Beware Ideal Deals

I've been around a fair amount, so when I had a client talking about a retainer agreement early last month, I took it with a grain of salt. Now the client is late on a large payment for work I had already done. While I expect to get my money one way or another, it was a reminder not to buy into someone else's hype. There are many companies and people who will talk of their plans and what they want to accomplish. Far fewer actually make good on their words.

When people start setting the picture of how well you're going to do by them, it's almost a guaranteed red flag that you won't. Instead, that plan will get put off, then modified. When it goes to the farthest extreme, you're asked to do some free work for now to show your commitment, or to hang on while the funding comes in. At that point you should head out the door instead.

The best way to avoid such a lure is to remember the following points:

• Good clients want to check you out as much as you want to check them out. Anyone who is ready for a commitment at day one is someone who takes such an arrangement lightly and who is then likely to find it easy to break the commitment, whether now or later.


• A client or prospect can't push you any farther than you allow. Keep your business plan and strategy in mind. If you're adverse to letting a client become more than 20 percent of your income, then reject out of hand suggestions that you devote far more time to the client who walks in a dream.


• When you hear big plans, suggest phasing things in with a trial project and then maybe a second, larger one (should things get to that point). You'll get a chance to see what the client is like to work with and whether pay comes in a reasonable amount of time. Better burnt on something small than something large.

Shifting with the Economy

As life looks continuingly uncertain on the macro economic front, it's important to take a close look at your business and make the shifts that can help minimize the impact.

• Sell globally, write locally I've mentioned in the past how a weak dollar can mean improved overseas markets. The dollar has strengthened some, but that doesn't mean it's time to look only at domestic work. Yes, there is turmoil the world over, but it's particualrly intense at the moment in the US. So consider how you might diversify your business portfolio. As a personal example, I'm now working on a custom publishing project for a large Indian company. The project may run through a US firm, but the source of cash is a well financed client overseas, which helps spread risk from various geographic economic weaknesses. It's no guarantee of safety, but does help reduce the issue of having all my eggs in one basket.


• Don't Do Panicked Price Drops I know some writers are getting the "we'll no longer need your services" communications. But I think it's a mistake to react by immediately lowering prices. Now, to be fair, it may be that you might get pressure to drop prices. However, if you're dealing with relativelyh strong clients, they're doing that as a negotiating tactic. Particularly if you're doing corporate work (and a lot of editorial is essential that, as you're writing for big comapnies), the amount you get as a writer is really pretty insignificant in terms of overall budgets. That doesn't mean you can simply demand what you've always gotten. Instead, you have to show the benefit you offer them. Some clients may bottom fish for price, and they tend not to be valuable clients in the long run. Those that appreciate value are more likely to continue paying reasonable amounts to those who can deliver.


• Spend Money to Make Even More When things seem tight, you don't want to spend money. I can appreciate that. Heck, I don't like spending money if I can avoid it anyway. However, as the old saw goes, you can be penny wise and pound foolish. Recently we finally got broadband into the rural area where I live and work. I could have put off the additional amount a month, but it would have made no sense. For the $30 or so I spend a month, I'll be saving hours a week. Save say three hours a week and you have 12 hours at the end of the month, enough to fit in at least a short that would pay hundreds. If you write a 300 word piece even at $1 a word, that's a 900 percent return on your investment (figuring that the additional revenue over the cost is $270). Not a return to sneeze at.


• Drop Duds Now is not when to sink time into clients that sink your business. Go out and find replacements, which will probably increase your revenue and decrease your irritation.


• Market a Lot This should be pretty predictable. You always have to market. But you're at an odd advantage here. When thigns get tight, many businesses, including writing businesses, pull back on marketing activities because they don't want to incur the expenses. That means you've suddenly got less competition. So go to the trade show or attend the seminar where you might meet potential clients, because you're stand out if, for no other reason, by being one of the few writers there.


• Be Ready to Build If things do slow down, you'll find yourself with more time on your hands. So invest the time. Try creating a new specialty that you've been unable to establish before because you were too busy. Pick up some knowledge in an up and coming technology that will affect writers, such as HTML coding or video. Then when companies are ready to invest more, you're in a better position to get the work.

