Don't Be Afraid to Talk Money, Part 3: Know Your Daily Nut

Welcome back to the Blogathon! We're back to talking about money. On Friday, I posted about the importance of knowing what a market pays before you write for it; yesterday I described four ways to determine your hourly rate. 

There's another figure you should have in mind as well, especially if you're writing with an end goal of making money (and if you're reading this blog, I assume that's the case!). It's what I call your daily nut, or the amount you have to make to reach your annual income goal. 

To determine your daily nut, you do two things: number one, determine what you want to make this year. Then divide that number by the days you'll work this year; the result is your daily nut. 

Here's an example. Let's say your income goal is $60,000 this year (that in fact is my goal this year, working about 15 hours/week). And let's say that you're planning to work 240 days out of the year. That's Mondays through Fridays, with four weeks off for holidays and vacations.

Grossing $60,000 a year comes to $5000 a month, or $250 a day. So your daily nut is $250. If you want to make $30,000, your daily nut is $125. And if you're shooting for six figures, your daily nut is $450. 

Every day, you should average your daily nut, or you won’t hit your financial goal at year's end. So, a content marketing assignment that pays $1,000 should take you about four days' worth of work. A book proposal that pays $4500 should take about 18 days' worth of work, total. Of course, not every project will work out exactly like this--some will take more time, some will take less. The idea, though, is that you average a certain amount each day.

Readers, your assignment: determine your daily nut. 

**As always, if you want to make money as a freelancer, I recommend these three books:  Dollars and Deadlines: Make Money Writing Articles for Print and Online Markets, written for brand-new freelancers in search of their first clips. Six-Figure Freelancing: The Writer's Guide to Making More Money, Second Edition is a freelancing classic that helps both new and experienced writers boost their bottom line. And my latest book,Goodbye Byline, Hello Big Bucks: Make Money Ghostwriting Books, Articles, Blogs and More, Second Edition, shows how to break into the ghostwriting/content marketing field. 

Yes or No? Using The 4-Part Work Test

The beginning of the year is a good time to consider what type of work you're doing, what type of work you'd like to add to your freelance repertoire, and what type, if any, you'd like to phase out of. 

When I started freelancing, I said, “Yes, please!” (think Michael Myers in Austin Powers) to any paying work that came my way. I was trying to make money however I could. My financial goal my first year was to make … wait for it … $10,000. I have no idea why I chose that number, other than it was a nice, neat one and seemed realistic for someone launching a freelance business with no connections, no experience, and no clue.
 

          

However, having a financial goal (even a small one) made me focus on money, and it meant that every assignment I took that first year had to pay something—even if it was just $25 or $35 for a short piece for the local paper. Even the “small stuff” moved me toward making my income goal that first year. I exceeded my initial goal, grossing more than $17,000 my first year of full-time freelancing. 
           

Today, with a financial goal of $60,000 (which gives me a daily nut of $250), I can't say yes to everything, or even most things. Over time, I've developed a four-part test I use when deciding whether to take on work:
           

1. How much money does it pay? If you're freelancing to make money--as opposed to for fun--this question should be obvious. You should always be thinking about your bottom line.   

2. How long will it take? I've found that the work I've done for national magazines takes far more time (including the pitching and follow-ups) than the work I do for smaller publications. Yes, the big magazines pay more, but I'm always looking at my hourly rate, not just the size of the check. And sometimes the magazines that pay less per word actually pay more per hour.)
         

  

3. What's the PIA factor? PIA is my shorthand for Pain In the, um, rear-end. Some clients and editors are annoying to work with. I had an editor I worked with who would take forever to respond to queries, then assigns stuff with ridiculously tight deadlines. I didn't mind the fast turnarounds as I'm a speedy researcher and writer, but there's definitely a PIA factor to working with her. And if that PIA factor on a particular project is high, I'm either going to get more money … or I might even walk away.
     

A caveat, however--you can't always determine PIA factor at the outset of a project. Sometimes the client or editor who appears to be a dream turns into a nightmare. What do you do then? That's the subject of a future post.        

