Freelance Writing series part 4: Business Set-up

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As you’ve seen in the previous posts, there’s a lot more to freelance writing than just writing. Setting up your business correctly is the first and possibly most important step to ensuring your success as you step out into the freelance world. In this post we’ll  cover the set-up of some of the basic things you’ll need to start your business and where you can go to get more in-depth information. From ABNs and bank accounts, to websites and professional email addresses, contracts and insurance, this post gives you a guide to all the things you need to consider when setting out.

Your business space

Let’s start with the most important thing: where are you going to be working? If you’ve chosen the freelance life then you’re probably working from home rather than a shared-office space, which means you need to consider a few things.

First of all, are you working from the kitchen bench, the dining room table, or the back deck? Or do you have the ability to set up a home office? It’s a highly preferable option to have a designated workspace, one that doesn’t need to be cleared away for dinner each night or moved for the kid’s activities. Having a specific place that is your workspace helps you brain to acknowledge when it’s time for work in the same way that it may switch into work-mode when you walk into an office building or onto a university campus.

Once you’ve decided on your workspace you need to consider what resources you need. A computer is an obvious one, but you’ll also need things like notebooks, pens, writing and editing resources such as style guides and handbooks. Do you have an up-to-date dictionary? You may need a printer, a whiteboard, or a desk planner. A diary and/or a calendar is a really simple but useful tool. There may be particular programs that you need or want as well. To begin with, simple Excel sheets will handle your finances, but long term you may want to consider bookkeeping software like Xero and QuickBooks. If you have design as an element of what you do, you may need Adobe Dreamweaver or InDesign. Likewise, apps like Grammarly and Hemmingway are essential for writers, while apps like Evernote are great for collecting and organising ideas, and Dropbox is useful for sharing and backing up your work.

Make sure you keep receipts for anything you buy, including your computer and desk, that will be used for your business. Come tax-time, all these things count as expenses that will offset your income.

Applying for an Australian Business Number (ABN)

An ABN is a unique eleven-digit number that identifies your business, a bit like your Tax File Number (TFN) identifies you personally to the tax department. Apart from some businesses requiring you to have an ABN in order to pay you, just having an ABN can show professionalism and dedication as well as helping you to claim certain expenses against your tax (we’ll talk more about your taxes in the next post). It also allows you to get the Australian domain name for your website with ‘.au’ on the end.

Applying for an ABN is free and relatively simple. Head to The Australian Government Business Registration Service and follow the prompts under ‘Register your business’ to get your ABN. If you’re a freelance writer you’ll be registering as a sole-trader rather than a company, which allows you to use your TFN to lodge tax returns, requires fewer reports, losses on your business can offset any other income earned (e.g. if you work in another job as well as freelancing), and doesn’t require a separate bank account (although I’d still highly recommend you get one!). To learn more about the official definitions of a sole trader you can read more here.

You can also register your business name at the same time (this does incur a fee of $39 per year or $84 for three years*). Ignore registering for GST and other taxes for now. The likelihood is that you won’t need them to begin with, but again, we’ll discuss this in more detail in the next post.

The Business Registration Service also provides a wealth of information on starting a business and how to plan for success. If you’ve applied for an ABN as a sole-trader, you can also now link it to your TFN through your myGov account. Simply go to ‘Account Settings’, ‘Manage ABN Connections’, and click on ‘Connect an ABN’.

And there you go, you’ve completed step 1 of setting up your new business!

*Pricing correct as of January 2019

Getting a Business Bank Account

First of all, let’s talk about why you need a separate account as there are plenty of reasons. It’s the easiest way to keep track of your business’s money vs your private spending money. Having a place where all your income as a sole-trader goes, and where any expenses for that business come out, makes it much easier come tax time. It’s also a great way to ensure you’re keeping money aside for tax and superannuation (which we’ll be discussing later in the series). Keeping your business finance separate, especially if you have other sources of income (like a day/night job, investments, or if you share a bank account with a partner with money coming in from other sources) can help you quickly and easily identify if your business is making enough money to make ends meet. This is especially important if you’re looking to make the jump from salaried employment into freelancing permanently.

There’s lots of different bank accounts out there that specifically cater to small businesses and sole traders. Different accounts will offer you different things such as varying fee structures, having card access to the account, savings accounts with or without interest, etc. Ask yourself if you need to have access to the money through a card for business meetings or online purchases? Do you want or need a separate savings account to put aside tax and superannuation? Compare the various banks and ask yourself what is most important to you as you develop your business, what services you’re most likely going to need, and how much money you expect to make month to month (many accounts require a minimum amount of money to pass through them each month otherwise they charge a fee).

Building a website

A website is a quick and easy place for people to find you, to see testimonials, to know exactly what services you offer and how much you charge for them. It’s a place for your personality to shine and for you to showcase your expertise.

