelling or grammar errors and there is a
| | 03:16 | cost involved to correct them, it
will be paid by the client, even if it's
| | 03:20 | the freelancer's fault.
| | 03:22 | Statement nine allows the freelancer to
bill for work completed when the project
| | 03:26 | is placed on hold for more than 30 days.
| | 03:29 | Statement 10 deals with your self-
promotion. Because the copyright is
| | 03:34 | transferred to the client upon final
payment you need to ask for permission to use it.
| | 03:39 | Without this permission, you're in
copyright violation if it's used in your
| | 03:43 | digital or in a physical portfolio.
| | 03:47 | Statement 11 ensures that you'll be
paid for the work completed up-to-date and
| | 03:52 | retain copyright if a project is canceled.
| | 03:56 | If a serious dispute arises, statement 12
secures the least expensive way to resolve it.
| | 04:02 | Stating that the location of the
arbitration be in the city where you do
| | 04:06 | business ensures that you
won't incur travel costs.
| | 04:11 | Your client needs to
sign and date this document.
| | 04:15 | A more thorough version of the terms and
conditions agreement exists on the aiga.org site.
| | 04:20 | It's called the Short Agreement
and covers a wider scope of work.
| | 04:25 | It's actually a lot longer than this one
but the work you may be doing might not
| | 04:29 | be covered by this simple
one that I've just presented.
| | 04:33 | I recommend you take a look.
| | 04:35 | The most important part of this
agreement is both parties understand it and that
| | 04:39 | your client needs to sign and date it.
| | 04:41 | You'll be irresponsible as a
business person otherwise, seriously.
| | 04:47 | Get this stuff out of the
way so you can start designing.
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| Coping with revisions and change orders| 00:00 | One of the best reasons to have a
signed contract and a Terms and Conditions
| | 00:04 | Agreement is that they clarify what
will happen when there are revisions -- and
| | 00:09 | there will be revisions.
| | 00:11 | Revisions and what they cost are
where designers and clients have the most
| | 00:14 | disagreements, and often the
confusion is purely about lack of timely
| | 00:18 | communication on the designers' part.
| | 00:21 | Statement number one in the terms and
conditions agreement, as reviewed in the
| | 00:25 | previous movie, declares your hourly
rates and that you'll get authorization
| | 00:29 | before performing any additional work.
| | 00:33 | The areas of the contract that are
most critical in regards to revisions are
| | 00:36 | those that indicate what will
happen when a project expands.
| | 00:39 | This is commonly referred to as Scope Creep.
| | 00:43 | As a freelancer you need to be aware of
when you're being asked to do something
| | 00:47 | that is beyond the scope and never make
assumptions that it would be okay to do
| | 00:51 | the work and just bill for it in the future.
| | 00:54 | The assumption that clients make is
that if the designer didn't say anything, the
| | 00:58 | additional work is free.
| | 01:01 | This sets a bad precedent;
| | 01:03 | it tells the client that you're either
confused, you don't value your time or
| | 01:07 | that you don't have boundaries.
| | 01:09 | There's a common quote
that applies in this case.
| | 01:12 | If you give them an inch they'll take a mile.
| | 01:15 | I suggest that you make the assumption
that you will not get paid for any work
| | 01:19 | you do beyond the scope unless
you've received prior approval.
| | 01:23 | Okay, so that sounds harsh.
| | 01:26 | But I see this issue injuring
business relationships more than any other.
| | 01:30 | I think the problem here is that
designers get very emotional and uncomfortable
| | 01:35 | about what should be a very
objective business transaction.
| | 01:38 | All you're really doing is reminding the
client of what was agreed to in the contract.
| | 01:44 | You can stay out of trouble by
simply drafting a quick email stating that
| | 01:47 | something requested was not
included in your original fee.
| | 01:51 | It's referred to in the industry as
a Change Order, which means it is an
| | 01:55 | amendment to the existing contract.
| | 01:58 | You can give a quick estimate as to
what you think it will cost and maybe some
| | 02:03 | options for solutions that
client may not have thought about.
| | 02:05 | Ask them to let you know how to proceed.
| | 02:08 | Keep an email record of verbal and
written approvals for additional work.
| | 02:13 | You will need to communicate clearly and
often, especially when the project scope changes.
| | 02:18 | A little diligence and clarity on
your part will head off a mountain of
| | 02:22 | billing headaches later on.
| | 02:24 | Your clients will appreciate your
directness and you'll avoid any awkward
| | 02:28 | he-said-she-said situations
when it comes to your invoices.
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|
|
4. Professional PracticeFinding and keeping good clients| 00:00 | A recent freelance industry report
says that 30% of work comes from referrals
| | 00:05 | and word of mouth, and less
than 3% from social media.
| | 00:09 | It's an important statistic to consider
where to burn your calories to pursue more work.
| | 00:14 | Recently, I tracked my business where
it has come from over the last years.
| | 00:19 | I created a client family tree.
| | 00:21 | More than 75% of my work over the
last 20 years has come from an ongoing
| | 00:26 | relationship with one smart,
well-connected marketing director.
| | 00:31 |
| | 00:31 | She takes us with her when she makes
career moves and we often retain work from
| | 00:36 | organization she's moved on from.
| | 00:39 | She's referred us to
colleagues in various industries.
| | 00:43 | I've been very, very lucky but there
are some things that I've paid close
| | 00:46 | attention to that maybe
other designers might not have.
| | 00:50 | In the beginning of a relationship,
whether personal or business, we often get
| | 00:54 | clues as to exactly how it's going to go.
| | 00:57 | It sounds a little crazy but within the
first 20 minutes of an initial meeting
| | 01:01 | with a new client, your intuition will
tell you exactly what you need to know.
