question for freelancers...

[surflugen]

I have a possible opportunity to work for a design firm as a full time freelancer.
I understand what that means as far as working as a general contractor and that my taxes, benefits, and such will be up to me to track and pay for. Could any of you who work in similar situations give me advice on what I should do to make sure I get going on the right path to running the show on my own. Business licenses? Insurance? (I will most likely fall into my wives insurance), Taxes and Accountants?

[nycwriters]

Surf, from a management pov, it sounds to me like they're trying to get a full time employee-employee without having to pay all the benefits.

I understand, when you freelance, that full time work IS full time work -- but by not having to pay you benefits or let you join in contributing to a 401K plan -- or any of the other perks that a regular employee would get .... well it feels like they're ripping you off.

Have you asked them why they won't just hire you as a regular employee? Or is this something YOU don't want?

Also, if you go into their office a certain number of days and work for them there, I think there's some rule that after 90 days or something, you are considered a full time employee-employee -- but not sure on that, would have to look it up, but I recall reading that somewhere and vaguely remember having to deal with it at my previous job with its freelancers.

[masterofNone]

yeah the IRS gets very sticky over the definition of an employee. if you're working from home it's not too hard to distinguish yourself from a FT worker but if you're working on site it becomes less clear. i've seen the IRS demand that a company withold taxes for freelancers to make sure they got their take.

when i became an independent, i doubled my hourly rate in order to cover equipment, insurance, etc. when you work for a company they charge the client 2.5 to 3 times your hourly rate... but as a contractor the only add on 10- 20%, so the client ended up getting a better deal. if you're not getting significantly more per hour freelancing ends up being a bad deal.

[Audreyvgs]

I hate gettin those L1011's and WD40's at the end of the year. Better get an accountant like I did. Get yer advice from the start there.

That is, of course if we don't have a resident zemonkey accountant on the board........oh, hahahahahahahahahaHAHHAHAHAHAHAHAHAHAHAHAAHAHAHAHA HAHAHAH!

[noxxville]

Not to mention that, as a freelancer instead of a full-time employee in this situation, they are also more likely to drop you as there is not as much invested in your hiring. Hiring a full-time employee takes hours and paperwork. While it doesn't see like much, when the time for cuts comes, it's always contractors and freelancers that fall.....I watch it happen almost weekly. And don't let them give you the false security of a "contract" as that "contract" will usually state a period of time that you are hired for OR "until completion of contract". I've seen the "completion" happen much sooner than expected.

On the other hand, being freelance does offer you a certain amount of freedom, and that is hard to counter. Just make certain that you keep money aside out of every paycheck (I always hold 35% minimum) to cover taxes and other expenses. Keep track of every little thing that could even possibly be related to business, it may come in handy come tax time.

As far as business licenses go, you need to check with your city/county as they are all different. If you are just working as a sole proprietorship under your own name, then legal filings are fairly simple and you can just use your SS# as your taxpayer ID. But if you chose to go by any fictitious business name (ie: Jethro's Mad Cow Design), then you'll probalyt have to file that with the city/county and take out a public announcement add in a local paper declaring the fictitious name (the county/city clerk's office will have all of this info). Oh and remember, once you file any business stuff with the county, the assessor will have their way with you so keep a good hand on what could be deemed "Business Property".

There are a ton of good books on this, some at decent prices. I suggest you ramble on over to the library and check a few out.

[funkytuba]

I've considered becoming a consultant for database stuff. The main challenge I see in being any kind of independent entity is that when/if you get dropped from your current gig, you're instantly turned into a salesperson for your own skills.

Unless you've already got a reputation or a following in your particular industry, or a friend/agency who can feed you leads, you run the risk of having to pound the pavement developing your own pipeline of jobs. That can easily turn into a full-time job by itself.

Log all your expenses and payments on a spreadsheet with check numbers, account numbers, dates, invoice numbers, etc. This will come in handy for your certified public accountant. Develop some kind of filing system/job numbering system for your work and track it in a database which uses the same filing system. Use a macro to re-sort the database every time it is updated.

Negotiate a payment schedule that is agreeable to both parties and fair to you. Make it crystal clear what these people expect of you and whether or not it is realistic. Be skeptical of work that sounds too easy.

Charge for changes made in the course of the project and make your client/boss proof and sign off that the work you did is okay to be finalized (printed, whatever).

Save corrections and file them. Be a neat freak. You will probably have to pull those corrections up again. Likewise, save your work at critical points in case you have to revert.

Congratulations and good luck, Surf man.

[dinzdale]

Make sure you get up early and catch the first commuters at the busiest intersection you can find. They will be sleepy and not in such a rush, and could even on occaision mistake a $5 for a $1.
Later on, your cardboard sign should reflect a novel approach, dont be vague - "Will Work for Food" doesnt convey your skills to their best. Be original, and always see if you can get a sad looking puppy (they're free at the pound) - people dont equate a healthy dog with your rags and can see how you must lavish your meagre existence on the poor doggie. Try to limp.

Oh, and make sure you add "God Bless" on the end, it makes me want to give more every time.

[Magpie]

Used to be a guy here in Denver, would stand at a major intersection with a sign that said, "Will work for sex." *AND* it said "God Bless" on the bottom too ha!

[dinzdale]

[Magpie]

Ohhhhh! That was you?!

[surflugen]

Thank you all for the advise. I know every thing will work out fine and that it is time for me to grow up a be a real Graphic Designer. Not only will this job give me the stuff I need in my portfolio but will give me a taste of what it will be like to work on my own. I understand your concerns and have dealt working as an independent contractor before. If all this turns out bad for me, I can always fall back on the temp agency work I did before. They still call me all the time so I know there are jobs for me to fall into. As for the money on this job, They are making it worth my while. Besides that, it was really time for me to leave as I was getting nothing out of my current job that would make me marketable as a designer.

[surflugen]

First project I will get to ad to my portfolio is a Graphic Designer gold mine.

The Honda catalog.

[catbelly]

Yow!! Surf that is so great ...

When Coffee gets back I'm sure he will have some stories for you, I won't go into details on his behalf but I think he did have some negative stuff happen along with the positives.

[TinaBina]

Surflugen, I am a graphic designer too.

I have interviewed and been involved with hiring freelance designers. The particular firm where I work as an art director (currently I am on maternity leave), hires freelancers when the workload gets really busy. Typically if there is no work and we are not busy, then we can't keep them on (it's not a charity), but the work does tend to come on quickly and we call freelancers in on short notice. (we have a pool from which we select the appropriate person, or who is available). That's pretty typical of the field. You know that sometimes it can be feast or famine, and that's just something you accept when going out on your own as a freelancer in this business. It's more work to get the work than to do the work, sometimes.

I've also worked as a freelancer, (initially for a brief time for this same company and then got hired perm), but also for myself for a few projects here and there (but not for another design firm).

Definitely put aside 30-35% of your pay towards taxes.
Always save records of everything...receipts, approvals, etc.
You may want to incorporate, that way your personal assets are separate from your business.

If you are not a member of AIGA or GAG, check into it. Also try out www.yayhooray.com - search their archives for keywords that you are interested in...here are lots of people there like yourself looking for advice.

Also, How do you figure out if you are a contractor or employee? (from http://www.searchconsultants.com/article/empcont.html but you can search and find this in many other places too)

Good luck with it!