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The Roth, The SEP and The Solo 

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As you begin to ponder your inevitable retirement from the Freelance life,  you’ll  need to examine options for saving.  Those who generate an income large enough to make planning and saving for the future an obvious course of action probably have an investment counselor to act as guide through the minefield.  

Yet at some point,  less wealthy Freelancers must also understand how to finance the next phase of their lives.  Choosing the best retirement plan option is confusing and subtle differences can magnify both at tax time and when it’s time to retire.  I hope that you find this post useful as you formulate the plan for your future.

The Simplified Employer Pension Plan

Somewhat similar to Solo 401K,  the SEP IRA retirement plan may be used by Sole Proprietors,  LLCs,   C  Corporations,  S  Corporations and Partnerships.  As an added bonus,  the SEP IRA may be used not only by those who have both W2 and self employment income,  but also by business owners who employ more than just the spouse.

Contributions to the SEP IRA are made pre-tax and contributions are tax deductible.  It is permissible to contribute up to 25 %  of W2 earnings plus up to 20%  of self employment income,  to the maximum annual contribution of $49,000.00 in 2010.  There is no  “catch up contribution”  provision with SEP IRA.

If you have a job,  including one where you are able to participate in a retirement plan,  along with a sideline business,  then SEP IRA is your option of choice.   Up to the maximum,  the amount you choose to contribute,  or even if you choose to contribute,  in a given year is up to you.  Contributions are held tax deferred and withdrawals made after age 59 1/2 are taxed as ordinary income.  Withdrawals made prior to age 59 1/2 are subject to the customary 10 %  premature withdrawal penalty and additionally,  will be taxed as ordinary income.

Small business owners with employees may institute a SEP IRA for themselves and their employees.  Business owners are able to make generous tax deductible contributions to the company SEP IRA on behalf of themselves,  the on-the-payroll-wage-earning spouse and other employees.

The business owner decides at what level to fund the plan,  up to 25%  of annual compensation.  The %  of funding for the business owner must equal what is offered to employees.  Each employee has an individual SEP IRA account and the business owner pays the entire contribution.  The pre-tax money paid into each SEP IRA account is tax deductible for the business and is a tax free benefit for the employee.

If you like,  it is possible to convert a SEP IRA to a Solo 401K,  something you may choose to do when you turn 50 and want to make those catch up contributions.  Other retirement accounts can be consolidated into the SEP IRA,  with the exception of a Roth  401K,  which is an after-tax fund.  It is not possible to borrow against the value of the SEP IRA.  April 15  is the deadline to establish and fund your SEP IRA account in order to receive a tax deduction for the previous year.

Roth 401K

 Unlike SEP and Solo 401K,   Roth 401K contributions are made with after-tax income.  Which option you choose will,  like most of life’s choices,  depend upon how much money you generate.  Depending upon your financial situation,  you may decide to split the difference and have both a  (pre-tax)  Solo 401K and an  (after tax)  Roth 401K. 

It is permissible to use the salary deferred portion of your Solo 401K to make a Roth 401K contribution.   Remember that the maximum annual contribution is $16,500.00  for those younger than 50 years and $22,000.00 for those 50 years and older.  Profit sharing Solo 401K contributions are not eligible to be made as a Roth 401K contribution,  since they are made pre-tax and are tax deductible and you cannot commingle the two.

While Roth 401K income deferred contributions are NOT tax deductible,  withdrawals you make after age 59 1/2 years are tax free IF five years have passed since your first contribution to the Roth (known as the 5 year rule).  Roth distributions must begin at least by age 70 1/2,  unless you roll over to the Roth IRA.

BTW,  if you transition into a job that offers a retirement plan,  you may be tempted to roll your SEP IRA or Solo 401K into the new retirement account.  Be advised that may or may not be a smart move.  Maintenance fees will be much lower for an account attached to a large company vs. that of an individual;  but there is much more investment flexibility available in your Solo 401K vs. what is available to a big corporation. 

Thanks for reading,

Kim

Administrative , Leave a comment

The Self Employed 401K Plan

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Freelancers are the CEO of our solo business empire and we wear many hats.  In addition to promoting our business services,  networking and prospecting for new clients,  managing our brand,  remaining relevant in a fluctuating marketplace and BTW,  actually working on projects that give us the billable hours that allow us to eat and maintain the roof over our heads,  we must also define,  fund and manage our retirement strategy. 

