Interview With
Jennifer Lawler
Interview by Jenna Glatzer
Jennifer Lawler, a freelance writer based in Lawrence, Kansas, is a former
college teacher and a practicing martial artist. She has thirteen books
published (four more are forthcoming) on topics as diverse as popular culture,
martial arts, and small business ownership. We spoke with Jennifer about
her book Small Business Ownership For Creative People.
She has also written articles for periodicals such as Weight Watchers,
Black Belt Magazine, and Women's Circle. She teaches adult education
classes in writing, especially for women.
You began writing full-time in 1996. Was it
easy to take this leap of faith?
I certainly had several factors in my favor. I was married at the time
and my husband's income was sufficient to support us, even if I were
unsuccessful as a freelancer. Also, since I had been working as a freelancer
part-time for several years, I knew that I would have more work coming in--if I
just persevered. Finally, my job situation was so terrible that it was
taking a tool on both me and my husband and we agreed that if I resigned the
position, I could try full-time freelancing for about six months or so, and if,
after that time, it did not appear to be working out, we would re-consider our
choices.
Now I'm divorced, with a disabled three-year-old daughter, still making ends
meet--and thankful I have the kind of job where I can be with my daughter most
of the time. I just wish I'd taken the leap years earlier!
Why is it important for writers to develop a business
plan, and what should it include?
The business plan makes you (and those around you) take your work seriously.
It's a must-have if you're planning to ask for a loan for business equipment and
start-up costs. However, most creative professionals fund their businesses
from their own pockets and overlook this step, which can be a mistake. By
thinking about how you plan to run your business, and doing a little research,
you can find out if it's feasible to suppose you can support yourself writing
poetry for obscure journals, or if you will have to supplement this activity
with writing greeting card sentiments for filthy lucre.
At the minimum, you should consider your qualifications, your experience, what
type of expenses you will have, and how much income you can reasonably generate
(check how-to guides in various specialty areas, such as Writer's Market, to
learn the going rate for different kinds of work.) You should spend some
time thinking about marketing--how will you "sell" yourself, so to
speak? Do you need an advertising budget? Where will this money come
from? Creative people tend to underestimate how much work it is to sell,
and are often surprised to learn that they can't spend 100% of their time
creating--they also have to find a market and sell to it.
There are many excellent books and computer programs giving detailed
instructions on writing business plans. These are useful for individuals
who need to convince a loan officer to give them money. For the rest of us, a
written list of goals is the bare minimum needed, and the rest can be hammered
out by reading about the business end of things and talking with experienced
writers and artists.
How do I know whether or not I should get a business
license, incorporate, etc.? Is it complicated?
This is probably the simplest aspect of getting started, although many people
think it is much more complicated and time-consuming than it is. Most
people who don't employ anyone else will be sole proprietors operating on a cash
basis. It's very easy to file tax-related paperwork for a simple business
like this. If you don't have an employer withholding taxes from your
paycheck, you're responsible for doing this yourself, and will need to file
quarterly estimated taxes. This is also very simple--you just estimate how
much money you'll make in the year (you can base your estimate on your previous
year's income and adjust as needed), look at a formula that shows your tax
liability, then divide the payment into fourths. Check out the IRS website
for more tax-related information: www.irs.gov.
For more complicated ventures, when you might have a partner, or if you'll be
hiring others, you may want to form a legal partnership or incorporate.
Although there are books about incorporating yourself, it is best to seek the
advice of an attorney familiar with the benefits and drawbacks of various types
of business structures before doing so.
For local and state licensing issues, you'll have to fill out paperwork and
maybe spend a few dollars on application fees, but again the process is simple.
If you plan to work out of your home, call the local zoning office to make sure
you won't violate any ordinances. Call the state department of revenue to
get a sales tax license (they're required if you plan to sell products
retail--even if, like me, it's just a couple of books now and then). This
department can also clue you in on any tax related questions you might have.
Some states require that you register your company with the state treasurer,
especially if you use a fictitious name (i.e., Jane Doe doing business as
Cookies 'R Us). Some cities require business licenses. None of these
licenses or registrations are difficult to get; they simply require a bit of
time. The city clerk (at the city hall) can help you with many of your
questions. Also, the local Chamber of Commerce and the local office of the
Small Business Administration will give you a hand sorting out the details.
Often, if you try them first, you'll save a lot of headaches. Use the
phone rather than driving all over town. I was able to handle almost all
aspects of starting up my business without leaving my office.
Is the software available for financial and tax records
really useful?
