But what are the defining characters of each? What follows is a no-nonsense guide to who’s who and why. Beware: stereotypes abound.

Are you a freelancer?

A freelancer is a flexible worker who may or may not work via a contract. Often they don’t. They may work from the comfort of their own humble abode, or for the more profitable freelancer, from their luxury apartment in some fashionable leafy London suburb. Some don’t even get out of bed to work, they just slouch there with a laptop resting on their belly, soiled in their own marmite.

Categorising a freelancer is done by various methods. Sometimes the working environment can have an influence, other times it’s the contract (or lack of), or even the industry. For example, a writer who isn’t employed in the traditional PAYE sense will always be referred to as a a freelancer and not a contractor.

Freelancers also tend to flit about between different contracts and clients.

Are you a contractor?

Contractors are often geekly bespectacled types who work on location in offices in IT orientated positions. They all know HTML. And they’re the ones always looking over their shoulder in case the HMRC should peer through the window to check if they’re getting too close to members of staff thereby falling foul of some obscure IR35 technicality.

The main difference between freelancers and contractors is that the latter usually work on long contracts whilst freelancers tend not to do that. As previously said, status is partly defined by the industry as well. Contractors don’t tend to work from home.

References to freelancers and contractors are often used interchangeably. Some people refer to the freelancing community, and when they do this, they are usually encompassing freelancers AND contractors. This also happens vice-versa.

To summarise: freelancers tend to work in the media world and contractors tend to be in the IT field. Confusingly, when an IT contractor becomes a consultant, they are sometimes referred to as ‘freelance consultants.’

Are you a small business?

Freelancers and contractors both operate their own businesses, and so they can be categorised as small businesses. Or SME’s.

In terms of defining a small business, sections 382 and 465 of the Companies Act 2006 defines a small company as one which has a turnover of not more than £6.5 million (with a balance sheet total of not more than £3.26 million) and no more than 50 employees.

Unfortunately, this definition isn’t universal, even within the confines of the UK

Are you a micro-business?

The term micro-business is often used informally and can be placed under the same umbrella as a small business. However, when the term is used it usually refers to companies making less than £2 million per year and employs less than 10 people.

Here on FreelanceAdvisor we make numerous references to freelancers, contractors and small businesses – after all that’s who we’re here for!

In summary: A freelancer or contractor can also be defined as both a micro-business and a small business. Annoyingly, this definition can vary depending on who you’re talking to; for example, energy companies and banks may have their own interpretations for what constitutes a small business.

Image by ♥KatB Photography♥ | cc

The latest tax planning seminar for freelancers and contractors, hosted by financial planners Wealth Matters, will offer a timely, in-depth insight into all the big issues facing your business. But be quick, it’s coming up very soon.

The idea behind the evening is to provide contractors with practical common sense business advice as well as taking an informed look at what the current economic climate has in store for them.

Here’s what the roster of expert speakers will be talking about:

• Iain McIlwee from PCG ‘the voice of freelancing’ will speak about current events and issues affecting contractors and freelancers.

• Wealth Matters’ Julian Gilbert and Paul Cleworth will talk about tax planning including a review of the Coalition Budget, how this affects contractors and what you can do about it.

• Darren Fell and Steve Crouch (ex. HMRC Chartered Accountant) from online accountants Crunch.co.uk will also be discussing the budget together with providing simple tax saving strategies for contractors and explaining their unique on-line accountancy service.

• David Jones from financial economist’s Dimensional will be speaking about “logical investing” in today’s markets.

To find out more email info@wealth-matters.co.uk or call Tel: 0800 954 1501

The format of the evening is as follows:

• 6.30 pm Arrive at Hotel, Reception (Teas, Coffees)
• 7.00 pm Seminar to begin – introductions
• 7.05 pm Speakers to present to audience
• 8.30 pm Question and Answer session
• 8.45 pm End

There will be opportunities for those attending to chat with the speakers both before and after the event.

The seminar takes place on September 9 2010, at The Penta Hotel, Oxford Road, Reading.

My top tips for dealing with complaints:

• Make it easy to complain — let clients know that you want to hear if things are not quite right.

• Let the client vent if they want to — listen to and acknowledge how they are feeling first before getting to solutions and don’t be drawn into arguing.

• Thank the client — simply thanking the client for taking the time to inform you of an issue takes the steam out of a situation.