| | 01:04 | For example, if an agency is
disorganized, rushed, and indecisive, you can be
| | 01:10 | assured that the project
will be run that way too.
| | 01:13 | If a client appreciates what you
do, treats you with respect, and
| | 01:16 | communicates with you in a calm,
clears and inspirational way, they're
| | 01:20 | probably going to be great to work with.
| | 01:22 | So take off your emotional hat and put
on one of objectivity and observation.
| | 01:27 | Do you trust this person?
| | 01:30 | Does what they do really interest you?
| | 01:32 | Do you respect them?
| | 01:34 | Are they hiring you for the
reason you want to be hired?
| | 01:37 | The bottom line is, doing good work for
smart, well-connected clients is the best
| | 01:43 | business development strategy for a freelancer.
| | 01:47 | Staying away from task-oriented,
anonymous, online projects will ensure the
| | 01:51 | potential for more ongoing
meaningful business relationships.
| | 01:56 |
| | 01:57 | The goal is to have clients describe
you to others as a pleasure to work with.
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| Getting a great start when working directly with the client| 00:00 | When working directly with clients, the
best way to ensure that the project will
| | 00:04 | go smoothly and that everyone will
be happy is to get a great start.
| | 00:08 | Here are a couple of strategies
that have helped me over the years.
| | 00:12 | A thorough kickoff meeting is crucial;
| | 00:14 | it's truly the barometer for
how the entire project will go.
| | 00:18 | In this first meeting you can make a
reasonable assessment of their needs,
| | 00:22 | their budget, and their ability to make
decisions, along with their collaborative skills.
| | 00:26 | In the Resource Files, there's a sheet
entitled Questions to Ask at a Kickoff Meeting.
| | 00:33 | Use it to make sure
you're getting the best start.
| | 00:35 | This personal interaction gives you
valuable clues as to the political dynamic
| | 00:40 | that will come into play
as the project progresses.
| | 00:44 | Discuss at length to reach a consensus
on the most important messages that the
| | 00:48 | design must communicate, and make
sure all the stakeholders agree on them.
| | 00:51 | These will become the criteria upon
which the design ideas will be judged.
| | 00:57 | Everyone should be in agreement on who the
target market is and what the project goals are.
| | 01:03 | If your initial design phase falls short
or fails, it's usually because there were
| | 01:08 | some confusion about the
criteria you were working with.
| | 01:10 | For more complex projects,
this meeting should be followed up with a
| | 01:15 | project brief that outlines what was
discussed and agreed upon and how you plan to proceed.
| | 01:21 | It has an inventory of
assets such as text and imagery.
| | 01:25 | It may also include schedules
for approval and details on the
| | 01:28 | specific deliverables.
| | 01:30 | This brief is given to the
client to review and comment.
| | 01:34 | Insist on the decision maker's
involvement in critical phases, primarily at
| | 01:39 | the kickoff meeting.
| | 01:40 | One of the most confusing situations
designers find themselves in is when the
| | 01:45 | people giving them feedback are just
second-guessing the one who's really
| | 01:48 | making the decisions.
| | 01:51 | The closer the designer is to the
visionary, leader, or decision maker the more
| | 01:54 | efficient and effective the work can be.
| | 01:57 | The more points of separation from
the visionary to the designer, the less
| | 02:01 | likely the levels of creativity and
efficiency are at 100%. Subtract 20% for
| | 02:07 | each person in between.
| | 02:09 | I call this the 80% Rule.
| | 02:11 | So, having terrific kickoff meetings to
establish consensus and playing to the
| | 02:18 | decision-maker can help minimize the
politics and communication breakdowns
| | 02:22 | that sometimes occur.
| | 02:24 | It increases your value to the process
and provides you an opportunity to prove
| | 02:28 | how crucial you are, both to
the team and to the company.
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| Protocol for correspondence and meetings| 00:00 | Today's demand for efficiency keeps
us away from in-person meetings and
| | 00:04 | telephone conversations.
| | 00:06 | Even though email business
communication is the new normal for designers, there
| | 00:10 | are drawbacks that strictly
virtual correspondence can create.
| | 00:15 | Meeting with someone in-person creates a
significant investment in the relationship.
| | 00:19 | I find that clients have a clearer idea
of the value that I bring to a project
| | 00:24 | when we discuss it face to face.
| | 00:25 | They gain an appreciation from my
thinking and my listening skills.
| | 00:30 | I find that when I take the time to
have an in-person meeting, the design
| | 00:34 | approvals and next steps go much smoother.
| | 00:37 | In contrast, I find that virtual
correspondence is about efficiency and information.
| | 00:42 | It creates anonymity and puts
the designer in a vulnerable place.
| | 00:47 | It makes very easy for either the
designer or the client to be less
| | 00:51 | accountable to the project.
| | 00:53 | With abbreviated input and reactions,
what we do becomes more task-oriented than
| | 00:59 | strategically effective.
| | 01:00 | Bidding on projects strictly through
email will give you very few results.
| | 01:06 |
| | 01:06 | The only thing that client is using to
judge the best designer is price and a
| | 01:10 | few visual references.
| | 01:11 | It's a very ineffective way to
begin a business relationship.
| | 01:15 | If you have any opportunity to sit
down with the client and show him or her a
| | 01:19 | few projects, explain the way you work,
and hear their stories, you'll have a
| | 01:23 | much better chance of
being chosen to work with them.
| | 01:26 | It gives you an opportunity to ask about
the experiences with the designers that
| | 01:31 | they have worked with in the past and
what they value, and how this project fits
| | 01:36 | into their larger goals.
