On January 1, 2015, I started recording the time I spend on freelance-practice business functions that don’t fall under a specific project’s billing code. How big will my “invoice” be come next New Year’s Eve?
Like many freelancers, I started my 2015 with a healthy list of business-related tasks to keep my 2014 freelance momentum rolling: printing out new calendars, setting income and client goals, starting my taxes, even registering for a conference. I even got an invoice out the door. No rest for the wicked.
As I hit SEND on my first bill of the year, it occurred to me how much work I’d done that day that didn’t have a billing code for a specific client or project. I estimated I’d spent about 2½ hours on my business in general that morning. This was an investment in my practice, but its return wouldn’t be as immediately or financially tangible as that of my invoice. For the moment, it was more of an expense: my time in exchange for work, but work that didn’t have a deadline, go to a client, or show up in the form of a spiffy published book with (ideally!) my name among the credits.
Freelancers are urged to set their fees high enough to pay for business and personal expenses, fund their retirement, and provide a bit of profit. Yet when seen as unpaid work, this intangible business development and maintenance I was doing was no less of an expense than a year’s worth of web hosting or a decent office chair that wouldn’t have me crab-walking to a chiropractor. By that logic, if I wasn’t tracking the time these functions took, and setting my rates high enough to cover the hours, I was shortchanging myself.
So I decided—quite possibly long after my wiser freelance colleagues have started doing so—to track this time as I do with my projects. I’ve been pouring my project start and stop times into Excel since I started freelancing, even programming a cell in the trackers for flat-fee projects to see when I was nearing my threshold of profitability (basically, fee / hours spent = OMG) for that job.
Here are some of the things I can add to my new tracker. Each either supports my business/professional development, or is a direct consequence of being the Chief Doer of Things for this operation:
- Health insurance payment, forms, and research
- Purchasing office/business supplies or services
- Taxes: organizing receipts, recording expenses, sending quarterly payments, and assembling my package for the accountant (or finding a new accountant if I ever need to)
- Hunting for new work
- Publicizing my work
- Updating my résumé and online directory profiles
- Computer and software research, purchasing, installation, and maintenance
- Registering for and attending conventions, conferences, and classes
- Reading industry periodicals and discussion lists
- Twitter chats with colleagues
- Retirement planning
- Blog posts!
Note how many of these functions would be the province of a full-time employer. I’ve had some individual clients balk at my project estimates, but I’ll wager most of them—and even some institutional clients—don’t realize that if I were an office worker, I’d have a range of support staff and colleagues, whom I wouldn’t have to pay, or actually be, to do a lot of these jobs, or at least make them easier (e.g., an HR department contracting for and presenting a range of insurance plans, IT folks with fire extinguishers to put my burning computer out—that’s a whole other story).
Anytime I have to do one of these tasks, I have to stop copyediting, proofreading, or writing—tasks that do have a direct financial return—and the faucet stops. If I’m not charging clients enough to cover that unbilled time, then I’m covering it—and then the faucet leaks.
The good news is that with several lovely clients in my circle, each one only has to contribute a little to the “housekeeping fund” for those hours to be reimbursed. I’ll need to factor this into the raise requests I send out in the next couple of weeks—requests that I’ll time, note on my Excel sheet, and review at the end of the year to ensure that in 2016, I’m covering the phantom billing code that can weigh heavily on a thriving freelance business.