A March 2010  SBA study found that we Freelancers are much less likely to make adequate financial preparation for retirement.  That’s probably because most of us are either on our spouse’s retirement plan,  or are not generating enough income to incorporate saving into our lives. 

If you’re unmarried and able to spare a few thousand dollars a year,  do set up a retirement account.  It is essential that we have cash available to us as we get older.  Inevitably,  the day comes when one is too old and frail to work.  Plus,  a retirement account  keeps money out of the hands of the tax man,  for a while anyway. 

The Self Employed 401K was created in 2001 and made available on January 1, 2002.  The Self Employed 401K offers benefits that compare well to the traditional 401K plan.  This retirement plan option may be used by Sole Proprietors,  LLCs,  S  Corporations,  C  Corporations and Partnerships.  Solo 401K may also be used by small business owners whose only employee is the spouse.  The spouse must be on the payroll and receive income from the business.

Solo 401K consists of two types of contributions,  salary deferral and profit sharing,   both of which are tax deductible.  Funds deposited into the account are held tax deferred.  As with the typical 401K plan,  you may begin to draw down after age 59 1/2.  Those withdrawals will then be taxed as ordinary income.  Withdrawals made prior to age 59 1/2 will incur the 10%  premature withdrawal penalty and will additionally be taxed as ordinary income.

The Self Employed 401K,  or Solo 401K,  allows Freelancers younger than age 50 to contribute a maximum $16, 500.00 tax deferred annually.  Freelancers aged 50+ are eligible to contribute up to $22,000.00 tax deferred income each year,  known as the  “catch up”  contribution.  Money deposited into a Solo 401K must be generated by self employment only and not salary.

Up to the maximum,  you may decide the amount of your annual contribution.  If you’re unable to make a contribution in a given year,  then don’t make one.  When billable hours are strong,  add extra money to the account whenever possible.  The profit sharing feature allows you to deposit up to 25%  of your annual income,  which is tax deductible and held tax deferred.  That equals maximum $49,000.00 a year for those under age 50 and $54,500.00 yearly for those age 50+.

A solo 401K retirement plan is easy to set up and there are no complicated administrative requirements for us to micromanage.  We are responsible for making the contributions and deciding where to invest.   The deadline for establishing your Solo 401K is December 31 of the year in which you would like to receive the tax deduction (fiscal year end for corporations).  When researching 401K plans,  look for the following:

  • Low expense ratios.  Check out http://morningstar.com for a rate comparison.
  • No or low set-up fees and annual costs
  • Investment flexibility.  You should be able to invest in stocks,  bonds,  index funds and mutual funds.

It is possible to borrow against the plan’s account balance,  maximum $50,000.00 or 50% of the account balance.  If the loan is paid back on time,  there will be no penalty charges or taxes assessed to the transaction.  It is also possible to transfer funds from another retirement account into your Solo 401K and consolidate your holdings.

We’ll delve further into this topic next week.  Thanks for reading.

Kim

Professional Development , Leave a comment

Become a Mentor

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In Greek mythology,  Mentor was a trusted friend and adviser to Odysseus.  When Odysseus left Ithaca to fight in the Trojan War,  Mentor helped Penelope,  wife of Odysseus,   raise their son Telemachus.  He became a protector,  teacher,  counselor and trusted friend to Telemachus as the youth grew into manhood.  In Homer’s Odyssey the goddess Athena,  disguised as Mentor,  protects Telemachus as he sails the Mediterranean Sea in search of his father.

Perhaps you have reached a level of professional success where you feel ready to  “give back”,  to take someone less experienced under your wing,  show that person the ropes and set him/her on the road to great achievement.

Or perhaps you feel yourself stagnating professionally,  spinning your wheels and blocked from entering the winner’s circle.  You long for a rewarding project to sink your teeth into,  to demonstrate your relevance to colleagues and decision makers and remind yourself that you are still valuable and deserving of success.

Choosing to become a mentor may be the best response to both scenarios.  The process of mentoring provides many benefits,  tangible and intangible,  for both mentor and protegé. 