Don't Ignore Monthly Goals, Either

Earlier this week I discussed how you can put too much emphasis on monthly goals, wasting time and effort chasing something unnecessarily. But there is a flip side: complacency. Yes, it is possible to make up a month's revenue short-falling, but the possibility shifts with the circumstances.

Pushing additional revenue needs into a following month is fine if the amount is small. But the larger a deficit you try to cover, the more difficult your task becomes. Now you've committed yourself to longer hours and more work just to get back on track. The key is percentage by which you misss your goal. If you're down by a few percent, that probably isn't going to be impossibly difficult to attain. Hit 15 or 20 percent, and you're working some longer weeks; 50 percent, and you might be giving up sleep.

You might need to spread a large enough deficit over several months, but what happens if you have another off month? Or if you're crowding the end of the year and you want to hit your annual goal? You may have set yourself up to solve a problem that you cannot.

If you find yourself missing a monthly goal, don't panic, but do see what you can learn from it:

• Have you fallen short because of an unexpected event? Consider whether it really was a something that you could not have forseen, or if you might be essentially lying to yourself through overly optimistic estimations of the likelihood of closing business.


• Does your goal show unrealistic expectations for the markets and types of work that you've chosen to do? If so, you must revisit either your business model or your expectations.


• Are you working hard enough in marketing and selling? If not, the work won't come in. You should be pitching to get more business than you need, because not all of your marketing will turn into assignments.


• Are you working hard enough to finish the assignments? It doesn't matter if you've got an assignment; it won't help you meet a monthly goal if you don't finish in time to invoice during that month.


• In a similar vein, are you being realistic in the amount of work you can complete in a month, and how long it will take to do each assignment? If you find that important parts of your goal are going to be done right at the end of the month, assume that the schedule could slip and your revenue could slide out of one month and into another. That's not a big problem (assuming that the client is fine with the change) if you're finished at the beginning of the next month, but let it go too far and you'll be bumping revenue for that month as well, creating a situation where you cannot catch up by earning more than your goal.

When Not to Focus on Monthly Goals

I'm a big advocate for monthly goals, but they can cause one big problem. It's easy to focus so much on what you're supposed to make in January - going through a panicked rush in the last week when you find yourself a bit short - that you forget there's more to a year of revenue than any one period. To focus too much on what you make any given month can cause you to waste time and lose your grasp on the big picture.

Ultimately, the important thing is what you average over a quarter and, then, the year, and not every single month taken absolutely on its own. One reason is that it's difficult to turn around a significant amount that drops out of a month, as by the time you make the sale and start work, generally you will find your deadline into at least the next month. And if the amount is small, it's probably not worth diverting your attention from where your business is going overall.

If you do find yourself short, consider whether you would better take your time and work on getting assignments for larger amounts. Could you split up that shortfall and make it up over the next two or three months?

Be more flexible in your planning. Look at what you are doing per month, certainly, but also per quarter. I know some writers who combine quarterly and daily views, to make sure they're on track in the short and long terms. Personally, daily can be too widely variable for me, but if it fits your business model, then by all means use that approach as well. Whatever you do, though, remember that planning and goals are there to help you run your business and keep on track, not to run you.

It Can Happen To You

I recently had a book project get canceled in the middle. Although I had proposed the basic idea, the publisher wanted something near to it but different (like the difference between Manhattan and Trenton - at least they're both in the Northeast). The head of this imprint had decided to fit the book in with a new concept she tried in another book. And then the initial sales results came in: that book did terribly and she decided to can this project, assuming that it would have as many fiscal problems.

There was a clause in my contract that let the company cancel the contract should it decide that the book wouldn't sell in advance of its actually coming out and selling, and my legal remedies were limited to getting the parts of the advance that had come due. And I singed it, because the chance of losing the project was low, and even if it occurred, the advanced owed me would reasonably cover the blow. And, to be fair, my editor let me know, but said that I wouldn't be asked to pay anything back. I now have to look around for some replacement work, but it's only inconvenient, not a disaster.