• Find a way to apologise — even if they are ‘wrong’. They are the client and they are dissatisfied. Do it only when they have given enough detail so it rings true.

• Break down the complaint to find out the real issue and what would be a solution to it.

• Fix the issue if you can. Make sure you follow up the complaint. Be proactive with a customer to find a solution.

• View complaints as gifts — they allow you to review your service and innovate and also recover a client who may have otherwise gone elsewhere.

• Put a prevention plan in place to ensure a similar complaint doesn’t happen again.

It may be difficult to take complaints without getting defensive, by seeing them as part of the feedback process and handling them well you can actually turn them into an advantage. I often remember favourably those who have dealt with a complaint of mine well and exceeded my expectations.

I definitely remember those who didn’t seem to care.

By Business Mentor Toby Buckle

1. Plan

If you want to make the biggest difference to your productivity, plan your time. You’ll ensure you’re focusing on the right things and using your time more effectively.

• Just 5-10 minutes each day planning your tasks and actions for the day.
• Look a few days ahead each day so you know what’s coming up.
• Use just one diary. Keep ALL your appointments in one place — both work and personal.
• Create work time. Book time for all your daily tasks — emails, phone calls, writing a report, research etc.
• Chunk your work. Divide your time into chunks and work on one type of task at a time.

2. Systems and Priorities

When you’ve got to much to do, don’t expect to do it all. Make the best use of your time by focusing on what’s important.

Organise tasks and actions into order of priority. Spend most of your time focusing on the high priority tasks to avoid them becoming urgent.

Get high priority tasks done first and break larger tasks down into smaller ones. If you’re often working on ‘urgent’ tasks, find out why. What causes the urgency — lack of time, poor prioritisation, other people’s deadlines?

Create systems to make life easier. Simple things like files and folders to organise your email and paperwork as it comes in.

3. Delegate

The busier you are the more you need to delegate. Spend your time on important tasks that no one else can do rather than day-to-day tasks.

Delegate tasks someone can do quicker, more easily and possibly better and more cost effectively than you. Hand over routine tasks that aren’t your main skill set.

If you delegate your time, you’ll free up more time for yourself and your business.

4. Distractions and interruptions

We’d get more done if we didn’t keep getting distracted or interrupted. Whether it’s emails, phone calls or people stopping by our office without an appointment, interruptions are part of every working day.

• Switch off the phone, or put the call through to the answer machine or voice-mail.
• Book a meeting room, use an empty office or go to a different location if you want some undisturbed time.
• No meetings without an appointment — this will avoid impromptu drop-ins.

If you do get interrupted, arrange a time to talk later. Put a time limit on the interruption.

5. Learn to say No!

Busy people often say yes to everything. Get back control of your time by saying ‘No’.

If you keep saying yes, you’ll end up working late and have no free time because you’ve filled every minute with things you’ve said yes to. You’re more likely to end up stressed and overworked.

Don’t say yes immediately, especially when you don’t know what you’re taking on. Instead give yourself some time… “Can I get back to you, I need to check my diary?”

Say no before you say yes. Find ways of politely saying no without being harsh or abrupt. Give a reason without the need to go into lengthy, long-winded, rambling explanation.

See also this great post on ‘Saying No’ for creatives [via A List Apart]

6. Manage your emails

Email can be one of the biggest distractions and drains on our time. Particularly if you find yourself constantly checking your inbox. Unless they’re a critical part of your work, they rarely need to be responded to immediately.

• Switch off the ‘new email’ alert
• Check your emails only two or three times a day**
• Set aside time to read and respond to email.
• Use filters and folders to organise incoming emails.
• If you use Gmail try Google’s new ‘Priority Inbox’ tool.

If you need to read and respond to emails, block out a couple of time slots in the day to do that. DON’T check your emails throughout the day and limit the amount of time you spend on emails.

7. Setting Expectations

If you spend time working with other people, it’s important to set expectations. Let them know what it is you want and when. Don’t let other people’s actions create added effort and pressure for you.

If you rely on other people providing you with information in order to be able to complete a task, don’t leave things to the last minute. Leave enough time for yourself to do the work and if you can, schedule work ahead of time to avoid last minute deadlines.