4. Will this work further my career—and if so, how? So, for example, when I wrote my first book, Ready, Aim, Specialize, I received an advance of only $2,500. I spent months researching (I interviewed 56 sources!) and writing the book. My hourly rate was abysmal. I made more as a teenaged lifeguard.

            But here’s the thing. I wanted to start writing books, and I had to begin somewhere. So I said yes to the book, added author to my CV, and even made royalties from it. My first book led to more than a dozen others, which has made the first low advance worth it.

            As a freelancer, it’s within your control to take on work or turn it down. The four-part test has helped me stay on course and prevent me from agreeing to work based only on what it pays. I suggest you look at other factors as well to help you determine what projects meet your short-term and long-term goals.

            Readers, what say you? Do you use a "work test" or something similar before saying "yes" to an assignment. Please comment below and let us know! And second, if you have a topic you'd like me to cover here in coming months, please let me know. Thanks and have a great week. 

           **This post was drawn from "The Four-Part Work Test" from Writer for Hire: 101 Secrets to Freelance Success. If you're new to freelancing, you'll find great advice there as in Dollars and Deadlines: Make Money Writing Articles for Print and Online Markets. 

5 Smart Things to Do Before 2014

Are you ready for 2014? Let me tell you, I've had somewhat of a "craptastic" year and I am more than pleased to welcome in 2014! But while you're celebrating the New Year, I'd suggest you do the following before January 1 arrives, or shortly thereafter: 

1. Get a jump on your taxes. I never wait until April to do my taxes. I like to figure out my gross income and calculate a rough estimate of my net income before the end of the year. Then I send that number to my accountant for an estimate of what I'll owe. Sometimes the number is scary, but I'd rather know that going into the new year than wait and be surprised sometime in 2014. And besides, I use that tax figure to help determine how much I put in my SEP, or self-employment plan, at year's end. 

2. Invest in your career. You can write off legitimate business expenses before the end of 2013, so this is the time to upgrade your computer, purchase software, buy writing-related books (like, gosh, I don't know, Six-Figure Freelancing, Second Edition or Goodbye Byline, Hello Big Bucks, Second Edition! ), and other work-related products. I just stocked up on printer cartridges and paid for my annual membership to ASJA. Every work-related expense reduces your tax liability come 2014. (And see below for the half-price offer in Improvise Press' first two titles.)   

3. Review your year. Every year, I clarify where my money came from. I usually send a holiday card and/or gift to my "whales," or most important clients. I also look for "lessons." Did I take on any projects that turned out to pay a lower hourly rate than I expected? Are clients asking for me to do work I need to gain more experience with? Did I have a steady stream of work, or was I facing a "feast-or-famine" scenario much of the year--like this one? What was the most worthwhile work I did? Which work paid the best? Which seems to have the most potential? Is there any kind of work I want to cut from my roster? 

4. Set goals for the coming year. If, like many serious freelancers, you set an annual income goal, don't forget to calculate your daily nut. My goal in 2014 is to make $60,000, which means an average of $250/day. Average that figure throughout the year of 2014 and you'll meet your new income goal. Think about the other objectives you have as well. Do you want to branch into content marketing this year? (That's one of my goals.) Do you want to become an e-book author? Is this the year you get serious about writing fiction? Should you spend more time on social media--or at least use it more effectively? Decide what your goals are, and put them in writing. 

5. Take time off. Every year, I take the week between Christmas and New Year's as vacation. Before I had kids, I used this week to sleep in, spend time with my husband, watch movies, and set goals for the coming year. I even read for pleasure! Gasp! Now with the kids much of my week is spent entertaining small children, but I do take some off during this week--and just as important, I'm planning when I'll take time off in 2014. 

Too often as freelancers we wind up working all the time--nights, weekends, first thing in the morning--and that's a recipe for burnout. I know I'm more productive when I get away from my computer, so I give myself at least one day (usually Saturday or Sunday) where I do no work at all except for checking my email first thing in the morning. Unplug yourself on a regular basis. I promise it's worth it.  