I went into this with my eyes open, and only agreed because I had inherently limited any damages. That's because I've been around the block enough in life to know that any given unexpected event may be unlikely, but when you add all the things that can go wrong, chances are that something will. Many writers go into projects holding their noses at some unpleasant clause in a contract, but tell themselves that the situation can't happen. But of course it can. Look at all the news you've heard about the sub prime credit meltdown. Sophisticated and highly-paid managers at prestigious financial institutions told themselves that they were getting their organizations into easy money. After all, what could go wrong? Oops.

If you see a clause in a contract that makes you uncomfortable, be realistic about how safe you might be. If you're writing an essay about how you did something foolish and embarrassed yourself and don't mention anyone or anything else, then, sure, you aren't going to have a problem with libel. But if you tell yourself that you're only writing a small article and that who would take offense at something you said, then you are out of making a realistic analysis and into the realm of rationalization. You've crossed the line and aren't thinking, but coming up with ways to excuse your behavior to yourself.

You can't eliminate all risk from doing business. Risk is an inherent part of business, because it is the risk that also offers the opportunity. But do avoid foolish risks, and make sure that for the ones you take, you've got enough protection to keep yourself from taking an unexpected bath.

What's the Payoff?

One of the most difficult things to address in any business, including writing, is the value of speculative ventures. I've seen attitudes among writers go from the free pass ("It gives me good exposure," even if someone doesn't check metrics and can't track work to the blog) to the determinedly skeptical ("When will it turn into high paying work?"). Being on the extremes is often a bad idea because your view is like looking at something with one eye closed: there's no depth of field and no perspective.

The problem with the enthusiastic view is that you won't determine if the venture does offer your business anything. As I've mentioned, exposure for its own sake does nothing. It only makes sense as part of a planned business if your potential clients (whether a corporation or an editor or someone who might be part of your audience) see it and if the exposure helps to positively market your work. If the venture is simply low paying, then you must decide if there is really something of value, or if you are wasting time that might be better spent elsewhere.

Now that we've spent some time I've worn the glasses of the pessimists, let's look at the other view. It's great if you can predict that a venture will turn into a significant revenue stream, or lead to better paying work, but sometimes there is no way to know in advance. At best, you may only be able to use the clips as examples of your work and/or expertise in a given area, which might lead to better assignments, or the connections you make in covering an area may pay off in other venues. There is also the question of whether you just want to write about a given area for your own pleasure and don't care about payment.

So, when it comes to speculative ventures, I'd suggest the following approach:

1. Determine if the subject and format are ones that you would enjoy doing anyway. If the answer is truly yes, and not an affirmative that is really rationalization, then you have some benefit no matter how the money comes out.


2. Take a look at the venture and determine what skills and knowledge areas you might gain, and then do research to see if there might be some advantage to them. For example, learning to use a blogging system in a mechanical way isn't of that much value. But if you pick up how to embed online references, control such aspects of formatting as italics or bold, and learn how to set up tables and embed images, then you have skills that will make doing online work easier, and possibly increase your marketability with clients.


3. Consider the market for this type of work. Are the rates reasonable? Or are you effectively learning to use a word processor to become the high tech equivalent of a typist? If there is the opportunity to make significant money, then you might have a solid financial reason to start. However, realize that most new undertakings don't succeed. You need a realistic estimate of the chance that the venture will thrive and deliver what you anticipate. That means don't throw yourself completely into it unless you have the resources to carry you and your business in the meantime.


4. If the venture is a new business that you will own - maybe publishing your own blog or specialty web site - then ask if you've factored in the need for marketing the venture as its own entity. You might make money or you might not, but you certainly won't if you aren't promoting the venture to its potential audience. That will require time and could even demand monetary investment. That becomes a counter balance to what you might gain from it.


5. Finally you get to the question of the promotional value to you of the venture. This is not an area for feel-good guessing. You must be able to pinpoint what prospects will see it and potentially contact you to do work.