| | 01:38 | You'll become viewed more as a
collaborator and less as a vendor or supplier.
| | 01:43 | Probably the biggest mistake a
designer can make is presenting various design
| | 01:47 | options in a PDF and
sending it to a client by email.
| | 01:51 | You have no control over them.
| | 01:54 | They're often sent around by email
without any explanation of the goals, the
| | 01:58 | process, or the criteria.
| | 02:00 | It becomes an exercise in subjectivity.
| | 02:03 | Designers lose the ability to
guide discussions in an objective
| | 02:07 | and authoritative way.
| | 02:09 | Controlling the way you correspond
with your client says a lot about
| | 02:12 | your professionalism.
| | 02:13 | They will mirror the boundaries, or
lack of boundaries that you set up.
| | 02:18 | I suggest sending emails only
during normal business hours.
| | 02:22 | I don't want my clients to believe that I'm
available to them 24 hours a day 7 days a week.
| | 02:28 | If you care about your work and care
about its effectiveness to the client, you
| | 02:32 | should do whatever you can to have in-
person meetings with everyone that's
| | 02:36 | involved in the decision-making process.
| | 02:38 | By establishing yourself as someone
who can go above and beyond the digital
| | 02:42 | curtain, you'll place yourself well
ahead of other freelancers that can't unplug
| | 02:47 | long enough to really
connect with their clients.
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| Challenges freelancers face with agencies| 00:00 | There are three common problems
freelancers experience when working with
| | 00:03 | agencies as opposed to
working directly with clients.
| | 00:08 | It's aggravating when an agency asked
for your availability and then doesn't
| | 00:11 | commit to the time you've kept open.
| | 00:14 | It's often a hurry-up and wait scenario.
| | 00:15 | Try to be accommodating but not at your expense.
| | 00:19 | Of course, the circumstances of each
situation will be different, but it's
| | 00:23 | usually a matter of
keeping the communication clear.
| | 00:27 | If another offer comes up, check with
the original agency to see if they can
| | 00:30 | make up their minds.
| | 00:31 | It's a courtesy to let them know that
you've had to move on to another project.
| | 00:36 | Often times, agencies hire
freelancers because they're so busy they can't
| | 00:40 | even think straight.
| | 00:41 | They get you working on a project
without giving you crucial details that will
| | 00:45 | help you focus on your efforts.
| | 00:46 | They just don't have the time to
properly convey the information or
| | 00:50 | provide supervision.
| | 00:51 | As a freelancer, you'll gain more
experience to know whether you actually have
| | 00:55 | enough information to effectively begin.
| | 00:57 | It sounds a little dramatic but you need
to protect yourself in these situations
| | 01:02 | because you can get scapegoated if
your work did not meet their expectations.
| | 01:07 | In the resource file, there's a sheet
entitled, Questions to Ask at a Kickoff Meeting.
| | 01:12 | I suggest using these questions to
make sure you're getting the best start.
| | 01:16 | As appealing as it seems, designing
without any supervision or direction
| | 01:20 | will often lead a freelancer down the wrong
path, especially if you're new to freelancing.
| | 01:26 | If you're working offsite, I suggest
scheduling a few times to check in with the
| | 01:30 | person who hired you.
| | 01:31 | Send sketches or work in a progress
file to see if you're on track, and invite
| | 01:36 | additional input just so they
can see where you're headed.
| | 01:39 | Freelancers are often hired
for just one part of a project.
| | 01:43 | Their work is very vulnerable to
change in interpretation because they are
| | 01:46 | rarely being asked to
follow through to completion.
| | 01:49 | Often freelancers are used in the design
process to generate a variety of new ideas.
| | 01:54 | Others not familiar with previous
phases handle the refinement, the production,
| | 01:58 | and the implementation.
| | 02:00 | Unfortunately, it's the design
version of the dreaded telephone game.
| | 02:04 | Inexperienced freelancers can get very
frustrated about this and think they can
| | 02:08 | show their version of the project on
their portfolio or on their website.
| | 02:14 | This is bad business practice.
| | 02:16 | It's insulting to the agency and will
be an unwelcome surprise to the client.
| | 02:20 | It could also violate your
NDA or work for hire agreement.
| | 02:23 | I'm not telling you this to discourage you.
| | 02:26 | I'm informing you of common
issues so you don't take it personally.
| | 02:31 | You'll learn as time goes on what
actions you can take to ensure that you have
| | 02:35 | the information that you need
to do the best work that you can.
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| Challenges agencies face with freelancers| 00:00 | It's a risk for agencies to hire
freelancers, especially for the first time.
| | 00:05 | Here's what agencies complain about
when they're frustrated with freelancers.
| | 00:10 | If you've agreed to work for an agency
at their office for full days or full
| | 00:14 | weeks, the expectation is that you're
focusing on the agency's work during the
| | 00:18 | time they have booked.
| | 00:20 | If you have other obligations, tell
them when they ask you your availability.
| | 00:25 | If you tell them last minute, it feels
like you've thrown them an unexpected
| | 00:28 | problem that they now need to solve.
| | 00:31 | Keep your business out of other's business
and your personal life out of the office.
| | 00:35 | This includes checking Facebook, Twitter,
sending emails and text messages while
| | 00:40 | you're on the clock.
| | 00:41 | When pulling together designs in a
great pressure, sometimes freelancers use
| | 00:45 | example imagery or reference material
that they found online or in publications
| | 00:50 | just to illustrate their intention.
| | 00:52 | Who owns the rights is unclear.
| | 00:54 | Make sure if you've used placeholder
images that you communicate that to the
| | 00:58 | agency well before the deadline.