I find the tax software indispensable. I used to spend hours and hours
hunched over IRS forms, hoping I wasn't misreading a statement and double- and
triple-checking my calculations. When I bought my first tax software
program, it took me just an hour, start to finish. (Of course, I did have
my records organized ahead of time, which you have to do, software program or
not). Even the low-end versions have worked fine for me.
I'm less thrilled about financial software programs. They seem to make
things more complicated than necessary. I use a simple accounting
method--income goes on one side of the ledger, expenses on the other and it's
just not hard to keep track. Some people like having spreadsheets so that
they can divide their various expenses into IRS categories, which makes doing
tax forms easier. I admit that this can be useful, but most of my expenses
fall into just two or three categories, so it isn't hard to sort out come tax
time. Other people like crunching the numbers and running reports about
how much it costs to produce a certain item, etc. I find this tedious. If
I need to determine whether a project is worth doing, I can estimate that myself
using a sheet of scratch paper and a calculator. I do use a checkbook-like
program (Microsoft Money) because it goes faster than a paper ledger and does
all my addition and subtraction for me. But although I've looked at
Quicken and others, my bookkeeping is just not complicated enough to justify the
time spent learning the new software, using it, and of course, spending the
money for it.
If you're incorporated, that's a different story. You may even need a
professional accountant to set up a system for you and show you how to use it.
In this case, listen to the advice of the accounting professional. Also,
if you just have no idea what a ledger is, what a bookkeeper does, or what the
difference between income and expenses is, you should have a friendly talk with
your local CPA who will show you the simplest way of setting up your
record-keeping system.
Is it worth it to take a home office deduction, knowing
that increases the chance of an audit?
I haven't taken the home office deduction in the past, although I could have,
because for many years the paperwork was time-consuming and there were many
restrictions--including the fact that when you went to sell your home, it did
weird things to your capital gains (that is, the difference in the value of your
house between the time you bought it and the time you sold it.) These
restrictions have eased considerably and the home office deduction is more
attractive than it used to be. It's certainly worth taking if it reduces
your tax burden enough to offset the risk of being audited. However,
just being a freelancer increases your chances of being audited, since, if
you're not a regular W-2 wage earner, you can more easily hide income.
One of the nice things about some tax software programs is that they let you
know if you're setting off red flags as you go along, and this can help you
decide whether to take a deduction or not. I do plan to take the home
office deduction in the future, as it will be worthwhile to do so.
Do I only need to report income for which I receive a
1099 form?
No. Any income you receive must be reported, whether it's cash or not, and
whether it's reported on a 1099 or not. This also includes barter
arrangements--if you receive goods or services in lieu of cash, you must report
the cash-value of these goods and services. Of course, you may deduct
expenses associated with the barter, including supplies you used to perform your
end of the barter.
Let's say I know I have income coming to me... but not
for a long time. (For example, I've been hired to write books and articles,
but won't be paid until publication-- months or years from now.) What
should I do if I'm broke "in the meantime?"
Other than practicing the phrase "Do you want fries with that?,"
the best thing you can do is anticipate what your cash flow will be over the
next six to twelve months. This simply means that you have to have a
certain amount of money every month to meet expenses, such as mortgage,
car payment, etc., and the amount of money you have coming in from your
freelance work (plus your wage income from your regular job, if you have
one)--the "cash flow"--must be sufficient to cover these expenses.
You should be able to determine pretty closely how much money you need to pay
the mortgage and feed the dog.
You also know what projects you have on the table, and you should have a
reasonable idea of when you can expect them to pay off. Anything beyond
"next year" needn't concern you at the moment. Those projects
are certainly worth doing, but you must also have projects that will pay this
month's phone bill. To maintain a good cash flow, you should have some
long-term projects--such as books and articles that will be paid on publication,
which will help ensure your future--plus plenty of short-term projects, such as
articles that pay on acceptance and business and commercial writing that pays
within 30 days of completing the project.
I always hesitate to suggest that people take jobs, even short-term, that aren't
related to their "business," except, of course, for full-time jobs
that freelancers often keep until they're sure they can make it as full-time
freelancers. Thus, the best thing to do is consider options related to
your business that pay off in the short-term. For example, although I
don't like doing business writing, I do it when my savings account has dwindled
to nothing. I also do occasional PR work for a publisher and some editing
for another publisher when I have slow weeks, or when I've finished one book and
want a breather before starting the next, but also want to eat.