For a venture to make sense, I think it's smart to have more than one factor going for it. Look at each factor skeptically, but recognize that multiple benefits increase the chance of "success," at least as defined as being of more benefit to you than the time and energy you put into the venture.

Danger of Hourly Rates

I'm a big fan of smartly using hourly rates. You must know how much you need to make per hour, and viewing assignments in the light of your hourly minimums can be a good analysis of whether they are economically worth your time.

However, when it comes to financial business planning, looking only at hourly income can be limiting. Many writers grossly under estimate and misattribute the time they spend on assignments. You can't count just the writing. Time includes all the research. Maybe you did some interviews before and you think you can easily spin off another version of a story. The hourly rate on the new version may only seem good because you're pretending that there wasn't time and, so, cost associated with it. Those interviews took time to land, set up, and conduct. To not count that time is to literally subsidize the cost of producing the assignment out of your own pocket.

Another problem with looking only at hourly rates is that you forget that you're interested in making a certain amount of money each month. (You have done your basic financial planning, haven't you?) But if each of the assignments is relatively small, you'll need more volume to reach the income you need. For example, you might argue that 25 cent a word assignments are acceptable because you can do them quickly, making the hourly amount attractive. Yet, if you have to write 6K words at $1 per word to meet your monthly goal, you'd have to churn out 24K words at 25 cents a word - and that's a significant amount of work to nail down and complete in 30 days.

I've found that to do a good job of a given type of article at a certain length takes about the same amount of time, no matter what the pay level is. You could cut corners, but that affects the quality of what you do, which, in turn, affects the chance of your getting into better paying markets, because now your clips won't support what those markets want. Overall, the most efficient way to make more money is to get paid more per assignment, not to add on more assignments.

Passing on (Most) Low Paying Assignments

Writers often debate whether low paying assignments ever make sense. When you sort through the arguments made for possibly taking a low paying assignment, they usually fall into the following camps:

• good exposure for future work


• Foot in the door with a client


• Still offers acceptable hourly rate


• Chance to place a story you can't place elsewhere


• Creative opportunity you can't get elsewhere


• Chance to do a type of work you haven't before


• Chance to plug a book or other project


• Perks make it worthwhile


• Need the clip to break into a higher paying market


• Nothing else you could do with some writing


• It's good exposure


• Can use as paid research for other stories


• Money comes quickly and at a good time


• It will make me an expert on the topic

There is some potential value in any of theses reasons - on rare occasions. But before jumping into a low paying assignment, consider whether you are talking yourself into a bad idea. I've seen a lot of writers given reasons from here to Sunday and back why low-paying pubs made sense. But sometimes this is simply rationalization from people who are afraid to go after larger markets. So be sure to take a big dose of self-honesty and of realism to see if your reasoning really does hold up. Here are some questions to ask:

• Foot in the door with a client What are the chances that you'll actually be able to move up to better assignments from the client? Or will you be seen as a certain type of writer not suited to the quality needed for more lucrative work?


• Still offers acceptable hourly rate Will this distract you from better paying work that you need to meet your monthly goals?


• Chance to place a story you can't place elsewhere How important is it to write this particular story? Can this publication really offer the impact that you tell yourself you want?


• Creative opportunity you can't get elsewhere Will you be able to invest the time necessary to do a good job? Are you diverting your creative energies from more realistic projects?


• Chance to do a type of work you haven't before Are you getting diverted from the work you should be doing? Are you building a skill or knowledge area that actually will serve your business?


• Chance to plug a book or other project Are the readers the potential audience for this other project?


• Perks make it worthwhile If you did higher paying work, could you afford to pay for the perks yourself?


• Need the clip to break into a higher paying market Are there intermediate markets that might pay better and provide a more recognized clip?


• Nothing else you could do with some writing Might there be a better market worth waiting for? Are you spending time writing things that have little financial value?


• It's good exposure Will your potential clients actually see this writing?


• Can use as paid research for other stories How likely is it that you will sell other, better-paying stories on this topic? If there is a market, why not start with better paying publications?


• Money comes quickly and at a good time Are you getting distracted for the real issues of whether your overall client mix and financial processes are good?