| | 01:01 | Make sure you've made note of where you have
found it in case anything needs to be clarified.
| | 01:06 | The difficulty is that sometimes
clients fall in love with these images and
| | 01:11 | you're in a bind because you've proposed
something that you now have to talk them out of.
| | 01:16 | And don't show a placeholder image
that your client can't afford, it ends up
| | 01:20 | making you look irresponsible.
| | 01:23 | Organize your file so
others can logically use them.
| | 01:26 | You may be expected to give the agency
the source files you have worked on along
| | 01:30 | with the fonts and pictures needed.
| | 01:33 | Text editing is often necessary, so avoid
outlining fonts and making uneditable PDFs.
| | 01:39 | Follow the agency's protocol for
naming and saving files so that others can
| | 01:44 | understand how to access
them without any confusion.
| | 01:48 | Because times have changed, there
is an assumption that professional
| | 01:51 | protocol changed too. This isn't true.
| | 01:54 | The people who hired you will expect
that you will adapt to their preferred
| | 01:58 | business communication method.
| | 02:00 | The outgoing message on your
voicemail should be a professional one.
| | 02:04 | Include your name and that you
will return their call promptly.
| | 02:08 | And when you return their call, leave a
detailed message including your phone number.
| | 02:12 | You may be calling a phone
that doesn't have caller ID.
| | 02:16 | I suggest that you mirror
their method of correspondence.
| | 02:20 | Phone calls require a return phone call.
| | 02:23 | Emails should be replied to by email.
| | 02:26 | Never use texting unless there's been a
conversation that it's an okay method of communication.
| | 02:31 | And definitely make sure that the
email address that you use for business is
| | 02:35 | something that sounds professional as
opposed to crazysaltygirl@yahoo.com.
| | 02:41 |
| | 02:41 | Even though you may not be keeping
normal work hours, there's an expectation
| | 02:47 | that you will respond promptly, say
within a couple of hours, to inquiries
| | 02:52 | received Monday through
Friday from 9:00 a.m. to 6:00 p.m.
| | 02:56 | The main complaint I hear about
working with freelancers is that they just
| | 03:00 | disappear at critical times.
| | 03:03 | Don't be that guy.
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| Taking credit for work with agencies| 00:00 | As a freelancer, taking full credit
for something in which you only played a
| | 00:04 | small role causes problems.
| | 00:07 | Presenting a project you've done
through an agency by including a copy of it in
| | 00:12 | a physical portfolio is probably okay.
| | 00:14 | But when you show it, it needs to be
clear that you are working for someone
| | 00:18 | else, and what specific role you played.
| | 00:21 | Taking credit for having the
client as your own isn't appropriate.
| | 00:25 | A direct relationship maybe assumed
if their work or their name appears on
| | 00:30 | your website or resume.
| | 00:32 | Claiming design work inappropriately
is not just an ethical issue, but it's
| | 00:35 | a legal one as well.
| | 00:37 | You don't own it just because you designed it.
| | 00:40 | Specific contractual agreements are made
stipulating the terms of use for client
| | 00:44 | work in an NDA or a Work for Hire agreement.
| | 00:48 | You need to have explicit approval of
the agency before you show anything.
| | 00:54 | Agencies require permission from the client
to use their work in their own self promotion.
| | 01:00 | It's a violation of the client's copyright
if their work is used outside the agency.
| | 01:05 | Just ask the person who hired you what
you can and cannot use in your portfolio,
| | 01:09 | and ask what you can and cannot say about it.
| | 01:12 | You can't go directly to the client.
| | 01:14 | Permission to use a client's work
must be requested by the agency.
| | 01:19 | It would be inappropriate for you to
contact the client directly because the
| | 01:22 | contract wasn't with you in the first place.
| | 01:25 | Included in the resource files are
documents that show you how to request
| | 01:29 | permission to use this work in the
context of your website portfolio.
| | 01:34 | It's difficult when other
people take credit for what you do.
| | 01:36 | But, as a freelancer, you're in a fairly
powerless position to do much about it.
| | 01:42 | It's especially aggravating when the
project receives awards and recognition.
| | 01:46 | The situation could become emotionally charged.
| | 01:50 | This is an area where I've seen a
lot of burned bridges and bad feelings.
| | 01:54 | My recommendation is to
remain professional and humble.
| | 01:58 | I understand the impulse to show off
your hard work, but you need to do it
| | 02:01 | ethically and respectfully.
| | 02:04 | Just get the proper
permissions and you'll be just fine.
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|
|
5. Organization and Getting PaidGeneral bookkeeping setup| 00:00 | Establishing good systems and procedures
early on will save hours of time later.
| | 00:06 | You're going to need three organizational tools.
| | 00:09 | The first is Accounting Software to use
as a check register, to plan your cash
| | 00:14 | flow, and to categorize business expenses.
| | 00:17 | You can see past, present, and anticipated
deposits and payments coming in and going out.
| | 00:23 | Quicken Essentials is the most
basic program I can recommend for
| | 00:26 | beginning freelancer.
| | 00:29 | If you plan to transition to a larger
business, you should get set up in Quickbooks.
| | 00:33 | I say this because it's not easy to
transition from Quicken Essentials to Quickbooks.
| | 00:39 | The benefit of either program is that
each entry you make has a category which
| | 00:43 | is easily cross-referenced in a report,
so you can find out exactly how much
| | 00:48 | you spent on materials and supplies, or how much
any specific client has paid you within a year.
| | 00:54 | Another tool you'll need is a Database
Management program to organize client
| | 00:58 | contacts, and your job list.
| | 01:01 | These are used to generate
invoices and track billing.