The less experienced and often (but not always) younger protegé will learn to hone his/her business acumen,  receive introductions to those who can help further his/her goals and finesse the unwritten rules on which success  so often hinges.

The mentor will likewise benefit handsomely.  Strengthened leadership skills,  such as the opportunity to gain a fresh perspective on one’s leadership style or learning to relate to,  collaborate with and/or manage colleagues  and workers from backgrounds other than one’s own,  are among the more practical benefits that accrue to a mentor.

Mentoring can help you bridge the generation gap,  become more attuned to gender differences as they relate to expectations or perspective and break down barriers between you and those of other ethnicities and religions.  As our nation’s workforce becomes more diverse,  these competencies can only grow in value. 

Moreover,  your protegé will no doubt have a few skills to teach you and may be able to introduce you to a few of the right people as well.  You’ll gain an ally,  expand your professional network and influence,  enhance your reputation and leave a lasting and positive legacy. You’ll experience the deep satisfaction that comes from seeing those whom you’ve mentored succeed,  perhaps beyond what they dared to dream.  Formerly dismissive decision makers may come to view you in a new,  more favorable,  light.

So share your wisdom and experience and help someone who needs support and guidance to achieve their goals.  Challenge your protegé to think in new ways,  consider options previously unknown,  open up to new perspectives,  gain new insights  and develop judgment and confidence.

When you notice someone who is bright,  talented and motivated,  yet seems to need some  wise counsel,  get to know that individual.  See if the two of you click,  if the communication between you flows.  Asses how that person responds to and processes advice.  

Be advised,  however,  that a potential protegé could reject that role,  or prefer to not go there with you.  Respect boundaries and if the mutual agreement is there,  gradually ease into a mentoring role.  Both you and your protegé will receive many benefits and it will be a feather in your cap.

Thanks for reading,

Kim

Marketing Leave a comment

Green Sustainable Freelancing

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It is always necessary for us Freelancers to stay on top of trends and work to create conditions that generate billable hours.  If you haven’t done so already,  prepare to investigate how your skills can be advantageously applied to green economy and sustainability movements that are hatching in your locale.

President Obama has made the encouragement of green and sustainable business practices a priority of his administration.   Throughout the country there is much talk and some tangible actions that could possibly achieve his goal. 

The time is ripe to position yourself to grab some of the dollars that are being allocated to the cause by taking courses,  obtaining certifications and of course networking,  to let prospects know that when green and sustainability projects are in the budget,  you are the right person to call.

The first thing you’ll need is information.  Pay attention to green business and sustainability conferences in your area and search your local business press for relevant articles.   Get current with the names and goals of key players,  and think about how you can contribute.   Refine your elevator pitch to promote your new emphasis.

Visit the GreenBiz website http://greenbiz.com.  The site is an excellent resource for Freelancers who are trying to figure out ways to cash in on the green phenomenon.   GreenBiz.com features numerous useful articles that discuss subjects such as the role of  IT in helping businesses go green,  how to create a marketing strategy that incorporates green values into a brand and how to devise clever advertising strategies that communicate green benefits to a target audience.

Green For All  http://greenforall.org  is an Oakland, CA based not-for-profit organization that identifies green and sustainability themed jobs,  business and investment opportunities and works to build bridges within the various sectors of the green economy.   For specific info,  you’ll have to join their mailing list.

There is also a green business chamber of commerce,  EcoChamber http://ecochamber.com.  The Miami based group is the first and only chamber of commerce with the mission of promoting the green and sustainability movement.  EcoChamber is dedicated to helping businesses create and implement sustainable and environmentally friendly business practices while maintaining,  or improving,  profitability.  EcoChamber claims to be global,  but I could find no evidence of activity outside of Miami.  Perhaps as funding becomes available,  the group will expand its reach.

How you tap into the sustainability/green economy will,  obviously,  depend upon your specialty,  experience,  and relationships.  Here are a few sectors to explore:

Banking and finance

We all know that banks are not lending a lot of money these days,  but  they are favorably disposed toward financing green economy businesses.  Venture capitalists are likewise interested in entertaining a good pitch from an entrepreneur with a promising concept for a green business.  The NASDAQ stock exchange provided serious validation for the movement when it recently launched an index to track green economy businesses.  There are even a couple of hedge funds that focus on green and sustainable industries.