• It will make me an expert on the topic Will you gain large amounts of specialized knowledge from writing one or two articles? How many clips do you need to write about the subject in higher-paying publications? (Hint on the last one - you shoudln't need more than two or three.)

I'm not suggesting that lower paying assignments never make sense. Just be skeptical when you're listening to a sales pitch - whether it's coming from someone else, or from inside your own head.

Tallying Your Yearly Financial Results, Part IV

Once you've completed your end of year review, it's time to look foward. As you look at what has worked and what hasn't, you want to consider what you need to change for next year:

• Do you need different clients?



• Should you consider more aggressive pricing?



• Would more efficient business processes help you make your goals more easily?



• Have you been too easy when planning annual goals?

Don't let the review be something that makes you feel good or bad. Make it useful and let it guide you to better business next year.

Tallying Your Yearly Financial Results, Part III

Once you've considered income and expenses, you can consider profit. This can be a tricky area. Although from one view your profit is revenue minus expenses, that's not entirely true. Ideally, a business creates a profit over and above the regular income requirements of its owner. If you've made at least your bottom line goals that cover all business, personal, and tax expenses, then congratulations - you can consider yourself in the realm of business profit. Anything above that is gravy that the business brings in. Consider keeping at least some of this out as working capital so that, if clients are late, you can float your needs without trouble.

Another area of profitability is the per client view. You should review how long it takes to do assignments overall and then on the average for each individual client, and multiple the revenue for those assignments by the time it took to do them. That will let you know what you actually make per hour, and not what you think you make per hour. Then, as part of your end of year planning, you can review how your clients stack up and see which ones might be worth replacing with ones that either are more profitable or that offer a chance for personal or professional expansion that might offset a lower than optimum level of profitability.

Tomorrow, looking forward.

Tallying Your Yearly Financial Results, Part II

Yesterday we talked about revenue. Now it's time to bring in expenses. You may have created a budget for the year - and certainly you should have done so if your financial goals were to have any meaning. If not, you're simply making up numbers, and the could as easily be wrong and misleading as they could be right.

Now it's time to take those numbers and see how they added up. You aren't just interested in the grand total, but how your individual categories came out. Say that your cost of food was significantly higher than you had expected. Overall, you could still get things to work out by cutting back in other areas. But if you take away from a non-discretionary area - like retirement savings - then you might be taking a problem and making it appear to go away, but actually causing it to ultimately be worse, though at a later time.

If, in general, you find yourself under-estimating expenses, then you're actually under-estimating the amount of revenue you need, throwing off your markenig and sales planning. I think writers are best off treating expenses on an accrual basis - that is, treat them as though you have to pull the money out when the expense comes in, and not at a later time if you can delay payment. It's a bit more pessimistic than looking at them only when you pay, because that can provide some breathing room. But in planning, you're not interested in being comfortable. Instead, you want to be more conservative and know that you can cover what you need, not depending on the ability to procrastinate.

Tomorrow, some words on profit, and profitability.

Tallying Your Yearly Financial Results, Part I

There have been some online discussions about reviewing your results versus your annual goals. I think it's important to take periodic stock of your goals and progress during the year, and I keep a monthly eye on both assignments and cash coming in. But if you're doing an annual look, you might keep the following things in mind. On the revenue side, there are actually three basic numbers you can consider:

1. the value of the assignments you receive during the year
   
2. the amount of money that publishers become obligated to pay you because of assignments you turn in


3. the amount you actually get in cash from payments

The first number gives you an idea of how well you are selling - the total response to your marketing. The second lets you know how much revenue you actually generate and are owed, and so whether your attempt to make money is doing well. The third says how much cash came in, which generally controls how easily you can meet your financial obligations.

Success on one area isn't enough - you really need success in all three. For example, you might be pleased because you have enough work booked, but if some of that came from a continuing contract, or was carried over from the previous year, then you have to see whether you are, indeed, selling effectively. Maybe you didn't care if you could have made any more, maybe you were maxed out for your work days, or maybe your sales efforts weren't as effective as they should have been.

