An American Editor

March 7, 2018

On the Basics: Managing Your Freelance Business to Head off Financial Crises

Filed under: Contributor Article,Editorial Matters,On the Basics — Rich Adin @ 9:51 am

Ruth E. Thaler-Carter

In a similar vein to my recent post about networking etiquette (On the Basics: Making the Best Use of Interaction with Colleagues), someone in a Facebook group recently asked for help in finding projects that would generate $250 “by Saturday.” That kind of plea might not violate the rules of good manners or effective networking, but it can damage an editorial freelancer’s image and reputation just as much as bogarting into a community of colleagues with a demand for their contacts and referrals before establishing credibility and connection with that group.

Money Matters

Most of us have had financial issues at some point in our freelance editorial lives — I certainly have. It can be quite frightening to need funds urgently, and asking for work leads is better than asking people you don’t know for money, but finding a new client and project that will generate a substantial fee in less than a week is unlikely. Some do pay almost as soon as they receive an invoice (usually via PayPal), but that seems to be a rarity. The standard in the business world is payment within 30 days of invoice date, and some clients are now using 45 and even 60 days as their payment schedules. We have to be prepared to wait for payment sometimes.

The impracticality of such a “need a fast-paying project now” request aside, it isn’t good for the asker’s image. It implies that the poster can’t manage their business effectively enough to head off financial issues, and doesn’t have personal resources — savings, family, credit cards, things to sell — to offset a crisis. Colleagues may be sympathetic when we experience business or personal financial issues, but might change their perception of someone who puts that out into a wide-open arena like Facebook. And clients don’t want to know. Even clients we’ve gotten to be friendly with prefer to see us as financially sound and responsible.

Here are some thoughts about protecting yourself from an urgent need for a couple hundred bucks in a couple of days, and from other financial issues that can arise.

Early Steps

For those who are starting your editorial businesses, try to have a cushion of savings in place before you launch. You probably won’t make a lot of money right away, and you don’t want to start out feeling desperate for funds. Desperation shows, and pushes us into making bad decisions about accepting projects that don’t pay what we’re worth. Having at least a couple months’ worth of expenses covered by a savings cushion will help you feel more secure and protect you against a crisis.

Once you have a savings account in place, use it! Not by spending what’s in it, but by “paying yourself” regularly. With every incoming payment, put a portion in your savings account for emergencies (and another portion in your business account for paying estimated taxes).

Be sure to set up ways for clients to pay you as quickly as possible, such as a PayPal account, so you don’t always have to wait to receive a check, get it to your bank, and wait some more for it to clear. PayPal might take a small percentage out of every payment you receive, but it means clients can pay you as soon as they receive an invoice. Like taxes and other non-negotiable costs, be sure to factor this fee into your overall billing structure.

Since most clients will only pay within 30 days of invoice date at the earliest, even if your invoice says “Payable on receipt,” consider budgeting to spend income 60 or more days after you expect a payment to arrive. That way, timely payments are a pleasant surprise and late ones are manageable. This doesn’t mean letting clients slide if their payments run later than promised — you would still chase down any slow payers — but it will help you manage expenses and income more effectively. You won’t be as dependent on the timely arrival of any one given payment, and you would head off panic caused by a late payment.

Think about alternative income sources in case you unexpectedly need fast cash: things you can sell on eBay or Craigslist, a business-only credit card you could tap for a cash advance, family members you could ask for a loan, good enough credit to qualify for a bank loan. This isn’t something to do on a regular basis, of course, but worth keeping in mind should a crisis arise.

Ongoing Techniques

Of course, one of the best ways to head off a financial crunch is to build up a steady stream of income. That takes focused, organized effort, including ongoing marketing.

Even when you’re in midst of a major project, remember to look for and line up a new one to start as soon as you finish that one. Otherwise, you’ll have a huge gap between getting paid for that project and finding, completing, billing, and getting paid for a new one. You might end up having to juggle overlapping deadlines on occasion, but too much work is better than not enough.

Aim for a balance between large and smaller projects. That should help ensure a constant flow of income, as well as a manageable level of work. Smaller projects might generate faster payments as well.

Depending on the type of client you work with, you might be able to negotiate advance payments for some projects, followed by incremental payments as you make progress on a manuscript. This is more likely to be doable with individual clients, such as academics or independent authors, than with publishers and businesses – but it never hurts to try to set up such arrangements. If you never ask, you never receive.