Energy efficiency / renewable energy

Major public investment and the growing availability of financing are driving the renewable energy and energy efficiency market.  Some of the money floating around is earmarked for training not only workers but also entrepreneurs.  Pay attention to local government info and nonprofit groups.  Maybe you can obtain a certification for free,  or at a reduced cost.

Health and wellness

Human Resource  specialists are convincing company directors that a healthy workforce is  more productive and easier on health insurance premiums.  Employee wellness programs are a growing phenomenon in businesses large and small.

Information technology

Reducing the carbon footprint of  IT and incorporating energy efficiency are on the to-do list of most companies.  That Chief  Information Officers and others in IT should partner with other departments across an organization as sustainability and green business best practices are being formulated is gaining traction.

Manufacturing

Former manufacturing centers across the country are  evaluating the possibility of using green businesses to ameliorate the  exploding unemployment that led to poverty,  decay, crime and eroding populations.   Detroit is taking the lead in the revitalization process.

Thanks for reading,

Kim

 

Survival Strategies , , Leave a comment

Your Ad Here

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While we’re on the subject of making the most of what you’ve got and monetizing resources wherever practical,  let’s talk about renting out advertising space in your virtual world.  We’ve all seen the sponsorship promos, banner ads,  hyperlinks and ad words on the websites,  Facebook pages,  blogs and newsletters of nationally known Freelancers.   Some of you may also have seen advertisements or hyperlinks on a colleague’s  site.  As everyone digs deeper for revenue,  we might see a lot more of same.

I’ve spotted banner ads on the sites of three Freelancer colleagues who specialize in PR,  marketing and executive coaching.  The good news is that all chose advertisers whose product line is complementary to their business.  The not-so-good news is that two of the three websites no longer look classy.  In this case,  it’s seller beware.

That said,  if you select your advertisers well and refrain from overloading your site with ads,  you can always try this on for 6 months.  The money you make will no doubt be useful.  Placing ads on your website will create a small and steady cash flow that can make a real difference in your ability to sleep nights. 

The first thing to consider is what you have to offer your new prospect,  the advertiser. The number one criterion of ad placement is the presence of the desired demographic.  Sign up with Google Analytics and  demonstrate to advertisers that your e-world attracts a large and loyal following of people who can potentially become their customers.  The amount of traffic on your site will also help you to determine advertising rates.

Next,  confirm that your site hosting platform will support advertising.  For example,  if WordPress hosts your website,  be aware that like this blog,  it’s probably operating on the  .com side,  which is free,  upgraded and backed up regularly and very user friendly.  It will be necessary to migrate to the  .org side,  which is an open source,  customizable hosting platform that offers more advanced options,  such as the ability to support what is entailed in advertising.

If the concept still looks feasible,  then decide where the ads can be placed.  Look at your home page and measure the available space.  Is there room for a banner ad or two,  or will the less intrusive text option be more to your liking?

If you have a content management system and you’re good with graphics,  experiment with your home page layout and eliminate or relocate certain text and photos to create more potential ad space.  Think right side or bottom of page for banner ads.

Research shows that ad words are best used on sites that generate huge traffic.  They are a pay-per-click option with a low response rate,  so big numbers are needed to make ad words profitable for both parties.

Now it’s time to give serious and careful thought to the types of businesses that you would be comfortable having as advertisers.  Give still more thought to your sales pitch.  As always,  it will be imperative to define what’s in it for them:  the right demographics and a popular site. 

Establishing a flat monthly rate based on the size of the ad,  with discounts given for multi-month commitments, is the easiest payment structure.  See the rate card and ad contract of a local newspaper for guidance.  You can set up a PayPal subscription for billing and payments.  You are further advised to set up a separate account for each advertiser,  so that site stats can be checked and ad start and end dates can be reviewed.

However,   it may be wiser to sign up with an online advertising management company.  Certain basic features of ad management are free,  but it may be worth paying for additional  features like billing.  That way,  if an advertiser cancels and you forget to take the ad down,  you won’t find yourself giving away free space.  Agencies to investigate include Etology,  Commission Junction,  Adbrite and Linkshare.