Readers, I hope 2013 has been a successful, productive year for you. If not, focus on 2014, and tune in next year for more practical, proven advice about how to make more money in less time as a freelance writer. And comment below to tell me what topics you'd like to see me cover here in coming posts!  

Finally, there's less than 48 hours left on my half-price offer on print editions of Improvise Press' first two titles: Dollars and Deadlines: Make Money Writing Articles for Print and Online Markets or Six-Figure Freelancing: The Writer's Guide to Making More Money, Second Edition. Until midnight on December 31, 2013,  you'll get half off both titles when you order directly through ImprovisePress.com and use the discount code CHICKENS. 

Setting your Freelance Goals for 2012

          This is my favorite day of the year. To me, January 1 represents promise, potential, possibility. It's also when I set my goals for the year, and I suggest you do the same for your career. 

           Consider the Past           

           To look forward, however, you first must look back. At the end of each year, I review what types of writing work I performed, for whom, and how much money I made as a result. I also add up the amount I made from selling reprints and from speaking engagements so I know how much I’m making from both activities, and I look for trends, both good and bad.

Another issue to explore is how you spent your time last year. Look at when projects were assigned and when you turned them in. Are you turning around your profiles quickly but spending too much time on shorter, lower-paying pieces? Are those heavily-researched business articles really worth spending so much energy on? Remember that it’s not how much you make for a particular project—it’s what your hourly rate turns out to be.

            Finally, how diversified were you this year? Were you working for only a handful of clients or for dozens? (The former may be unavoidable if much of your work is writing books, which take much longer than articles.) Did you have lots of short, lower-paying assignments or did you focus more on bigger projects or feature stories? Does your income come from a variety of sources or only a few?

Consider the Future

So, now you know where your money came from. The next question is how much you want to make this year—and what kind of work you want to perform to make it. Should you focus your efforts in a particular area or would you rather try something new? Are you feeling burned out and want to switch gears—and try writing fiction, for example, instead of essays? Consider too how much time you can dedicate to “projects of the heart” compared to the work that pays your bills.

After you’ve set an annual income goal, determine how you’ll get there. How many hours must you write to earn that income? If you’re freelancing fulltime, the answer may be as many as necessary. Having a daily financial goal can help keep you on track. If your goal is to make $30,000 a year from freelancing, that averages to $2,500 a month or $125 a day (with four weeks off during the year.) In other words, if you can average that amount of income 240 days a year, you can make $30,000 this year. Make sense? 

Strive for a Balance  

By setting monthly, weekly or daily financial targets, you’ll be on your way to achieving your overall financial goal this year. But remember that your writing career isn’t only about the money. Your goals may also include non-financial ones like spending more time writing fiction or developing a stronger voice. (One of my goals this year is to finish my latest novel, which has been languishing for months.) 

That's why I suggest you build writing time into your schedule for projects that don’t produce income (at least not yet) but are important to you for other reasons. (Need a boost? Check out Kelly Stone's 90-day writing challenge that launches tomorrow.) Even though I write for a living, I give myself time to write for myself as well. After all, if you only focus on the bottom line and continually take work that bores or frustrates you, you’ll be likely to become bored and frustrated with your career as well. 

Instead, strive for a balance between the money you want to make and the work you want to do—and both you and your bank account will be better off in 2012. 

** Want to publish a book but aren't sure which route (i.e., traditional publishing, print-on-demand, e-publishing, or self-publishing) is right for you? Check out my Writer's Digest webinar on Thursday, January 5. You'll learn about your book publishing options today, and their pros and cons. 

10 Smart Rules of Thumb for Freelancers

In last week's post on how to write better service articles, I mentioned one of my rules of thumb--on how many sources I typically interview for a nonfiction article. (Mine is one or two sources for stories of up to about 500 words; two to three for stories of 500 to 1,000 words; and three to five for 1,500-word stories. While some stories require more sources, I don't want to waste time over-researching a story by interviewing sources who won't make it into the piece.

