Main struggle of freelancing is the ‘business’ set - bookkeeping, finance, etc.

Setting up the business structure (LLC v Sole Proprietor v DBA, etc).  Pass thru with an LLC provides benefits of an ‘entity’ - business address, accounts, cell phone pricing, acquire EIN for billing from an employer, writeoff direct to business entity, etc. Recommend CPA to follow business and guide growth.  Liability cushion of an LLC only provided if LLC is run as a ‘true’ LLC and not being run as a sole proprietor, organizational documents and structure established.

Colorado Secretary of State website for all documents, has wizard to work you through the process.  $50 application, links you to Federal site for getting your EIN and provides all pdf docs required.  * Organizational Agreement (not official) versus Articles of Organization (official, required).  Library provides free resources, research and guidance.  Corporation poorly affects taxes unless your employee numbers require that structure.  Corporations taxed at a higher rate.

Self employment tax is 15.3% currently.  Pay quarterly versus annually (although IRS does allow it, not a good idea).

If you have a qualified retirement plan (as a self-employed individual) you are eligible to deduct your contributions (applies for SEP IRA, Solo-K or Traditional IRA but not ROTH IRA).  SUGGESTION:  Stash money away thruout year, following year take one time deduction (up to $___) amount for 1st time homebuyer. If replaced before April 15th, no implications for your taxes.

Can ‘upgrade’ from LLC to Corp but not backwards. Must dissolve Corp. first.

How to find a good CPA?  - Twitter, referrals.  Costs $300-400 annually, saves substantial amounts.

OUTSOURCING As a Freelancer

  - Accounting

  - Legal

  - Web Design

  - Anything you don’t enjoy doing

  - IT (rec: SimplicityTech)

  - Backup (rec: MozyPro, Carbonite, GoogleDocs/Syncplicity, __ )

TOOLS Needed

- Invoice Tracking/ Customer Management System (rec: GetHarvest.com or Freshbooks)

- Contracts (graphic design handbook, NOLO eBook, printablecontracts.com)

- Insurance (E&O, liability for physical biz, insurance for stuff, don’t rely on renters insurance as it won’t cover ‘business’ assets)

Psychology of Freelance

YOU ARE YOUR FIRST PRIORITY CLIENT

- Freedom v structure

- Deadlines and scheduling

- Cash Flow and building reserves, understand your billing terms

- Up front payments, deposit and Net 0 or 30 (the larger the clients, the longer the delay of payment)

- Make it easy to get paid (paypal, merchant services, etc). Write off your paypal service charges.

- Learn the word “NO” and how to use it without guilt!

- ‘Frontstabbers’ are those who will get straight to the ‘gut’ but with honest feedback.  A mentor with an open pass to say what needs to be said.