Because businesses are always in search of an effective way to reach customers and enhance brand awareness,  ads and sponsorships within the virtual world continue to proliferate.  Some businesses even provide a special link,  sometimes to a particular website page,  so that they can track advertising performance on your site.

It is imperative to consider the possible impact that virtual ads could have on your business.  For those who provide a certain type of product or service for a certain clientele,  including ads on a website will be a delicate balance.  The painstakingly cultivated perception of value and quality could be undermined by the presence of ads on either a website or newsletter.  Take care not to cheapen your brand in exchange for a few extra dollars a month.

Thanks for reading,

Kim

Marketing Leave a comment

Work Your Email List

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 I descend from a long line of New Englanders and we are known for our thrift.  When the collars of his dress shirts frayed with age,  my father (who was actually a New Yorker,  but knew how to squeeze a penny until Abe Lincoln yelped) would have the dry cleaner turn them.  Presto,  add a few more good years to a useful item.

Mom served any leftovers from the big Sunday dinner for Monday night’s supper.  If we didn’t finish them off at that sitting,  she was not ashamed to throw them at us again on Wednesday or Thursday.   Mom and Dad were born during the Depression and they did not believe in wasting valuable resources.  Use it up,  wear it out,  make it do.  As we slog through our recession,  I suggest that a revival of that credo is in order.  It is time to make the most of what you’ve got.

One valuable resource that we all have is our list of email addresses.  Consider putting them to work in an email marketing campaign that will enhance your other promotional activities.  The practice of email marketing continues to grow.   When executed properly,  it can be an effective way to communicate with your target audience.

The conversion rate will probably not exceed 2% ,  but that matches the results of  a typical direct mail campaign.  Moreover,  email marketing is both less expensive and much more environmentally friendly than direct mail.

An email marketing campaign provides yet another way to keep your name in front of  the right people,  serving as a reminder that you remain a viable player with valuable services to offer.  Email marketing keeps your brand visible and that is utmost for every Freelancer.

How to ensure a mailing list with money-making potential?  Use an opt-in approach,  to avoid annoying people.  You only want to contact those who want to hear from you.  Hire a web developer to add a sign-up function to your website home page.  When exchanging cards with new colleagues,  request permission to add them to your mailing list.

Add your LinkedIn connections,  clients and colleagues,  plus selected friends and family members.  Always include an unsubscribe feature in your communications,  so that those who choose to opt-out can easily do so.  Purchased email lists are not recommended,  since those people do not know you.  Organic growth of your list is best,  so take the time to cultivate it.

 As you build your list  (and before  you add a sign-up to your website),  think about what you should communicate and the best delivery system for your message.  Put yourself in the place of the recipient.  What timely and useful information will best serve their needs?  What  “call to action”  might pique their interest?

Engagement is king in email marketing.  Take the time to carefully consider what you would like to achieve and how to communicate your message most favorably.  Is  a monthly or quarterly newsletter something you have the time and talent to produce?  Perhaps handy factoids plus links to relevant articles,  doled out every six weeks,  will be a better fit for both you and your target audience?  Give it some thought.  Whatever you do,  just remember to always include a link to your website…

…because that is one way to measure the response to your campaign.   Google Analytics,  e.g.,  will report the stats on the campaign’s impact on visits to your website,  pages that get the most viewing,  etc.  Receiving an inquiry about your services from a prospect is another sure-enough good sign that you’re doing the right thing and signing a client is,  needless to say,  the ultimate validation of your genius!

You are perhaps now intrigued by the email marketing concept,  but wonder if you can handle it by yourself.  It is possible to outsource the project,  for a more or less reasonable fee.  I recently heard about a company called EyeMail http://eyemailinc.com  that’s gaining a good reputation for creating smart email marketing campaigns. 

If you’d like to create a real splash,  EyeMail will even add audio and video clips to what you send out.  Most of all,  I’ve heard that they’ll work with you to create the content and delivery system that will best support the rest of your promotional activities.   Other options are Constant Contact and HubSpot,  both of  whom have great track records for devising savvy email marketing campaigns.

I’ve only used email marketing sporadically,  primarily to broadcast public courses that I’m scheduled to teach or speaking engagements.  I’m kicking around the idea of establishing a  consistent presence,  whether I do it myself or hire a specialist.  To those of you on my list,  stay tuned.