Another analysis is whether you are completing enough assignments, and so, technically, earning enough money. It doesn't matter whether you've sold enough; your revenue is only what you could actually do and bill. That lets you know whether you are working efficiently enough and/or making enough per assignments. If it takes too many assignments to meet your goals, something is wrong and you need to consider how to change that so you can hit your revenue target in the time you have available.

A third, important, analysis is the third point: cash flow. It doesn't matter how much you book if you don't bring in enough cash to pay all your obligations. It's easy to whitewash this number by looking at the work completed, or even booked but not completed. However, don't get distracted. If you calculate that you need to bring in $50,000 for what you need for the year, it doesn't matter if you technically make $50,000, but only get paid for $40,000. That leaves you $10,000 in the hole, and is an example of why you generally need to complete more work than your economic goals, because you want enough cash to come in when you need it, and not afterward.

Tomorrow, I'll look at expenses and profitability.

Letting Go of Failure

Every time I run my online planning course, I find at least some participants who get frustrated because they look at where they want their business to be financially and don't see how they can get there from the type of work they currently do. For example, a writer might calculate how many more corporate or editorial assignments they need to add a month and then go into shock over the quantity.


The problem they face is one that many writers have: They don't let go of failure. If you want to progress in anything, whether a skill, an endeavor, or even taking a hike, you have to move in one way or another from where you are to your destination. You cannot stay fast and make any progress. And yet, many of us do exactly that, whether in business, relationships, habits, or even in our aspirations and dreams.


The refrain is something of the frm, "But I can't do that because of this, that, and the other," when said this, that, and other are of your choice and control, and not externally imposed. If you want to make more money in magazine and newspaper writing and you've been writing for publications that pay 25 to 50 cents a word - or less - the answer is clear. You have to start writing for places that pay more and, as you get new clients, stop working for cheapskates.


But the moment you try doing this, you may notice thoughts like, "But I love that editor," or, "It's so easy to get assignments." Brick by brick, you're using your own thoughts and attitudes to build the wall that will encase you where you are. The only solution is to stop defending your previous decisions. You have the right to make a different choice, and you can start doing it today. It will take time to pull away from the old and become established in the new, but it can and will happen - when you stop clutching the bricks in your hands and begin walking in a new direction.

Why You Need to Plan Your Business Today

In the middle of teaching one of my periodic online business planning classes, I've had some students saying that they're getting behind because they're too busy now. You may have said the same thing yourself - I'll start my business planning next week, or at the end of the year, and then you never get around to it. But planning isn't an affordable nicety.

I don't mean writing a formal business plan to shove into the drawer. Planning is the process of knowing where you need to go, where you are now, and how to get from point A to point B. It's a process, not a single activity, so there is no perfect answer. You might make some decisions only to find that they put you in a direction away from where you want to go. That's fine, so long as you keep looking at your client mix, the money you're making, the money you need to make, your pipeline of possibly work, level of marketing activity, cash flow, and other metrics critical to the running of any business. If you want to write for a living, then whether you like it or not, you have to treat this as a business.

Would you say you're too busy to send letters of introduction to prospects or queries to editors or proposals to corporate clients? You might, but you'd soon be in desperate financial straits, because only continued marketing keeps you solvent. Would you say you're too busy to send invoices? In that case, you could find yourself out of money, if not assignments, because you haven't kept up with what others owe you.

A process of business planning is just as important to your business as marketing and invoicing. The point isn't to come up with "the" answers. Instead, it's to start building a planning process, so you can move ahead over time. So, for example, if you can't analyze the profitability of all your clients, analyze that of the top few, to start. If you can't go through your entire old client list, at least examine a promising few.

Delaying planning to some future time offers no benefit, because you're still thinking in terms of a light switch: Today I'll plan and then everything will suddenly be OK. It won't, though. Only by continuously planning over time can you eventually make progress toward your goals. It's like hiking toward a mountain. You keep checking your progress, examining your direction, and noting the terrain and how you may have to adjust your gait to meet it. Eventually you get to the mountain, and every step brings you closer. If you wait to do the planning until you're there, you could end up tumbling down a ravine.