8. Procrastination.

Many people have a tendency to put things off. If the task is worth doing, don’t make it worse by leaving it. Do it sooner rather than late. Here are a few ways to deal with it:

• Break a larger task down into smaller steps: What’s the first thing you need to do? The simpler the step, the easier and more likely you are to do it.
• Quick Bites: Tackle many things by spending just 5 or 10 minutes on it. Give yourself a time limit — a) it’ll be less daunting and b) you’ll be more focused.
• Just do it!: If you’re constantly putting a task off, the next time you find yourself procrastinating, just do it — there and then.
• Dump It: Is it worth the energy you’re putting into it by procrastinating? If it is, do it, if not forget it and move on.
• Delay: Sometimes procrastinating can be the right thing to do. You might be putting it off because it doesn’t feel right, or you don’t have enough information. Leaving it might be the right thing to do.

9. Taking Breaks

Even if you’re busy, you need to take regular breaks. How often do you work through your lunch break or don’t take a break until it’s time to finish for the day?

Take a break every hour for a few minutes and a longer break every few hours. You will be fresher and better able to concentrate. Get up and stretch, take a few deep breaths, get a drink of water.

If you can, get some fresh air and exercise at lunch-time. Don’t rely on stimulants such as coffee and sweet snacks to give you a boost when you’re flagging. Take a break and do something different — even switching from one type of task to another.

10. Keep the balance

Working hard is all very well, but if you focus all your time and effort on work, other areas are likely to suffer. Particularly:

• Your health: make sure you find time to exercise or at least be active every day. Simple ways of increasing your activity every day as well as taking specific exercise in the gym or by doing a sport. Don’t grab unhealthy, high calorie snacks and meals because you don’t have time to eat properly. If you’re healthy, your far less likely to get ill, suffer from stress and you’ll be able to tackle challenges more effectively.
• Your relationships: often when you’re busy, your relationships suffer. You have less time to spend with your partner, family and friends. Make time. You need to unwind and relax as much as you need to get the work done.

Organise your time and manage your hours. Fit the work into your hours and not hours into your work. It’s your time, it’s your choice as to how you spend it.

Take control and if you want to be more productive, be more selective about where and how you spend your time.

For more ideas on managing your time, download free resources on www.clareevans.co.uk.

Clare Evans is a Personal and Business Coach and Author of Time Management For Dummies.  Download her free Time Audit and other resources from www.clareevans.co.uk

Icon image from FindIcons.com | cc

Listen to the podcast:

Transcript

[00:05] Andy: Welcome to Freelance Advisor brought to you by Crunch, ridiculously easy accounting. This is episode 26, the second part of our credit control and debt collection discussion. I’m Andy White and I have with me Darren Fell, founder of Crunch.co.uk, Rob Warlow from the Business Loan Services and author of Loan sharp. Get the business finance you need, and Adam Home, operations manager at Credit Safe LTD, a family run credit recovery agency.

What should we do if it all starts to go wrong? Rob would you like to get the ball rolling?

[00:35] Rob: Yes. In most cases people wonder when do I know it’s gone wrong and it’s usually the letter from the bank where you’ve written a cheque a suddenly you realise the bank hasn’t honored it. That’s the first indication that things are not going to plan.

But clearly, if things are starting to go wrong there are some immediate steps that you can take. One of the first ones is to really just step back and take a good look at exactly where you are. I walk into many business owner’s offices and see a pile of paper on the desk and ask “What’s that?” and they say “Oh, those are my invoices”. So it starts with good management of documents and knowing exactly where you are every day or every week in regard to what is owed to you. So if you’re in that position where you’ve really lost control of your cash flow it’s taking a step back and first of all starting to priorities your list. Sit down, take each invoice, one at a time, and start listing down, the name, what the service was, when the invoice was issued, when it should have been paid and where you are today as regards, when did you last chase it and any other useful information that you think is going to help you get that payment. Then the next step is getting on the phone, picking that phone up, writing a letter or whatever, getting in front of the client to know they are now well overdue. This is another thing that business owners don’t like doing is getting a bit harsh with the client, it doesn’t matter, at the end of the day it’s your cash flow you’ve got to protect. Whilst you don’t want to be putting a good relationship at risk, it’s more important that you actually get that payment into your account. If you think “Well, this is a good client”, well at the end of the day how good can they be if they’re willing to put your business at risk. So it’s knowing where you are and prioritising the list are the two first good steps you can take.