Thanks for reading,

Kim

Sales , Leave a comment

Because I Said So

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Oh good,  you’re back.  I guess that means you’re still in business.  After last week’s posting about the shrinking numbers and dismal prospects for Freelancers,  I thought you might have decided to cash in your chips and interview for a job at Kinko’s…

Well,  since we’re still in the game,  let’s make the best of it.  Making the best of it definitely entails getting people to do what we want them to do,  maybe even when we want them to do it.  Wouldn’t that be fantastic?  I daydream about this kind of stuff all the time–especially when I am patiently waiting for a client to pay me what is owed.  Even more so when I am patiently waiting for two clients to pay me what is owed (like now).

Getting others to do what we want is all about the art of persuasion.  If we could get even one quarter of our clients and prospects to do what we want,  we’d all be driving Jaguars!

While browsing in a bookstore recently,  I happened upon an interesting book by Chris St. Hilaire,  who is a jury selection consultant and author of  “27 Powers of Persuasion:  Simple Strategies to Seduce Audiences & Win Allies” (2010).

In his book,  St. Hilaire points out that true persuasion is not about arm-twisting or even outmaneuvering your opponent.  Rather,  true persuasion is about creating consensus and unity of purpose.  The author recommends four key strategies that will improve your powers of persuasion,  applicable to both your business and personal life:

Emphasize the goal to bring all parties to agreement

When we go into a client meeting,  we tend to assume that all parties are on the same page.  Not so,  says St. Hilaire.  It is common for people to talk past one another,  wrapped in their inaccurate assumptions,  failing to hear what the other side has said,  failing to grasp important meanings and significance.

Negotiation failure that leads to a deal-breaker can result from incomplete or sloppy communication.  It could even appear that the other party has an entirely different goal for the project at hand.  This is a Level One misunderstanding that nevertheless has the power to derail you.  Avoid disappointment by briefly summarizing your goals upfront.  Ensure that the other party knows why you are there and you will move closer to getting what you want.

Use numbers to make talking points more powerful

Americans love to quantify things.  Numbers help people to define and measure both success and failure.  Judiciously inject a statistic or two (don’t overload) into your presentation and help your client or prospect to put your goal into perspective,  help him/her to visualize and compare your features and benefits to other available options and lay the groundwork for the acceptance of your proposal,  i.e.,  your goal.

Third party validation can bring others to your way of thinking

Presenting the expert opinion of a trusted and respected source who is presumed to be neutral and objective can make your proposal  look like the gold standard.  People are often reluctant to contradict the practices and opinions of those who are known to be smart and influential.  Do what you can to make it appear that your goals are on the side of the angels.

Silence can be your most effective technique

Learn to get comfortable with silence in a negotiating/selling situation.  According to St. Hilaire,  silence allows you to control a room without seeming aggressive.  The other party will almost always become uncomfortable and nervous and blurt out what they really think,  fear,  want,  or plan to do. 

Even if you don’t receive the ideal answer,  hidden objections will come to light,  giving you an opportunity to acknowledge and resolve them.  That greatly improves the odds for your success.

Thanks for reading,

Kim

Survival Strategies , Leave a comment

To Be, or Not To Be

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I was surprised to learn that the number of Freelancers in the US has dropped to the lowest level in eight years,  down 13%  from a record high of 9.98 million in 2006.  The Department of Labor recently reported that as of August 2010,  there are now 8.68 million of us.

Because full time employment is not materializing for many citizens,  I assumed that the survival instinct would kick in and induce laid off salary men/women to assess their skill sets and figure out a way to package and promote their acts.  That’s what brought me to Freelance Nation.  But the stats have proved me wrong.

It is true that self-employment typically increases in the aftermath of a recession,  when laid off workers are unable to get rehired and thus venture out on their own.  But in this recession,  a variety of factors have weakened the demand for Freelance services,  causing many to choose alternate paths.

Some are maxing out their unemployment benefits as they sign up for temp work or settle for low end hourly wage jobs,  seeing those roads as their best,  albeit unsatisfactory,  survival options.  They don’t see much financial potential in either Freelancing or setting up a small business.