Short or Long - Investing in the Periodical Market

Short and long are stock market investment terms, but they also describe a different type of investment for a writer: time. If you work in the periodical area, you can take on short work - front of book (FOB), charts, and other pieces that are often in the 150 to 500 word range - or longer work like features or department pieces that could run 750 to 3,000 or more words.

Most writers understand that getting a check for $1,200 to $3,000 or even a lot more is nice. But shorts are worth far less, so are they worth the investment in your time? It actually depends on two factors. One is the hourly rate. Remember that you need to calculate how much you must make an hour to keep yourself in business. (See the business planning article in the writer resources area of this blog.) A short that runs, say, 500 words, that pays $1/word, and that you can finish in three hours, comes out to almost $167 dollars an hour.

That is a nice rate, but you have to really watch your time. Add up all the time - all interviews, all writing of all drafts, answering questions from the editor, and so on. When I hear writers estimate the time it takes to do something, I know that most significantly underestimate the time they actually spent, because people do in general. When I run my business planning class and have people closely monitor where their time goes, they are almost always shocked, if they've never checked it before.

But say that you are accurately monitoring your time. Why not then do a lot of shorts to make your income? Because there's another consideration - the time for marketing, billing, and overhead. If you make $500 for a short, then four of them pay as much as one 2000 word article paying $1/word. The amount of writing time might even be comparable. However, figure that a 500 word piece really needs two to three sources to come across as sold. You're now booking 8 to 12 interviews, versus the 6 or 7 that might be all you need for the longer piece. That means more time interviewing and scheduling your time.

You're also going to spend about as much time writing a query for a short as you would for a longer piece, plus you have to generate the ideas and pitch editors. So your marketing and sales time has just quadrupled. If you make a lot of your income from shorts, then you're probably spending many more of your hours marketing, interviewing, managing your time, and billing (and collecting). Now you see the real drawback - not the hourly rate, but the time you must invest to do enough shorts to make a living.

I'm not knocking shorts, and still do them sometimes myself if I think it makes sense. However, recognize that your time is valuable - because once its gone, you can't get it back. Maybe you could use a few more hours of sleep, or exercise, or reading, playing with the kids, writing a novel or play - you get the idea. Don't base your business planning only on hourly rates. Keep in mind the overhead and support you need to provide per piece and factor in how long a week you need to sustain the income you want.

Writers' Business Planning Course

I'm thinking of teaching another business planning for writers online course. It would run from late Sept./early Oct. to the middle of Nov., ending before Thanksgiving. Here's the info, and if you're interested, please click on my profile and drop an email.

Learn how business planning can help you take control, get more done, make more money, have more fun, and generally see things take off.

This isn't some dry, head-pounding, hair-tearing forced march to a written business plan, but practical techniques that can help you make the big decisions and then put them into practice. Calculate just how much money you actually need, and explore what is important to you and how that can connect to your business. Rank your clients and assignments to see how they fit with your goals, and use simple analysis to anticipate assignment and pay crunches while you can still do something about it. The course ends with some time-management techniques that will help you keep on top of what you want to achieve.

Here's what some people who have taken the class in the past have said:

• "I really got a lot out of this class. It forced me to make some decisions that are actually getting me to move ahead, and that is very good news."


• "I just wanted to let you know how much I learned from the biz planning class ... What was most beneficial to me was developing formulas to track, on an ongoing basis, which clients/types of work represent the majority of my income."


• The frame of reference you've provided is quite useful, and I feel I've already gotten my money's worth."

The class runs six weeks and is meant for people who already have some experience in freelance writing.