| | 01:05 | Every time you get a new project given
its own job number, this number is used
| | 01:10 | in your file naming protocol, your time-
tracking software, and when you invoice.
| | 01:15 | You'll also need to keep an invoice list.
| | 01:18 | When you generate invoices, give each
a new consecutive number which will be
| | 01:23 | necessary for tracking and correspondence.
| | 01:27 | If you're a temporary freelancer,
you may be able to hobble along by
| | 01:31 | organizing your contacts in an Apple
Address Book, and using a Microsoft Word
| | 01:36 | template to generate invoices.
| | 01:38 | It's tedious, but that'll
work fine for simple tasks.
| | 01:41 | The best Database
Management system is FileMaker Pro.
| | 01:46 | Though it's difficult to set up, it's great.
| | 01:49 | It can be utilized to generate letters,
invoices, envelopes, labels, directories,
| | 01:55 | with ease and consistency.
| | 01:58 | If you're committed to freelancing,
just bite the bullet and set up good
| | 02:01 | database management software.
| | 02:04 | Finally, you'll need something to record
the time you spend working on your projects.
| | 02:08 | Time-tracking software is great for
freelancers who work directly with clients
| | 02:14 | or through agencies.
| | 02:15 | A good one is Harvest, but
there are many available.
| | 02:19 | By using them, you'll know the exact
time it took you to complete that same kind
| | 02:23 | of job, so there's less guessing
when it comes to creating new proposals.
| | 02:27 | You'll also be able to see the details
of specific tasks such as art direction,
| | 02:32 | meetings, or production.
| | 02:33 | There are new apps being developed all the
time to make tracking your time even easier.
| | 02:41 | Accounting software, database
management, and time-tracking systems are great
| | 02:46 | tools that take a lot of the
headache out of running a business.
| | 02:50 | Set them up as soon as possible, and
keep up with them on a weekly basis.
| | 02:54 | They are necessary and
nonnegotiable requirement of running your
| | 02:58 | freelance business.
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| Invoicing and purchase orders| 00:01 | Invoices are the formal request for
payment, as opposed to something that needs
| | 00:05 | negotiation or clarification.
| | 00:07 | They have ten components; omitting,
any one of these can create a snag in the
| | 00:12 | approval process, and could delay payment.
| | 00:14 | First, the date the invoice was prepared,
then, the name of your client contact
| | 00:21 |
| | 00:21 | in proper business format,
then your invoice number.
| | 00:26 | The next item is the project
name together with your job number.
| | 00:32 |
| | 00:32 | A purchase order or client
requisition number if needed.
| | 00:36 | Otherwise, I just say verbal.
| | 00:39 | It's good to list the date of the
signed contract, or the phase of the project.
| | 00:45 | The invoice should include the terms of
the payment such as 'due upon receipt'
| | 00:50 | or 'due in 30 days' for example. And
next, a clarification of how the work was
| | 00:56 | transferred to the client or agency'.
| | 00:59 | This should include 'files transferred
digitally' or 'shipped directly to the client.'
| | 01:04 | Remember, this is a description that
will affect how sales or business tax may
| | 01:09 | be assessed, so be accurate here.
| | 01:12 | Include a note as to who the
check should be made out to.
| | 01:15 | And lastly, where the payment is to
be mailed or to what account the fund
| | 01:20 | should be transferred?
| | 01:22 | When you're working with larger
corporations, you may be required to use a
| | 01:26 | P.O. or Purchase Order.
| | 01:28 | If you're not familiar with the term, a
P.O. is a legal document issued to the
| | 01:33 | designer in lieu of a signed contract.
| | 01:35 | It indicates the scope of the work, an
agreed-upon fee, and the terms of the payment.
| | 01:41 | If you've been given a purchase
order number, it must be included on your
| | 01:45 | invoice, otherwise, you won't get paid.
| | 01:48 | Agencies and clients appreciate when you
bill promptly, say between two days or a
| | 01:52 | week after the phase is done.
| | 01:54 | For longer term projects,
bill them every two weeks.
| | 01:58 | An organized freelancer will schedule
time every week to generate invoices.
| | 02:03 |
| | 02:03 | Send invoices as a PDF attachment to
an email, and in the body of the email,
| | 02:08 | you can clarify the timing of the
invoice and invite them to ask questions if
| | 02:13 | the invoice is unclear.
| | 02:15 | An example of this
verbiage is in the resource files.
| | 02:19 | The overarching advice I have about
preparing invoices is to ensure that there
| | 02:23 | never a surprise to the client.
| | 02:25 | You've already agreed on the
amounts, the terms, and the scope.
| | 02:29 | If there were revisions, you've
already discussed the additional cost
| | 02:33 | and received approval.
| | 02:35 | It's really simple.
| | 02:36 | If you want to stay afloat in business,
keep up with your invoicing, so you
| | 02:40 | will get paid promptly.
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| Creating past-due notices| 00:00 | If you've been following my advice
about communicating with clients, there is a
| | 00:05 | good chance that invoices
will not become past due.
| | 00:07 | But, the reality is, problems can arise.
| | 00:11 | It's your responsibility to document
all correspondence sent and received.
| | 00:16 | And remember, until the check is in your hand,
every promise to pay needs to be documented.
| | 00:21 | If a payment is not received after 30
days from the invoice date, you need to
| | 00:26 | send a past due notice.
| | 00:28 | You can send it by email; attach a
PDF copy of the invoice that's past due.
| | 00:33 | See the resource files for the
language to use in the body of the email.
| | 00:37 | Most of the time when invoices are late,
it can be resolved fairly quickly and
| | 00:41 | easily by just sending a notice.
| | 00:43 | If the payment continues to be late,
I recommend sending a notice once a
| | 00:47 | week for another month.
