Independents’ Success Depends on Business Skills

By Elizabeth (Bette) Frick, Ph.D.

Welcome to my first column for BWA. When Carol Elkins asked me if I had information to share with BWA (she must have been mistaking me for an "expert" because I just moved to Boulder from Minnesota), we agreed that I would share some articles that have been previously published in my column "Business matters" in the STC (Society for Technical Communication) Intercom.

I am happy to share my struggles and success because others helped me grow along the way, and I want to help others achieve independence as writers. I went independent in 1990 as a technical writer/instructional designer. I now teach technical writing in corporations. My business has grown steadily, albeit slowly, in these 15 years.

Like many other independents, I launched my practice after a layoff (actually, two different layoffs in 1990). Others begin their independence in times of tight employment. Still others lurk, waiting for the opportunity to leave "captive employment." Independence seems attractive: less bureaucracy, less focus on business, more focus on our craft.

However, we soon discover that independents are first a business and second, technical communicators. Our work may feed our souls and pay the bills-today. If we ignore business matters, our practice will not grow and will ultimately fail. It is not enough to be "technically" smart—we have to be savvy in business to succeed in any economy. For me, this discovery was a shock: As an English major, I had deliberately avoided business courses in college.

Ironically, independents are much closer to business issues than we were as employees because we often perform the functions of all departments all the time. We must be marketing managers, technology whizzes, bookkeepers, and janitors as we struggle to make our businesses function efficiently and productively so we can spend more of our time doing what we love. This article will help you start toward thinking of yourself as a business so that you can stay in business.

Why should you care?

The small business failure rate is about 50% of startups, according to the U.S. Census Bureau. Or, thinking positively: About 50% of startups succeed, and the basis of their success is careful planning and good business practices.

One clich? about career-strategy says, "Do what you love; the money will follow." In this article, I want to amend that:

• Do what you love.
• Plan and operate an efficient, effective business.
• The money will follow.

Start thinking of yourself as a business

Large corporations recognize three main functions:

Strategy (direction of the business)
Operations (methodology and structure of running the business)
Execution (delivery of services)

Independents often spend so much time in execution (delivering service) that we may ignore consistent effort in the strategic and operations area. It is tempting to strive to be doing billable work all the time and in off times, to improve our technical skills. However, strategy and operations, if handled thoughtfully, will allow you to efficiently produce your product and your income.

In this column, I'll discuss strategy and operations in general. I won't address the Execution category, because that will be different for everyone (and that's what you know best, anyway).

Later columns will focus more on specific strategic and operational issues such as business plans, marketing plans, and financial plans.

Strategy (business direction)

As employees, few of us became involved in strategic thinking and planning in the companies we worked for. That was the job of management, and we were often "just" the workers. Well, now you ARE management. Here's the minimum you need to know to direct (or redirect) your own business wisely.

Look like a business right away.

Corporations who hire you expect you to operate as a business, not someone freelancing between jobs. This involves acquiring the appropriate licenses, tax ID numbers, sales tax numbers, assumed name, business checking account, and business credit card. Not sure about your state's requirements? See the sidebar for resources. Many states publish free information. For example, Minnesota provides A Guide to Starting a Business in Minnesota and updates it annually. It's over 300 pages (and is free?except that I already paid for it with my taxes). In addition, I can download most documents I need.

You usually don't need an attorney to establish these simple business practices. Once you've done this, you need only schedule appropriate renewals of licenses and registrations.

Define yourself with a Mission Statement.

When I first launched my independent practice, I accepted every contract offered. I was just too scared to turn down business. When anyone asked me what I did, I said, "What do you need done?" I looked desperate and scattered, and my clients' contract offers reflected their perception that they could get me to discount my services. Because I had not defined my business niche yet, they perceived me as a commodity and bid accordingly.

I didn't see any growth in income until I defined myself strategically in my Mission Statement. A company's mission can be also defined as its purpose: "What do we do? For whom? And why?" Your Mission Statement helps prevent your temptation to be all thing to all customers.

Knowing what work to reject because it lies outside your Mission Statement will help you build the right business. Clients have asked me to write copy for their website or to work with them on government proposals. These projects, while interesting, are not my core business, so I have referred them to other STC independents.

A clear Mission Statement also helps you to market your specific talents. When you can define yourself succinctly ("Web designer" or "grant writer" or "science writer), you have a better chance of explaining your skills to potential clients.

Write a business plan and update it every year.

A business plan is a document that outlines business goals, expected income and expenses, pricing strategies, marketing plans, and many other issues. Business plans vary across industries and company size. There's no "one size fits all" in business plans, although there are many templates. And your business plan is never final. Update it every year to reflect changes in your practice and in the economic world around you.

The concept of a business plan scared me at first, especially all those financial sections intended for potential lenders that were included in the templates. I realized that since I wasn't seeking financing, I could write a plan just to help me focus my business and document my direction. You can survive awhile without a plan, but a plan is necessary to thrive.