Develop visibility among and relationships with colleagues so they will think of you when they need subcontractors or someone to refer clients to for projects they can’t take on. We recommend and hire people we know, especially those who have shown skills and knowledge that we can respect and might need. (Establishing that kind of network takes time and effort, so be patient and proactive.)

Join professional organizations that provide visibility through membership directories or listings, along with job services, to expand your chances of finding new clients and projects. Use those memberships to enhance your reputation among colleagues by offering advice and resources, answering questions, and otherwise being useful and helpful. That’s the kind of activity that also can lead to colleagues remembering and referring you for new work before you even have to ask.

Establishing good relationships with regular or repeat clients can also come in handy if a crisis arises. Those are the clients you can contact about expediting a current invoice or even asking for an advance on an upcoming project payment. I’d only make that kind of request once, though.

It can’t hurt to sign up with some of the online job services, but be aware that most of them don’t offer leads to work that pays very well. Some colleagues say these resources can offer ongoing and fast-turnaround projects, though, so they are worth considering as a backup to your regular business activities.

The bottom line is to build up a regular flow of both projects and income so you never have to be the person who asks colleagues for help with finding $250 worth of work that will pay in a couple of days. Or has to ask family and friends for a loan. Or has to sell some blood to pay the phone bill.

How have you coped with a financial crisis? Even better, how have you organized your business (and your life) to head off such events?

Ruth E. Thaler-Carter ( is the editor-in-chief of An American Editor and an award-winning provider of editorial and publishing services for publications, independent authors, publishers, and companies worldwide. She also hosts the annual Communication Central “Be a Better Freelancer”® conference for colleagues. Ruth can be contacted at


  1. I had finally gained decent client momentum last spring, and then I was diagnosed with cancer. While the savings cushion has been instrumental at times, I have made it through the past year via a GoFundMe campaign while also taking on projects part-time (fatigue was an issue for sure). It’s taken longer than I thought it would to get back in the swing of things with my freelancing since treatment has ended, as lingering side effects from surgery and chemo have cropped up. As much as we like to think we have control over most aspects of our lives, it’s largely an illusion to varying degrees. Cancer taught me that well. To live on one’s own as a freelancer with a rather unsupportive family has been quite the eye-opening experience. I also know it’s best to work on having more revenue streams, and a move to start ghostwriting paid blog posts is helping in that area. It’s always possible to get back on track, even if it means doing something unrelated to one’s professional work at times. Who knows? Maybe this summer will find me out in the fields topping corn 😉


    Comment by Jeri Walker (@JeriWB) — March 7, 2018 @ 1:38 pm | Reply

  2. A very helpful post, Ruth, thank you. One more point that came to mind: On large projects, you might ask for payments in installments. For one of my publisher clients, I sometimes bill once I’ve completed a good chunk of a long book, then another chunk, and so on, and when I’m finished with the project, I send the whole thing back with a final invoice. I always ask first about installment payments, of course.


    Comment by Katharine Wiencke — March 7, 2018 @ 3:38 pm | Reply

  3. Another really helpful article from you. I was cash strapped in 2016 and another freelancer gave me the money to pay an important bill saying that when she was in trouble a freelancer helped her and she was paying it forward. I will never forget her generosity. Then I inherited some money from a friend who died. I knew how important it was to keep a cushion for future dry spells. You never know about clients disappearing or just not finding good new clients and the cushion is essential for the uncertainty of freelance work.


    Comment by Jacqueline (Jacqui) Frances Brownstein — March 8, 2018 @ 12:39 am | Reply

  4. All good points, Ruth. The one missing point, one that I have pushed for years, is that you need to know your required effective hourly rate (rEHR) to establish your minimum fee and to determine your profit-making EHR. If you aren’t making a profit, you won’t have money to pay your savings account. If you aren’t charging at least your rEHR, then you are always behind and with each project you do, you fall further behind, and have no means for paying into your savings account.

    Charging what some rate survey says is the “going rate” or what some colleague(s) claim is the “going rate” is unhelpful unless that rate at least equals or, better, exceeds your rEHR. But without knowing your rEHR, you are just rolling the dice.

    For those unfamiliar with rEHR, search AAE’s archives for “What to Charge”. For those who think rate surveys are the great, search the AAE archives for “rate surveys”. And for those who think there is such a thing as a “going rate”, search the AAE archives for “going rate”.


    Comment by americaneditor — March 8, 2018 @ 3:15 am | Reply

  5. Knowing how much income you need is very important to succeeding in a freelance business, and arranging for advances and interim payments with clients who can/will do that is a very good structure. Thanks!


    Comment by americaneditor — March 20, 2018 @ 9:52 am | Reply

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