Of course, this requires planning upfront, including having a reserve of cash in
the bank to help offset those times when suddenly all of your business
interruption insurance reimburses you for these types of losses--if it takes you
six months to become a productive freelancer again, you could be bankrupt
without it. Apparently I'm not imaginative enough to think this will
happen to me because I don't carry this coverage, but it is worthwhile for some
people.
Liability issues are also covered under business insurance. For example,
if you're a photographer and you have people come to your home for their
portrait sittings, and one of them trips on your sidewalk and breaks her ankle,
guess what? You could be liable for her medical bills. Again, a
regular homeowner's policy will not cover business use of the home. (It
goes without saying that if you have business property, it should also have
umbrella liability coverage.) Professional liability insurance is like
malpractice insurance. If someone sues you for copyright infringement or
for libel, you could face tremendous legal bills, even if you're innocent. (Not
to mention the fines you might face if you're found guilty.) This type of
insurance will help you pay your bills, but it's not cheap.
There are also policies that pay off in the event of your becoming disabled.
Since a freelancer can't necessarily "sell" her business, if she gets
injured and can no longer stay in business, how will she support herself?
This is worth considering if you're the main provider in your household, but
again, it can get expensive. You have to weight the risk factors against
the expense. People usually find that earlier in their careers they make
do with less insurance and add more as they become better established. At
the minimum, though, you do need to have a policy that covers your business
equipment, and if you do have clients coming to your door, a rider to your
homeowner's policy that will cover you in case of an accident. Neither of
these types of insurance is very expensive.
Can you explain some of the things to watch out for in
contracts, like non-compete clauses and first-refusal clauses?
Every contract is negotiable, which some freelancers forget. It's
important to understand what a contract says, even if you have a lawyer who
looks over every contract you sign. The Authors Guild and other
professional organizations provide sample contracts for freelancers to refer to.
This helps you understand what to be wary of and why. Some clauses that
can be bad for freelancers are clauses that call your work "Work for
Hire" or that demand "All Rights." This means you cannot
use the work again, in any form, which means you can miss out on a lot of money.
Most publishers who ask for these clauses don't intend to use all the rights at
their disposal, so it's not like they'll be missing anything if you negotiate a
more reasonable rights clause (such as "first rights" only).
Non-compete clauses are difficult to enforce, especially when they're used
against freelancers, but that doesn't mean companies won't try.
Essentially, a non-compete says you won't work for another company in the same
field, or for a client of the company you're working for. What happens is
this: an ad agency hires you to write catalog copy for Client X. Client X
loves your work. You could acquire Client X as a direct client, rather
than going through the ad agency. If you did this, Client X could pay
less, since what the ad agency pays you is inflated before it gets passed onto
Client X (this inflation is a legitimate fee the ad agency charges for finding
freelancers and directing the freelancers' work).
Obviously, the ad agency brought you together in the first place, but they're
the losers in this situation. Thus, they may ask you to sign a
non-compete. I never do. I will promise not to steal a client for a
reasonable period of time, such as six months, but beyond that, I feel a company
is out of bounds to ask me to sign a non-compete when I have to have a lot of
clients to make a living--and I'm a freelancer. If they want their regular
employees to do so, that's another thing entirely.
First-refusal clauses, sometimes called options clauses, mean that a publisher
gets the right to look at your next project, such as a book, before you show it
to anyone else. This is not the same as a multiple-project deal, since
they're not guaranteeing anything to you. Instead, if your first project
with them does well, they want to make sure you deal with them again.
Often, the clause will require you to agree to the same terms as for your
first project. This means if your first book is wildly successful,
spending ten weeks on the NY Times Bestsellers list, your second book will still
net you only the same measly two thousand dollar advance as the first one, when
another publisher would be thrilled to pay you ten times as much. If a
publisher insists on a first refusal clause, I always make sure it is carefully
worded and restricts their rights. First, I want the clause to say the
work must be suitable for the publisher. What's the sense of me wasting
time sending the publisher my next novel when they don't publish fiction?
Next, I make sure it specifies that I will send a book proposal, not an entire
manuscript. Otherwise, I am committed to writing a book that no one may
want to publish. Finally, I insist that any second contract be negotiated
independently of the first, so that if I do have a mega-seller, I am compensated
accordingly for my next book.
Also make sure you understand exactly what expenses are yours. Often,
illustrations must be paid for by the writer (and in a heavily illustrated
how-to book, this can be costly). Sometimes rights fees and permissions
fees come out of the writer's advance, a big concern if you're planning to quote
extensively from copyrighted material. Also, indexing is often charged to
the writer (I do my own indexing to avoid this charge).