Look for books and software products that can help you plan, or consider taking a class through your local community college or through SCORE, a nonprofit association dedicated to providing entrepreneurs with free, confidential face-to-face and email business counseling. Business counseling and workshops are offered at 389 chapter offices across the country.

Most Sunday papers list classes in the business section. I counted three courses in our local paper that would help new and seasoned entrepreneurs with their planning—all for under $50 (one was free).

Such training is essential, says STC independent Elaine Garnet: "I started my own business in December, 1999. I took a business training course, which I have found to be invaluable. My first step was the writing of a business and financial plan that was accepted by the bank as testimony for a line of credit."

Write a marketing plan as a subcategory of your business plan.

As I interact with other independents, I find their concept of marketing is underdeveloped. Because they are so good at their craft, they think clients will come to them. Not so! Every business needs to market: define products, determine audiences for products, research those audiences' needs, create marketing tools, and network. Marketing is like swimming: If you stop, you'll sink.

Define a marketing budget as a percentage of your gross income.

It's hard to spend marketing money unless it's defined as a necessary expense in your budget. Money spent on marketing usually doesn't produce results immediately. Instead of sending out a newsletter or developing a website, independents may feel more comfortable buying a computer or some software-something they can see and use every day. Spending marketing money wisely is a good business discipline to learn.

Operations (running the business)

Operations includes the nuts-and-bolts of operating the business (as opposed to the work you do or the strategy you plan).

Pay good advisers and listen to them before you take important actions.

I call my attorney and accountant whenever I have an important business decision. I am moving toward getting a financial planner. I have paid management consultants to help me draft my Mission Statement. If I were to incorporate, I would have a board of directors direct me. Sure, I hate writing out checks to pay for these services, but I see the value of good business advice in helping me develop a sound strategy or avoid tax penalties.

Write a financial plan for your own benefit, even if you're not seeking financing.

If you've been used to receiving your paycheck after all deductions are taken, receiving lump sum payments from clients may tempt you into thinking you have more money than you do to operate your business. Learn to use a spreadsheet to determine how much to set aside for self-employment taxes each month (consult your accountant). Spreadsheets will help you with budgeting. When should you pay yourself and how much should you leave in your business account? How much should you set aside for retirement monthly? A financial plan can help you define the right kind of insurance to protect you and your equipment.

I am not naturally comfortable with budgets and spreadsheets (after all, I am a "word" person, not a "numbers" person). My financial plan helps me stay on target and avoid scrambling at the end of the year to fund my retirement account.

Have a technology plan.

What kind of technology and software will you own? What is the minimum you can own and maintain? What is your plan to update? Without a plan, I became "gadget girl"—I bought way more software and hardware than I needed because I rationalized that it would make me more productive. It didn't; it only reduced my profit. Now I have a plan to upgrade my hardware and software and to take classes to maximize my use of these tools. A written plan helps me avoid impulsive purchases.

After a few minor disasters, I have also created a technology back-up plan (burn two CDs every week; carry one in my briefcase when I leave the office; put one CD backup in my safety deposit box every month, etc.) Another detail is my low-tech storm protection: Unplug everything (including the phone line into my computer) every time I leave the office in thunderstorm season.

Write procedures.

It seemed silly to me that a solo practitioner should document office procedures. However, once I invested a few hours in documenting my business practices, I've realized much greater efficiency. Since I'm not accountable to any government agency (yet), I just use checklists and bullet points. For example, I have weekly, monthly, and yearly close-out checklists installed on my electronic calendar. Other written procedures help me document activities I don't do often enough to memorize, like backing up e-mail addresses.

How to move toward good business practices

You won't be able to implement efficient business practices immediately unless you have the luxury of taking off months from practicing your craft. Instead, you can phase in these business practices, perhaps working on them for four hours a week, or two days a month, until you have structures in place that work for you. Others might concentrate on one phase of their business per quarter: marketing in the first quarter, finances in the second, etc. It's important to schedule this time on your calendar and protect it as vital to your survival, because it is!

And you won't have to do your business planning alone. Use one of the excellent resources listed in the sidebar. Just get started, or if you already have some of these in place, improve upon them. "Slow" is fine as long as you're making progress. It's up to you, as an independent, to improve your business practices, which will then improve your stability and income.

About the author:

Elizabeth (Bette) Frick holds a Ph.D. from the University of Minnesota. She practices as The Text Doctor?, delivering training in technical and business writing. Bette served as President of the Twin Cities Chapter of STC in 2003-2004. She is a new BWA member, having moved to Boulder in late 2005 to be near her new grandson, Axel. Contact her at efrick@textdoctor.com or through her website, www.textdoctor.com.

© Elizabeth Frick, Ph.D., The Text Doctor®