[02:24] Darren: They clearly are not a good client if they’re doing that to you and keep stringing you on. You’re absolutely right. Many businesses are like that, they’re doing it very manually, they’re using Word templates to get their invoices out, they’ve got big piles of them, they’re not doing it properly. There are many pieces of software they can employ to get things done. They even put two or three hours a week into just getting all their expenses in, getting all the invoices out the door or email them or issue and print them then post them and then post them. Just by setting that time aside in sort of admin mode, it can make a massive difference to seeing exactly how their business is – because you’d hope that piece of software would tell you exactly your cash position. How much revenue you’ve generated, how much cash is actually in the bank.

Now if you’re doing it in the older school way of things and you simply don’t have the time to do it there’s this whole new world of virtual assistants out there or even credit controllers that can come in. They’re really not that expensive. We needed them back in the days of Pure 360, my first business, we went gun ho on selling. We were going so well and then we realised we had literally £120,000 in plus 120 days. I know exactly what it’s like where business can start running away with itself, maybe it’s going really well, maybe it’s not going so well, and you don’t do the key basics and you end up with those big piles of invoices there.

[03:52] Rob: Yes. I’m a great fan of outsourcing what you don’t know. It’s really about people starting a business because they have a particular passion. People don’t wake up on a Monday morning and say “Yeh! Today’s the day I’m going to be raising and chasing my invoices!”. So it’s the last job that gets done. If it’s not your bag, outsource it, get the software, get somebody else to do the chasing, if you’re not comfortable with it, do whatever you can to make sure everybody knows when payments are due and that you need the cash today.

[04:20] Andy: Getting your invoices out on time is a big thing, just remembering to invoice at the right time and don’t delay it.

[04:25] Adam: No absolutely. Never delay your invoice because you can only expect to be paid after you’ve issued the invoice. It’s something simple like that that can really trip up your cash flow. If you got one large client and you’re a week late in issuing the invoice the chances are they’re going to be at least a minimum of a week late in paying you. So you need to make sure you’re dotting the i’s and crossing the tees. If you’re not comfortable with chasing your own invoices, if your partner has an hour or two free every week it’s something that they could potentially do on your behalf and that gives the distance – a lot of freelancers are going to be working very closely with the end client. They may be working in their premises and they may be working cheek to jowl with them on a daily basis. If you’re not happy to phone up somebody that you’re in a position like that with and who you’re going to be meeting again next week, if you can get somebody with a bit more distance to give them a call and a nudge and find out when the invoice is going to be paid, that can make your life considerably easier. Similarly if you know another freelancer that you trust, there’s no reason to stop the two of you swapping your aged debtors and getting together once a week in one of your houses or in your offices…

Andy: I like that idea. A sort of a credit control buddy.

Adam: Yes. Essentially.

[05:45] Darren: Adam, just for the people who’ve just set out in business, just can you quickly clarify that aged debtors thing so they get it.

[05:54] Adam: It’s just any body that you owe money to who are past your terms. So if you’ve got five accounts that are past your 30 days they are aged debtors. Anybody who’s still inside your payment terms or who’s paying on time. It’s those people who are outside of it so you want to be hitting the oldest people first – people who are the most overdue.

[06:15] Darren: I made the mistake of flying out with a number which some people in the audience wouldn’t have understood anyway, like 120 day plus people. They’re aged debtors. So you’ve got to catch them within 30 days, worst case get the money in by the 45th day point. Just on that point of getting invoices out on time, that can make a massive difference. Just from my perspective when Iwork with a freelancer in another business and I’ve spoken to them and we’ve specced it out and in the same day I come back to my to my email box, it’s say 5 o’clock after I’ve met them earlier in the day, and I’ve have an invoice for the first part waiting for me from them – I can only say, I’m impressed. It’s not “Oh how dare they get those straight in”, I’m impressed that they are that on the ball. In out new build of Crunch.co.uk, we got in this great freelancer, we saw him, we specced it out, he understood it, and there was an invoice waiting for me in my inbox by the end of that day – impressed!

[07:14] Adam: Being proactive in your credit control will not hurt your professional standing amongst your peers or your clients. In fact presenting a professional face to handling your own accounts and your own cash flow is only going to reinforce the respect that your clients have for you. Not only are you good at the job that they’ve hired you for, but you’ve got enough business acumen to understand that cash flow is the very life blood of your business, and that you’re taking a proactive approach to making sure that that flow will always be there.