What are some lesser-used ways for a freelancer to
attract more business?
A lot of writers spend a lot of time sending queries to editors without
attending to the promotion side of the business. I find that radio
interviews, for instance, not only sell books but also sell me, so to speak.
I tell everyone I know what I do for a living. My business card says
"Writing - Editing" on it. My auto-signature on my email
messages lists my most recent book. I teach a writing class at the local
arts center. I know the editor of the local newspaper. I join lots
of organizations and associations and get listed, along with my occupation, in
membership directories. I network with other freelancers--who sometimes
refer business to me. (And I sometimes refer business to them.)
Also, and this has been hard for me, I make sure all of my friends and family
members know that I write for a living and that they should call me if they, or
anyone they know, ever needs some writing work done.
Recently, I started a newsletter that I send to several hundred friends, family
members, fans, editors, etc., that talks about what I'm doing and what I've done
and who I need to interview for an upcoming project. Basically, it's
shameless self-promotion, but I try to keep it light and funny and people say
they really enjoy receiving it. Plus it keeps my name in front of clients
and reminds them that I'm out there.
I'm planning to do more seminars about writing, and in upcoming issues of the
newsletter, I'll make sure readers know I'm available as a speaker.
Let's say I need assistance on a project-- I need an
illustrator for my children's book, or I want to collaborate with a doctor for a
health-related book. How do I know what kind of money or contract to
offer, especially if I don't have a publisher yet?
I always suggest that you simply feel people out first--"If I found a
publisher, would you be willing to consult with me on this book?"
Most people will tell you "yes" or "no" without demanding to
know how much you'll pay. It's extremely unwise to commit to paying
someone for their services if you don't know you'll need them. Also, in
the case of an illustrator for a children's book, usually the publisher wants to
hire the illustrator herself, so it's not your responsibility.
Never promise to pay anyone anything until you're certain you have a
publisher. Before you have that contract signed with the publisher, make
sure all collaborators understand that this is a basic contingency of any
agreement you make with them. You need to respect that collaborators are
professionals, too, so you don't want to waste their time negotiating payment
for work that never materializes. Instead, briefly describe what you
anticipate needing, ask if they'd be interested, and ask if they could let you
know what they'd charge. (Make them bring up money first so that you can
determine if they fit into your budget. You can always negotiate with them
later, but it gives you a starting point.)
You can check market guides to learn what the going rates for various types of
work are. In addition to Writer's Market, there's a book called
"Photographer and Illustrators' Market" which can help you learn how
much various types of freelancers will charge for their work.
As far as offering a contract, often the publisher will have some say as to how
this should be phrased or worded. I use models to pose for my how-to
books, and each publisher has a slightly different photo release form she wants
me to use. When I have used co-authors, the publisher has wanted a
contract with each of us. When I have used illustrators, I have used a
version of a photo release form, saying something along the lines of, "Joe
Smith, illustrator, will deliver ten line drawings for "Jennifer's
Next Book" by December 19, 2001. The line drawings to be produced are
specified on the attached captions list. The fee for this work is $X.
Joe Smith agrees that Jennifer Lawler may use these drawings in her above-named
book, and for any subsequent reprints of this book."
What's the biggest mistake you made in your writing
business?
Spending too much time and energy doing projects that didn't contribute to my
career. Like many freelance writers, I did a lot of low-paying ,
low-exposure work long after I should have given it up. I guess I just
couldn't believe people were willing to pay me for this! Thus, some
projects I really wanted to do got put on hold for years, in some cases until I
lost enthusiasm for the project before I ever got around to doing it. In a
related way, I didn't think concretely about what my goals were--what I wanted
to accomplish as a writer--until several years after I had started freelancing.
If I had articulated this at the beginning, I would have had a smoother
journey. I think.
Anything else you'd like to add?
Most writers (and indeed, most creative people) do not realize how important
perseverance is. I received hundreds of rejection letters (and a few
article acceptances) before my first book was published. If I had given up
after the first one hundred, or the second one hundred, I wouldn't have thirteen
books published, more forthcoming, and the best career I can think of.
Never give up, even if you do have to keep your day job.
Buy Jennifer Lawler's book, "Small Business Ownership for Creative
People" (Aletheia Press, 2000), by clicking
here.
Jennifer's website is in the works. In the meantime, she encourages
writers to visit www.previewport.com,
which lists authors and their credentials. People who have published at
least one book and three articles are eligible to be included in the database,
free of charge. She also recommends www.freelanceonline.com,
especially the open forum.