Website hosting services such as WordPress and Wix all offer free and easy-to-use website templates which you can upgrade and customise to your heart’s content. It’s generally best to invest the money in securing a personal domain name (that’s the web address shown in the bar at the top e.g. “underground-writers.org”) associated with your business to ensure that someone else doesn’t use the same name, and also to show that you’re a professional. Having your own domain also enables you to set up a professional email account generally by linking it to G Suite through your webhost.

If you’re going to invest in the domain name, then you can also consider using Squarespace which offers similar packages to Wix and WordPress but doesn’t have a free option. Pricing for securing your own domain and various other services with your webhost varies depending on what you purchase and who you purchase through. As a base though, WordPress offer their basic package including a domain name for USD$5.50 per month or USD$55 per year, Wix offer their basic package for USD$7 per month or USD$60 per year, and Squarespace offers their basic package for USD$22 per month or USD$192 per year*. What you get with each basic plan varies though, so do your research and pick what’s best for you.

When designing a website, it’s important to make sure that it has some basic features. First of all, you need to have, at the very least, a “Home” page which introduces what you do, an “About” page that describes who you are and why you are qualified to do the job, and a “Contact” page that allows people to enquire about hiring you. You may also want to consider having a “Portfolio” page where you can link to examples of your work, or a “Testimonials” page where people can see testimonials from your past clients. You may also want to consider having a “Pricing” or “Packages” page that tells people what your basic rates are for various types of work (however, many professional writers keep this information private so that they can adjust it as necessary).

Your website should also reflect who you are and what your work is. If you write articles about gardening and the outdoors, you may wish to have a colour scheme and photos that reflect that. Likewise, if you’re a technical writer you may wish to have a more corporate looking website that appeals to businesses. The best thing to do is to find other freelance writers in your field and look at their websites. What do you like and what don’t you like? Why? Why do you think they’ve made certain decisions about how to lay out or present themselves? Once you’ve ascertained that, you can start building your own website using the templates available through your webhost.

*Prices correct as of January 2019

Email

Having a professional email will not only help you keep track of your work easier than using a personal email, but is also a way to reinforce when you are in work mode and when you are in home mode. It means you can set up your inbox with relevant flags and tags, a business calendar, and have a designated place for all things work-related. The more you can set up your freelance business like any other business, the more your brain will sit down to work and be in work-mode.

WordPress, Wix and Squarespace all offer options to link a business address using G-suite. This gives you an email address with your custom domain name in the title. However, if you’re going with a custom-made website or with one of the free packages, most internet providers now allow up to 10 email addresses with your home internet. If you’re pretty sure you’ll be sticking with your internet provider for a decent amount of time, then you can easily create a professional email using your current resources.

If you ever change your email address, it’s important to make sure you notify any existing clients so that they know how to reach you in the future.

Contracts

Contracts are necessary for setting out the terms of your work and ensuring that both you and the client know what is expected and required on both sides. They ensure that the work you’re doing is legally binding so that if either party doesn’t deliver the law can protect you.

Your Contract or Client Agreement should specify the date on which the agreement was made, who the client is and who the consultant is (that’s you), the scope of the work, the due date of the deliverables, what payment and fees are covered, any insurance that applies, and under what jurisdiction the agreement has been made. Both parties also need to sign and date the agreement.

The Media, Entertainment and Arts Alliance (MEAA) offers a freelance journalist model contract which you may wish to adapt to your own use or you can just Google templates of contracts for the type of freelance writing you’re doing. By looking at multiple contracts you’ll start to understand what you need to include and what wording you’ll need to use. The MEAA also offer a contract assessment service that you can pay for if you’re unsure of what your contracts need to cover.

For in-depth reading on contracts you can visit the Arts Law Centre of Australia

Personal indemnity and public liability insurance

Personal indemnity insurance generally covers you for legal liability on claims regarding a mistake you may make in giving professional advice or any omissions to complete advice you may make. Public liability insurance covers you for any claims arising out of personal injury, property damages or financial loss as a result of an occurrence in connection with your business activities.

Some writers don’t take out insurance, others don’t take it out straight away, while some prefer the peace of mind of knowing they are covered if the worst should happen. Some will take out Personal Indemnity and not Public Liability or vice versa. If you’re a member of MEAA you’ll receive insurance as part of your membership. The same goes for members of the Australian Marketing Institute, but if becoming members of those organisations doesn’t work for your, then Duck for Cover (despite being aimed at performers) is a popular choice amongst writers and freelancers that is reasonably priced.

It’s important to remember that insurance can vary from person to person, so do your research, ask lots of questions of your insurers, and weigh up the costs and risks to find what works best for you.

And that’s the first part of setting up your business. In our next post we’ll be looking more closely at finances, tax and superannuation, including things like how much to charge, how to write up a quote, and how to juggle your tax and superannuation. In the meantime, it’s time to start setting up your workspace!

Disclaimer: To the extent that any of the above content constitutes advice, it is general advice without reference to your needs or objectives and therefore cannot be relied upon. Before acting on any advice you should obtain advice specific to your needs.

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