Diminished credit and poor sales are stifling the growth of small businesses.  A recent report issued by the National Federation of Independent Business Owners shows that 31%  of small business owners say that poor sales is their company’s single most important problem.

This news is interpreted by economists and labor experts as a sign that economic recovery is not just around the bend.  There is evidently not enough money being spent by consumers to sustain the survival of many small businesses.

However,  easier lending terms could encourage small business owners to make capital improvements and staff additions that will help to improve competitive positioning and perhaps attract more customers.  The Federal Reserve recently confirmed that about 20%  of banks are making commercial and industrial loans more available to small businesses for the first time since 2006.

Unfortunately,  large and mid-size companies prefer to play the wait and see game.  They are waiting for the outcome of the mid-term elections,  wonder what the newly reconfigured Congress will do about economic  initiatives (will the Stimulus Bill be extended?),  they wonder about taxes and wonder what the new health insurance regulations will mean to their bottom line. 

The big boys do have money to spend.  They slashed payrolls by laying off workers whether or not that strategy was necessary for the organization’s survival.  They limited hours worked per week,  limited or eliminated raises and off-shored as many functions as possible.  Paradoxically,  productivity remains high and continues to increase,  as businesses get more work out of their leaner and meaner staff.

There is precious little incentive to hire under these conditions.  Why bother? Those at the top of the pyramid are free to put still more money into their bulging wallets.  That explains why the only healthy segment of the real estate market consists of 7 figure properties.

These practices have left many current and aspiring Freelancers in the lurch.  Although the Fed states that lending to mid-sized and larger firms has over the past six months begun to ease,  there remains a marked resistance to green lighting the projects that Freelancers depend on.  A hard freeze is in full effect and it shows no sign of abating.

According to Scott Shane,  professor of economics at Case Western Reserve University in Cleveland,  the failure rate of self-employment is significant during this recession and economic  indicators do not point toward a quick recovery.  Only when larger companies,  those considered bell weathers and thought leaders,  begin to hire again will demand for Freelancers increase.

That said,  not all Freelancers are suffering.  A fortunate few are having their best year ever.  Recently,  I was chatting with a friend who makes and restores fine string instruments.  He does not lack for work.  I am also aquainted with a market researcher, with  someone who arranges and supervises the relocation of scientific laboratories and with someone who helps manufacturing facilities comply with environmental regualtions.  All of them are enjoying very healthy billable hours.

It just goes to show you,  in every kind of economy, there are always those who make money.  I just wonder when it will be my turn?

Thanks for reading,

Kim

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Now is the Time to Take Control of Your Time

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The secret sauce of effective time management is discipline.  The cruel truth,  my child, is that if you want to get more things done,  you must have the discipline to get your ass out of bed,  often before the sun comes up.  This is a habit best established when the days are getting longer.

According to new research by Christoph Randler,  professor of biology at Heidelberg University in Germany,  morning people are more proactive and therefore more successful in their professional lives.  Morning people anticipate problems and try to minimize their impact;  spend time identifying long-range goals;  and feel in charge of making things happen.  So rise and shine, cupcake.

Another time management essential that you must have the discipline to incorporate into your schedule is transition time.  Whether moving from one task to another or traveling from one meeting to the next,  the only way to ensure that you will be efficient,  productive and get where you are going on time is to take into account each time consuming step of the process.

In other words,  be realistic about how long it takes to go places and do things and give yourself adequate preparation and execution time.  Avoid over-scheduling.  Build in little cushions of time where possible,  to better manage annoying,  schedule-destroying delays like lines at the post office.

The idea is to successfully roll through tasks and appointments and preserve your sanity,  if not your sense of humor, along the way.  Besides,  if there are fires to put out and you’re too tightly scheduled,  things will fall apart and you’ll be back where you started.

Oh , and manage your emails,  rather than letting them manage you.  Do not let them seize control of your day.  Particularly if you receive a huge volume,  assign 2-3 blocks of time each day for email read and respond.  Institute email triage.

If something time sensitive and high priority is on,  you may prefer to check for incoming messages throughout the day and decide what requires a faster response. While doing that,  delete the nonsense emails and lighten your load.  When answering emails,  respond first to the “short answer” messages and then tackle the “long answers”.