| | 00:49 | If an invoice has not been paid after 60 days,
that signals that there is a deeper problem.
| | 00:56 | There is usually one of two reasons
why invoices remain unpaid after 60 days.
| | 01:00 | Either the client questions that they
owe you the money, or they don't have
| | 01:05 | the money to pay you.
| | 01:06 | It's important to figure out which of
these is the problem because the action
| | 01:10 | you take will be different in each case.
| | 01:12 | If the client doesn't feel they owe
you the money, then you need to act very
| | 01:16 | quickly to assess what the specific problem is,
and try and resolve it as soon as possible.
| | 01:21 | They are in a very powerful position at
this point, so you need to be extremely
| | 01:26 | professional and try and remain objective.
| | 01:28 | Hear them out as what concerns they have;
be empathetic to their needs, but rely
| | 01:33 | on your backup documentation in
case it escalates into a legal dispute.
| | 01:38 | If they say they don't have the money
to pay you, it's important to determine
| | 01:42 | whether this is a short or a long-term problem.
| | 01:46 | If it's a short-term problem, be
proactive, and set up a mutually agreed-upon
| | 01:51 | schedule so they can chip away at the invoice.
| | 01:54 | If it's a long-term problem, say
bankruptcy, you're in a very vulnerable
| | 01:59 | position because their larger
creditors will take precedence over you.
| | 02:04 | Another option is to take
something in trade for your services.
| | 02:08 | If what they do is somehow valuable
to you, it's a reasonable way to get
| | 02:11 | these things resolved.
| | 02:14 | The general philosophy regarding late
payments is the longer they remain unpaid,
| | 02:19 | the less chance you will ever get paid.
| | 02:21 | It's important to try and resolve
these issues within 60 to 90 days, because
| | 02:26 | after that, the odds are against you.
| | 02:29 | Balance tenacity and
professionalism in keeping up with collections.
| | 02:34 | If you have a signed terms and
conditions agreement, your client has no right to
| | 02:38 | use whatever you've created for
them until they've paid you in full.
| | 02:42 | As you might imagine, this comes
in very handy in legal disputes.
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| Managing nonpayment situations| 00:00 | Once in a great while, polite
correspondence between you and a client about an
| | 00:04 | unpaid invoice stops being productive.
| | 00:07 | You need to take a more aggressive
approach to recuperate at least some of the
| | 00:12 | money that you're owed.
| | 00:13 | If things get really bad, I found that
threatening letters from attorneys can be helpful.
| | 00:17 | I've used Dun & Bradstreet's
legal services to put pressure on
| | 00:21 | non-paying clients.
| | 00:22 | Dun & Bradstreet is the business
equivalent to a personal credit reporting
| | 00:26 | agency like Equifax.
| | 00:28 | Their fees are reasonable for small businesses.
| | 00:31 | Depending on the amount owed, your best
option may be going to small claims court.
| | 00:36 | You can get a judgment against your
client if you are able to prove that you
| | 00:40 | performed according to the contract,
and that the client owes you money.
| | 00:44 | This may or may not help you.
| | 00:46 | Small claims court can pass a
judgment in your favor, but that doesn't make
| | 00:50 | cash magically appear.
| | 00:52 | It does give you the leeway though to
garnish funds from their bank account.
| | 00:56 | Small claims court
resolves disputes under $7,500.
| | 01:01 | Even if the client owes you $10,000,
it's sometimes worth it to cut your losses
| | 01:05 | and get a judgment for $7,500
through small claims court.
| | 01:10 | In regular courts, attorney's fees
and legal costs can mount up quickly.
| | 01:15 | If what is owed to you is more than $10,000,
my recommendation is to resolve the
| | 01:19 | issue through binding arbitration
in a city where you do business.
| | 01:24 | Again, this is stipulated in the terms
and conditions form that I recommended
| | 01:27 | in an earlier chapter.
| | 01:30 | These problems rarely happen to me
because I'm really conscientious about the
| | 01:33 | language of my contracts. But when they do,
| | 01:37 | it takes persistence and professionalism.
| | 01:39 | There have been times when I've been
persistent, and after two years, I was paid
| | 01:44 | $20,000 that I was owed.
| | 01:46 | But there have been a couple of times
where I've had to let payments go that
| | 01:50 | were under $1,000 because it just
wasn't worth my time to collect them.
| | 01:55 | Generally, being conscientious of
your client's financial health at the
| | 01:59 | beginning of a project is one of the
best ways to determine whether you will be
| | 02:03 | well-served to work with them.
| | 02:05 | Following professional protocol and
making sure you have signed contracts and
| | 02:09 | approvals for your revisions
should keep you out of trouble.
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6. Long-Term Success StrategiesEstablishing and maintaining business relationships| 00:00 | The two main ingredients in a long-
term business relationship are trust and
| | 00:05 | value, and both are earned over time.
| | 00:08 | In order to earn a client's trust, a
designer exhibits strong listening skills
| | 00:13 | and a heaping dose of empathy.
| | 00:15 | A deep dive into understanding the
client's needs, visions, expectations, and
| | 00:20 | concerns will ensure a solid
foundation for great creativity.
| | 00:25 | In an initial interview, I ask
prospective clients what they value in their
| | 00:29 | relationship with a design firm.
| | 00:32 | Ninety percent of the time, the answer is,
we need a firm who listens and really
| | 00:37 | understands what we do.
| | 00:39 | I've translated this into my own mantra:
| | 00:41 | Listen, Think, Design, in that order.
| | 00:45 | I believe that if design fall short or
fails, it's because these three things
| | 00:50 | were taken out of order.