But I've developed plenty of other rules of thumb over 14+ years of freelancing as well, including:

Reaching word count. My rule of thumb for word count is 10%. That means I'll turn a story in at up to 10% over word count without worrying about it. (Sure, I shoot for as close to word count as possible, and I never turn in story under word count, but that 10% bumper means I don’t fret if a story is running a little long. (And yes, every word counts toward the total, but I don't count headers for sidebars and boxes.)

Writing queries. My query rule of thumb? Every query letter has four parts:

*The lead, which catches the editor's attention;

*The "why-write-it" paragraph which makes the case for the story;

*The "nuts and bolts" paragraph, where I explain how I plan to approach the story, describe what type of sources I'll interview, how long the story will be, and where I think the story belongs in the magazine; and

*The ISG, or I'm-so-great paragraph where I highlight any relevant background/experience or expertise I have in the subject area.

Contacting sources before a pitch. My rule of thumb, also known as the McCaughey Septuplets Rule, is that I contact sources before I pitch a piece if the story turns on their involvement. In other words, if I can't write the piece without their input, I make sure ahead of time that they're willing to be interviewed.

Following up. My rule of thumb is to follow up on queries and LOIs to new-to-me markets in about four weeks; I follow up on queries to my regular markets in two to three weeks.

Pitching new queries. I've already told you the best time to pitch a client. That's why another of my rules of thumb is to always have an "idea in my pocket" ready for when an editor accepts a piece.

Touching base. I focus on building long-term relationships with clients, and one of the ways I do so is by staying on the radar. My rule of thumb is to touch base every two or three months to "check in" or pitch new work.

Putting things in writing. I recently had an email from a fellow freelancer asking me about a publisher I'd worked with. I'd had a less-than-happy relationship with this particular publisher, and wrote her back and told her I'd be happy to talk with her by phone about my experience. My rule of thumb here is to never put something negative in writing--you never know who may end up reading it.

Leaving the house. I try not to, unless I have to. My rule of thumb here? I won't meet with a potential ghostwriting client in person until I know what his or her budget is; otherwise, there's a good chance I'll waste my time.

Calculating my daily nut. Regardless of my annual income goal and how many hours I work, I always have a daily nut, or an amount I have to average to make what I want that each. My rule of thumb is to take my overall income, and divide it by 240 (48 weeks of work, with four weeks off for vacation and "holidays.").

***Readers, what about you? Do you have your own rules of thumb that you find helpful? Feel free to share them here!

And finally, I'm talking to a potential client tomorrow but in the meantime, am still looking for new ghosting clients. Please keep me in mind if you know of someone looking for a talented, experienced ghostwriter/collaborator (especially in the health, fitness, wellness and nutrition fields)--and thank you to Susan for passing my name along to a potential client! If you want to get started in this lucrative field, you'll want to buy Goodbye Byline, Hello Big Bucks: The Writer's Guide to Making Money Ghostwriting and Coauthoring Books (Kindle edition).

Your Daily Nut--And How to Track It

I often talk about dollars/hour as being a more accurate reflection of what a project is worth than dollars/word. But there’s another figure freelancers should keep in mind: what I call their daily nut.

The daily nut is the amount you have to average to meet your annual income goal.

Say your annual income goal is $60,000 (and remember that one-quarter of freelancers surveyed make $60,000+), and you're planning to work 240 days out of the year. That's Mondays through Fridays, with four weeks off for holidays and vacations.

Grossing $60,000 a year comes to $5000 a month, or $250 a day. So your daily nut is $250. Instead of thinking about making $60,000, which can seem unreachable, focus on meeting your daily goal—and then track your progress.

Every day, you should average your daily nut, or you won’t hit your financial goal at year's end. So, an article that pays $1,000 should take you about four days' worth of work. A book proposal that pays $4500 should take about 18 days' worth of work, total. Of course, not every project will work out exactly like this--some will take more time, some will take less. The idea, though, is that you average a certain amount each day.

So, question one, what's your daily nut? And question two, did you make it today?