[07:46] Rob: I couldn’t agree more. It really sets the tone for how you’re going to deal with that client going forward. It really sends a clear message – I do things in a structured way, I do things professionally. It really gets your contracts off on a very firm footing.

[08:02] Andy: So what would the debt collection process be then Adam?

[08:05] Adam: Well initially assuming that you’ve got out the invoices et cetera to the client, you need to get on the phone – that’s absolutely imperative. A lot of people will suggest writing letters, however letters can be ignored, can be misfiled in the bin. If you get on the phone to your client, or your last client, you’re a lot harder to ignore. So, first things first, if they’re overdue, whoever is the most overdue – get on the phone and find out where your money is.

The second thing to do is to take notes. Even if it’s as low-fl as writing down what they say to you on the invoice you’re chasing itself, and keeping that somewhere safe. If they say, “Yes, I’ll definitely send you the cheque on Friday”, if you haven’t made notes, how are you going to know if they have definitely sent you the cheque on Friday? You’re probably not going to remember everything. So make notes however you wish, on your phone, in an email, in a spreadsheet, whatever you prefer. But keep a record of what they’re saying to you.

If it’s urgent, then make it clear to your client that there will be no second chances. By this point they will already be overdue – probably significantly overdue. If you’re on the phone to them and they’re promising you payment, make sure that they’re aware that if that payment is not received, that you will be upping the ante and placing it for collection with somebody else. You don’t necessarily have to tell them who at this point, but they do need to be aware that they get one chance to deal with you, and then they’ll be dealing with somebody else. Especially if it’s a case that you’re own cash flow is suffering as a result, just make sure that they’re aware that you’re playing hardball now, you’re not going to be messed around any more. Going back to what we said previously as well, never tell your clients or your past clients that you need the money. If you’re in particularly dire financial straights, do not tell the client that you desperately need this money to pay your rent, or your rates or your water or anything of that nature, because there are a significant minority of business owners who if they know you’re in financial trouble, will literally just sit on your cash for as long as humanly possible in the hope that you actually just go bust, and they either get to keep the money or merely only pay a small amount of it to the receivers or the liquidators.

[10:23] Darren: That’s pretty harsh tactics isn’t it but it’s got to be employed because maybe they’re suffering equally so I think in essence just don’t tell them the truth. You maintain a strong line that your business is going fine, you need to collect it, you gone past the terms. Don’t say, “Look I need to pay my VAT bill” or “The corporation tax is due and I need the money”.

[10:50] Adam: Yes, absolutely not. Just say, “This needs paying because it’s overdue”. Don’t go into any more detail than that, even if you’re reduced to living in your car and making a call on your mobile phone. Please don’t tell the client that because there are unscrupulous individuals who will take advantage of freelancers simply because they can. You don’t want to be one of those people.

[11:12] Darren: OK. Just so I get this straight, and for the audience who may be feeling a little bit passionate, shall we say, about the scenario about being owed this money. It’s about holding a professional tone isn’t it. For God’s sake don’t do letters because it’s going to go in the bin, don’t do emails it’s not going to worth while, get on the phone and hold a professional tone, you don’t want to be swearing down the phone at them. What’s your thoughts, Adam, should you turn up at the office or is that just a no-no?

[11:44] Adam: It’s going to depend from freelancer to freelancer and client to client, there is no magic bullet. We don’t do personal visits here but when you deal with corporate debts it’s often far harder than it is with personal debts because you’ll have, potentially, reams of invoices, contracts that are 5 – 10 pages long. It’s simply not practical to turn up on somebody’s doorstep if you need to refer to documentation like that. We would always recommend that you just call. It’s personal enough but without the possibility of it becoming intimidating for either the client or the freelancer. If you’re a freelancer and you fall out with your client, you may very well find yourself physically thrown out of their premises and obviously any type of physical altercation like that is not going to help you get paid, which is what you want at the end of the day. If you’re uncomfortable in calling people that you’ve potentially been working very closely with, just ask your partner or your mum, or your nana, if she’s competent enough, to just spend an hour or two a week just touching base with your clients. If you’re calling before the invoice is due it gives you an opportunity to find out if there’s any issue with the invoice prior to when you’re actually expecting the money to hit your company. As for when it’s overdue, Sid, our MD here has a line he likes to use and its, “Persistence overcomes resistance”. Nine out of ten times if you’re on the phone every couple of days saying “My cheques still not here, can you make a bank transfer”, as Rob said before, he who shouts loudest gets paid first.