| | 00:52 | It's difficult to know your value
when you're just starting at freelancing.
| | 00:57 | Some make the mistake of working for
free, believing that they will prove
| | 01:00 | their value to a client.
| | 01:02 | I find this to be one of the most
difficult ways to begin because once you've
| | 01:06 | given your work away, it's very difficult for
clients to justify paying for it in the future.
| | 01:13 | The best way to think about it is to
understand the market value of your unique
| | 01:17 | contribution to a project.
| | 01:19 | Unfortunately, inexperienced
freelancers either grossly overestimate or grossly
| | 01:24 | underestimate their fees.
| | 01:27 | When starting out, it's essential that
you track your time as you work on each
| | 01:30 | project to give you a
realistic view of how long it takes.
| | 01:34 | If you place a reasonable hourly rate
to that time, you will find an easier way
| | 01:39 | of knowing how to estimate new projects.
| | 01:42 | Once you get established as an expert
in what you do, you will transition from
| | 01:46 | an hourly-based rate
structure to a fixed-fee structure.
| | 01:50 | This is because your levels of
expertise and years of experience are worth more
| | 01:55 | than just an hourly rate.
| | 01:58 | I often get asked how to tell an
ongoing client that you're raising your rates.
| | 02:02 | I've put together some verbiage in
the resource files that uses objective
| | 02:06 | business-like language.
| | 02:08 | You can let them know how much you
have valued the work that you've done for
| | 02:12 | them and hope to continue.
| | 02:14 | But if their ability to compensate
you is no longer aligned with your higher
| | 02:18 | fees, you understand that
they might have to go elsewhere.
| | 02:21 | I am sincere enough in this statement to
offer to make recommendations for other
| | 02:26 | designers that might be
more appropriate for the work.
| | 02:30 | It may sound risky, but in my experience, over
half the clients will continue to work with you.
| | 02:36 | The others may go away, but I've been
surprised how many times they come back
| | 02:41 | one year, five years, even ten years later
with really great projects and better budgets.
| | 02:48 | A successful designer understands the
importance of being desirable to work
| | 02:52 | with, and trusts enough to recommend.
| | 02:54 | They create pride in their client's minds.
| | 02:58 | Clients will seek the right projects in
order for them to work together again,
| | 03:02 | and this kind of
relationship can't be about low fees.
| | 03:06 | Effective designers are able to
remain objective in their business
| | 03:09 | relationships, even though at
heart, they feel more like artists.
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| Working "on spec"| 00:00 | Work on spec is common
practice for architectural firms and
| | 00:03 | advertising agencies.
| | 00:06 | Speculative presentations or pitches
are when a number of agencies compete by
| | 00:10 | producing work for free or next to nothing
without any promises for a return on time invested.
| | 00:18 | Designs are created without any meaningful
context or collaboration with the client.
| | 00:22 | The shoot from the hip model is very risky.
| | 00:25 | What the chosen agency wins is a long-
term contract lasting from two to four years.
| | 00:31 | So the risk to do speculative work
can be worthwhile because the return
| | 00:35 | sustains the agency over a long period of time.
| | 00:39 | But spec work is death to a small
design practice, as our work is project-based
| | 00:44 | versus account-based.
| | 00:46 | The reward isn't a long-term contract
but just a website or a brochure or a logo.
| | 00:51 | It's not enough pay off for the effort it takes.
| | 00:55 | Before starting my own business, I
worked for two other design firms.
| | 00:59 | The first one did spec work and the
second one just said no. I've adopted the
| | 01:04 | 'just say no' model because I was able
to observe how doing spec work cost the
| | 01:08 | first company hours of time,
and created many disappointments.
| | 01:13 | The theory is that the best design
wins, but that isn't usually the case.
| | 01:19 | Often it's a political decision or a
myriad of other crazy things that have
| | 01:23 | nothing to do with good design.
| | 01:26 | Today, designers are being brought to
the table earlier in the project's life
| | 01:29 | cycle, or compensated for our
process as well as the end result.
| | 01:35 |
| | 01:36 | Working on spec undermines the
designer's ability to have input into the early
| | 01:40 | phases of a project.
| | 01:42 | It places the designer in the
position of merely decorating an
| | 01:45 | already formulated idea.
| | 01:47 | It diminishes collaboration and trust
and sets a poor precedent for a meaningful
| | 01:53 | and respectful business relationship.
| | 01:56 | Working on spec has its place in
larger agencies, but from a small business
| | 02:01 | perspective, it's the wrong tool for the job.
| | 02:03 | You're not going to be able to establish
long-term, profitable relationships in a
| | 02:09 | work for spec model.
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| Learning to say no| 00:00 | Learn to say no.
| | 00:03 | This may be very unpopular advice, but
do whatever you can to keep from working
| | 00:08 | on design projects for your friends
and family. Even if they pay you, they are
| | 00:13 | the worst clients ever.
| | 00:16 | Designers want to be the hero and
they want to be loved, so they take on
| | 00:20 | projects because people need them
but often can't afford to pay them.
| | 00:25 | It seems like a good idea when you're
not busy but as soon as you get busy this
| | 00:29 | work gets put aside for real jobs with
real deadlines and real compensation.
| | 00:35 | I've heard stories from many
colleagues that blame loved ones for
| | 00:38 | taking advantage of them.
| | 00:40 | The truth is they should never have agreed
to take on the project in the first place.
| | 00:44 | My advice is, burn your emotional
calories elsewhere and just say no, nicely of
| | 00:50 | course, and here's how to do it.
| | 00:52 | Tell family and friends that your
schedule is compromised and you would never
| | 00:56 | want to let them down, that you
would hate to under deliver on such an
| | 01:00 | important project and you wouldn't
want to commit to something that could
| | 01:03 | injure your relationship.