Some form of social media participation is now on every Freelancer’s schedule,  like it or not.  No one is sure what any of it does for business,  but very few feel confident enough to ignore it.  Keeping up with this stuff can siphon off much valuable time if you’re not careful.

Limit time spent on social media and while you’re at it,  think about the extent of your involvement and the ROI.  Do you really need FaceBook and Twitter?  Must you go through the LinkedIn Answers Forum every day?

Yet another source of time theft are manipulative,  controlling people.  You have no doubt encountered your share of those who feel entitled to dictate how you spend your time,  quickly  resorting to whining,  badgering and other forms of verbal arm wrestling to force you into doing their bidding.  They may be neighbors,  family members,  so-called friends  or clients.   Set good boundaries and be prepared for uncomfortable moments as you put a few people in their place.  Have the discipline to say “no” and stick to it.

Have the discipline to bring time management into your life.  Missed deadlines,  lost opportunities,  exhaustion and burn-out are not what we want.  Applying our skill set to work that we enjoy and generating an income that we deem satisfactory is what the Freelance life is all about.  Effective time management,  along with SMART goals and objectives—Specific,  Measurable,  Attainable,  Realistic, Timely— will help us get there.

Thanks for reading,

Kim

 

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The Time of Your Life

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Welcome back to reality!  Labor Day Weekend has come and gone and Summer has officially (although not technically) ended.  Like it or not,  we are in full business mode again.  Yet despite what the calendar indicates,  Summer’s slower pace may still cling to you like sand on your ankles and you might be having trouble getting up to speed.  Maybe some good time management tips will help you find your groove?

Freelancers are busy people.  Effective time management is important not only for our P & L bottom line,  but also for our spiritual and psychological health.  In addition to drumming up and working on billable hours,  it is equally important that we make time for our personal pursuits.

We owe it to ourselves to go to the gym or out for a bike ride,  participate in our children’s lives,  nurture our relationship with a special someone,  or recharge our batteries by maybe taking a nice walk.  Therefore,  it is imperative that we utilize our time efficiently,  so that important things get taken care of and we avoid running in circles,  which wastes precious time,  creates aggravation and eventually leads to burn-out.

But there is so much to do and it is easy to get overwhelmed.  On top of  billable hours,  we must network to remain visible,  attend certain conferences that help us build skills or prospect for new clients,  maybe prep for a speaking engagement,  keep up with social media and there are perhaps also board responsibilities that were taken on to demonstrate commitment to one’s community and expand one’s  skill set (and bring in a referral along the way,  we hope).

Then there are the administrative functions like invoicing,  paying bills,  calls and emails,  updating the website,  de-constructing the new health insurance options and planning and budgeting for next year’s marketing initiatives. 

Oh, and dare I mention housework,  laundry, cooking and grocery shopping?  Yikes! It’s enough to make you want to hide in the closet.  How can any one human being face this down? 

I suggest that Step One in getting your arms around all that you must do is to make a list and document major tasks and responsibilities,  so that you can visualize and make sense of your obligations.  Once your list is created,  separate business obligations from personal.  Red star all tasks that have a deadline  e.g.,  September 15 for filing third quarter taxes.

On the business side,  make separate categories for client billable time,  marketing/self promotion and administrative tasks.  On the personal side,  create categories for fitness,  household,  children, etc.  Next,  prioritize according to what must be done first and what brings (or can potentially bring) the best ROI to you.  Break responsibilities down into what must be done daily (emails),  weekly (children’s lessons/ sports),  monthly (networking/ board meetings) and quarterly (taxes). 

Block out corresponding time periods,  make calendar entries and build a daily to-do list schedule.  Examine your schedule and look for ways to be more efficient.  You may have always gone to the gym after work,  but might a time change be advantageous? Is there a Zumba class at 7:00 AM or Pilates at lunchtime? That change will free up time in the evening for other activities and will also ensure that you maintain your fitness regimen.  Or maybe now you’ll see that you can start one!

PDA electronic calendars and smart phone apps are now standard,  but I’ve found that posting on an office white board or old-fashioned desk calendar is especially helpful for remembering monthly and quarterly tasks.  It’s good to have it all there in your face,  a constant reminder of what you must do and when you must do it.

I’ll be back with more time management next week.  Thanks for reading.

Kim