[13:20] Darren: OK. So there’s the preamble to the process. They’ve gone past the line, Adam, you’re handing it over to a specialist agency. You’ve told them that, you don’t need to tell them exactly who it is, you don’t need to say it’s Credit Safe in this example. What’s the next steps? What steps do you go through?

[13:35] Adam: The first thing is never ever pay a collections agency any money up front at all. If they’re as good as they claim to be, they would only want paying after you’d successfully received your funds. There are a number of agencies out there that purport to offer “no collection no commission” debt recovery, but they will charge you a £230 – £250 file placement fee, or they call it a joining fee, or a registration fee. But that’s essentially to cover them if/when they don’t collect your money. I spoke to a freelancer the other week who was in PR. I had a very long chat with her, I spoke to her a couple of times during the course of the day, and later on she came back and said that she’d decided to go with another agency. She said that she’d paid said other agency £229 plus VAT merely to begin acting on her behalf for a £2,000 debt that she had outstanding. The debtor at the end had offered £300, so after paying the fee to the collection agents and then paying their commission on top, she would have been left with about £45 in total for her pocket out of a £2,000 bill…

[14:48] Darren: What!? That is unreal. Adam is there any way – you now got me a little bit concerned and I’m sure the audience is a bit concerned as well on a debt collection agency, I can imagine there’re some cowboys out there – how do the freelancers and the small businesses search for a reputable debt collection agency that they can trust that won’t rip them off?

[15:11] Adam: Ideally if you’re going to choose a reputable collections agency you need a recommendation. Whether that comes from another freelancer, from your accountant or from a member of a professional body that you my be part of. A lot of them will have services that they recommend to their users. Phone them up and find out if debt recovery is a service that they are able to offer their members. If not, find out if they can personally recommend a reputable agency to you. Same with your accountant and other freelancers, they may have had the same issues and they may be able to point you in the right direction. But please, please, please, don’t pay any collections agency any money up front for the simple reason that they’re as good as they’re trying to tell you they are in the sales call, they wouldn’t need the money up front – it’s as simple as that.

[15:57] Darren: OK. Well I can concur as a chartered accountancy firm, Crunch has been looking for a really good debt collection agency for freelancers and small businesses for some time and I can tell you Adam, it’s not been an easy job at all. It really hasn’t been. I’ve been so unimpressed with conversations and meetings and haven’t felt an inherent trust. I think that’s a classic thing to watch out for if there’s any advanced payment it’s not good. The other thing that Credit Safe came with in terms of me picking them as a debt collection agency for our clients is a Professional Contractors Group accreditation, they are the ones approved by the PCG which is saying a hell of a lot. So get advice, get recommendations or overall look for an association recommendation like the PCG.

[16:45] Adam: Absolutely.

[16:46] Andy: Excellent. Exercising your right to add late payment and interest is an interesting one, I know certainly in my case there’s a sort of reluctance to do that, is there a sort of mind set you should adopt?

[16:59] Adam: Well, in my experience it’s a very useful stick to go along with the carrot of the service that you’ve provided in getting your clients to pay you. If you’re quite clear up front that you won’t tolerate late payment and that you will add your statutory late payment costs and interest, you can always use that when you’re chasing your overdue accounts. So they say, “Yes. We’re definitely going to pay it on Friday”, “OK. Are you sure you’re going to pay it on Friday because otherwise I will be adding late payment costs and interest”. The late payment costs and interest are statutory so you don’t need to include it in your terms and conditions because you’re always protected by that piece of legislation…

[17:40] Andy: Ah. That’s interesting.

[17:41] Adam: So can leave it out of your terms and conditions; you don’t need to include anything about late payment. Some freelancers can be wary of that because they think it gives the wrong impression to the client. So you can just completely leave it all out and you can still add the late payment costs and interest in line with the legislation at any point after the invoice is due. If you do add it, if they then turn round and pay immediately, be prepared to potentially waive any extra costs that you may have added to the account because if you add the late payment cost and interest and they pay in three days, do you really want to continue chasing your client for potentially £100 if you’ve just received, say, £5,000? It’s a useful stick to go along with the carrot.