| | 01:06 | If they offered to pay you thank
them and repeat what I just said.
| | 01:10 | They will come back and possibly say,
Oh, I'm not just in a hurry for it.
| | 01:15 | My advice is, don't give them any hope
that you'll change your mind in the future.
| | 01:20 | Just tell them that you love them.
| | 01:23 | You may need to say no to real client
work because it's something you're not
| | 01:27 | interested in, you don't have the time
to do it, or the budget is inadequate.
| | 01:32 | My litmus test is Love, Time and Money.
| | 01:36 | You need two of the three to
have any chance of success.
| | 01:40 | By love, I mean the passion, the desire,
or the potential this project has to
| | 01:44 | represent the best work you can do.
| | 01:47 | Time means how long you have to
do the brilliant work and money
| | 01:51 | means compensation.
| | 01:53 | If there's only one of the three, the
odds are completely against you and it
| | 01:56 | will be a waste of your time.
| | 01:59 | Something I've noted over the years is
that when someone lacks enough money to
| | 02:03 | pay you for good design, they often
lack enough money to implement it.
| | 02:08 | I've crafted a few diplomatic ways to say no.
| | 02:11 | For example, you could say, I have
enough experience to know what it will take
| | 02:17 | for us or any qualified design
studio to get this job done right.
| | 02:22 | There aren't enough resources
to make it the best it can be.
| | 02:26 | Another would be, there will always be
someone willing to do this work cheaper.
| | 02:31 | If cost is the main criteria for
choosing a design firm, it's probably not
| | 02:35 | the best fit for us.
| | 02:38 | These statements are pretty
sobering for client to hear.
| | 02:41 | Sometimes it helps them to see how
shopping for price could actually
| | 02:44 | undermine their venture.
| | 02:47 | I've seen many of us burnout early in
our careers because of habitual lack of
| | 02:51 | objectivity in accepting impossible jobs.
| | 02:55 |
| | 02:56 | Learning to say no gracefully,
objectively, and diplomatically can keep you out
| | 03:00 | of loads of trouble.
| | 03:02 | Even though you love what you do,
it's not a hobby; it's your livelihood.
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| Staying motivated and inspired| 00:00 | Successful freelancers are
passionate about what they do.
| | 00:04 | They commit to their clients and to
the projects they work together on.
| | 00:08 | To be inspired, you should be
interested in where design is going.
| | 00:12 | It will help you craft a vision and a plan.
| | 00:15 | Become voracious about design.
| | 00:18 | What work is being done that is
transforming our industry creatively and
| | 00:21 | economically? Knowing this helps you
see where you can be most effective in
| | 00:26 | the work that you do.
| | 00:28 | The best designers keep great resource
files, either digital or physical, to draw
| | 00:33 | upon for ideas and inspiration.
| | 00:35 | One of the most insightful tools are
designer's journals and sketchbooks.
| | 00:39 | They become rich
documentation of a designer's evolution.
| | 00:43 | They force you to become
committed to your view of the world.
| | 00:48 | I suggest joining and participating in
design-related communities such as the AIGA.
| | 00:55 | Meet fellow designers and contribute your ideas.
| | 00:59 | Become part of communities that are
positive about the impact that design can
| | 01:03 | have for commerce and for
social or environmental good.
| | 01:07 | Avoid the complainers.
| | 01:10 | Commiserating with whiny
designers is a waste of time.
| | 01:14 | Read journals such as Fast Company,
GOOD, Wired, Design Observer, and
| | 01:18 | Core77; they will help you understand the
greater impact that design is capable of making.
| | 01:25 | What you will learn will make your
conversations with colleagues and
| | 01:28 | clients much richer.
| | 01:30 | It's great because you become a
resource for new and innovative thinking.
| | 01:35 | Understand the economy and
culture of the city that you live in.
| | 01:39 | Even though we're in a global economy,
most of the freelancers' work will come
| | 01:43 | from large and small local sources.
| | 01:46 | Stay relevant and clear.
| | 01:49 | Clarity is absolutely necessary
to make tough decisions faster.
| | 01:53 | It's a required skill to navigate
the peaks and valleys of our economy.
| | 01:57 | Clarity is also required to access
our intuition and our creativity.
| | 02:02 | It's a necessary component for empathy,
the successful designer's secret weapon.
| | 02:08 | As a freelancer you should ask yourself,
is this work meaningful and lucrative?
| | 02:12 | If the answer is yes, you have a great
foundation for your work that can sustain
| | 02:17 | your effort for the long term.
| | 02:19 | Enjoy yourself and take pride in the
fact that you're in control of your own destiny.
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ConclusionNext steps| 00:00 | The most rewarding and most challenging
thing about being a freelancer is that
| | 00:04 | you're in charge creatively and financially.
| | 00:08 | I'd like to use the analogy of a
mountain climber and his base camp.
| | 00:12 | The mountain climber is your creativity
and base camp is the support you need to
| | 00:16 | reach great heights.
| | 00:18 | Think of the business side
of your venture as base camp.
| | 00:21 | If well-maintained, it frees you to be
primarily focused on your creativity.
| | 00:26 | So attending base camp regularly, just a
couple of hours a week, will enable you
| | 00:30 | to reach your creative summit.
| | 00:32 | Just taking the time to view this course
shows your commitment to your new venture.
| | 00:35 | It's a great beginning and you could
look forward to more in-depth courses being
| | 00:40 | added to the Lynda.com Online Training Library.
| | 00:44 | I wish you all the best.
| | 00:46 | Be brilliant, and make your quarterly payments.
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