Planning Class Syllabus:

• The need to plan


• Self examination to set the direction


• A layered approach to planning


• Using results to improve planning


• Baseline financial analysis


• Establishing bare bones and and full budgets


• Performing a time utilization analysis


• Determining client and assignment mixes


• Identifying personal inertia points


• Taking personal work inventories


• Evaluating past and current clients


• Calculating minimum rates


• Building a foundational financial plan


• Identifying areas for expansion


• Balancing work/client categories for plan optimization


• Taking stock of planning efforts so far


• Creating a planning feedback loop


• Cash flow analysis


• Discounting expectations and assignment values


• Other metrics


• Time management


• Developing time-based plan implementation


• Juggling tasks

Writer Rationalization

As human beings, we often try to make ourselves feel better about our choices - a process called rationalization. It's not an occasional activity, but constant. Virtually every time you buy something, you make an emotional decision and then come up with rational-sounding reasons for having chosen what you did, because we all like feeling as though we are in control. When we rationalize, we really make excuses so we don't have to face how we really act. Aesop's fable about the fox that couldn't reach the grapes and so decided they were probably sour anyway (source of the term "sour grapes") is a perfect example. And when we rationalize, we lock ourselves into behavior and decisions. That's fine if the choice is healthy, but dangerous when it's not.

If this happens constantly, you might expect that it also rears its head in business, and you'd be right. Writers often rationalize, for themselves and for colleagues, why the low pay they take is acceptable, or why they had to accept the punitive contract terms, or put up with poor treatment by a client.

There are times that a business decision makes sense, and other times that a choice is poor, and you don't want to face it more directly. For example, maybe the 50 cent a word assignment really is so easy that you effectively make $60/hour. But you need to look a bit deeper. Is $60/hour really that good for the work you are doing? Billable time for an independent practitioner often goes far higher on projects, and if you ever wanted to gross six figures, you'll need to be billing more like $75-$100/hour, depending on how many projects you can actually sell and complete. And your calculation presumes that you're accurate about the time you actually do spend, and people often grossly underestimate the figure.

But consider the possibility that the business analysis might also be an excuse to not break into better paying markets or to find more upscale clients. The contract terms might not be something that actually concern you, or you might be saying that because you're scared to try negotiating something better. Perhaps you are an XYZ-type of writer, or you could be scared of branching out into a new area and prefer the comfort of what you've always done. Maybe that editor really is that good to work for, so you take a lower rate, or it could be that you're focusing overly on wanting to be liked and that distracts your attention from improving your business.

No one else can give you the answers to such questions. It could be that in a cold business analysis, your reasoning is sound. Only be sure that you at least ask, and that you scrutinize your own answer. We are creatures who often lie, to ourselves more than to anyone else. And there's one person who gets hurt when we do.

The Dangers of Big Projects

At some point in your writing, you'll get involved with a project that seems great - a large sum of money (think five or six figures), work guaranteed for a period of time, and all looking right with the world. But the big-ticket job can, in its own way, be as dangerous as the assignments that pay too little:

• No client should be too important. You don't want any one client to provide too much of your income; losing it can become a devastating financial blow. That's what can happen with a big ticket project, particularly if it's out of scale with the rest of your work. If something like this does seem likely to happen, then consider pushing to expand the rest of your business to keep it in balance. After all, few clients offer such projects on a regular basis, and you don't want to become used to nice money only to see it dry up.


• Emphasize the client, not the project. Real success comes from relationships. A big project may seem a delight, but keep it in perspective. Big projects just don't happen as often as smaller ones and so are harder to find. Clients that provide significant revenue over smaller projects year after year are always worth more.


• Keep projects in their places. When you have the chance of a big project, there's always that temptation to do nothing else. But that has its price. If a five figure project keeps you from maintaining ties with important long-term, high-value clients or from ongoing marketing, it disrupts your work flow after it's over. And then, 30 to 60 days after it's over, you'll take a hit to your cash flow because you didn't keep your business pipeline filled. Always have projects and customers fit your business model. See if you can negotiate and schedule the work to be part-time over some number of months. In any case, always keep marketing so that when the project is done, you aren't done for.


• Clients cancel. Many contracts have termination clauses, which means there's always a possibility that the project will suddenly end. Even if there isn't a provision, if someone stops paying, you can go to court, but it can take a long time to get satisfaction. Manage your risk so it's at a level you can tolerate.

I'm not suggesting that writers shouldn't take large projects by any means. Just use some caution and common sense so that the offer that seems to be too good to be real doesn't turn out that way.