[18:25] Darren: Adam, I don’t think I’ve had to use that. It’s about, in sales I call them touch points, always having an excuse to keep in contact with that customer, “How’s it going? We’ve got three quarters of the way through the build on this side, we’ve done all the user interface side”. Just keep reminding them that you’re there and the invoice is there. Try and keep the relationship on absolute tip top order, and the communication is regular. So to date, and really luckily I think now hearing this, I have never had to use that legislation.

[18:59] Adam: Well it’s one of those things if you can tie it in if you get somebody else to d your credit control on your behalf, if you’re working cheek to jowl with the end client but somebody else is actually chasing the invoices, you as the freelancer can hold your hands up and say “Oh see, I’m really good at what I do but I wouldn’t mess with the good lady that does my accounts…”

[19:21] Darren: She’s hardcore…

[19:23] Adam: “She’s hardcore. Blame her,” say “You know, she’s absolutely on the ball with late payment, so I’d suggest you get that paid fairly shortly and I’ll see if I can get her take it off”.

[19:31] Andy: I know what you mean. I made my self a sort of Heath Robinson robot that sent out email at certain time and that would send an email to people who owed invoice and they were late in paying and at the top of each email it would say in block letters, THIS IS AN AUTOMATICALLY GENERATED EMAIL. And then they’d phone me up and go, “Oh. I already paid that three weeks ago”, because sometimes it would go wrong, and I would say “Oh, I’ll have a word with credit control robot”, so I could blame a third party.

[19:57] Darren: Very good. I think it’s always useful in life to be able to, not pass blame or scape goat, but to have somebody else doing the other task. Yes I’ve always used credit control as the businesses have got to that point and get them doing it. But there’s two ways isn’t there Adam. There’s maintaining a fantastic relationship so the customer has no other way but to pay you precisely on time than muck you about because you’ve done a blindingly good job and you’ve delivered precisely on time. But yes, if things really don’t work out then, I like it, use an alternative person who’s experienced in that area and who can apply the necessary hard words.

[20:41] Adam: The problem that we see here when freelancers come to us and they’ve got large payments that are outstanding, is that they will have been working with someone very closely. They will have grown to almost treat them as a friend when in reality they should never loose sight of the fact that it is strictly a business agreement. And the terms may be 30 days and they could find one invoice is 60 days overdue, the next one is now due. The client will say, “Oh, I’ve got this reason, that reason, my dog’s been run over, my auntie is in hospital. I’ll pay you X now”, which is never more than roughly 10% of what they’re owed, “…give me two weeks, and then I’ll pay you the rest of these invoices that are outstanding”. So the freelancer thinks “Right, OK, so I’ve got X amount, so Y amount will follow shortly”. Two weeks later there’ll be another excuse and then they’ll find out that they’re three invoices down, and that their oldest invoice for 3 months ago has had maybe 10%, 20% paid off, and that’s how easily you can get into a hole with your client if you haven’t got somebody saying to you, or if you’re got hard enough to say to yourself, “I have to cut this client off at X point”.

[21:52] Rob: It’s got to be down at the end of the day that old adage of “He who shouts loudest”…

[21:58] Darren: I mean it’s always useful if you can stop delivering something. If it gets to a point that you’ve got a line in the sand and you can say, “Look. If you haven’t delivered the money on that point I’m going to have to suspend the service”. With software systems online it’s very easy if someone doesn’t deliver payment for a defined period then you can temporarily suspend it, allow access to the whole account, allow them to do a lot of things but allow them not to do other key things. There’s an advantage there. There’s a disadvantage of course for a consultant offering a whole strategy, completely helping a company turn itself around, delivering all of that really detailed and useful knowledge and then they’ve got nothing to leverage have they, really, other than what you were talking about in terms of interest payments and this legislation.

[22:48] Adam: Well yes, if your just delivering your knowhow, potentially if your delivering that to struggling business anyway, the chances are you will want your client to succeed. So if they come to you and say, “Look, I’m a little short this month. Can I pay you 25% and then I’ll pay you the remaining 75% in two weeks, the chances are you’ll look at your client and think “Well, I really want him to succeed. I’ve invested my time thus far in them, and the chances are you will probably let them carry on. So you’ll get 25% of your invoice, and you’ll work for another thirty days, and then you may find that, again, they’re paying you in dribs and drabs. So you have to have a very definite cutoff. We speak to freelancers all the time that have reached a very definite cutoff, an that cut off is that they can’t pay their mortgage this month…

[23:35] Darren: Oh God. That’s serious stuff.

[23:37] Adam: That’s serious stuff. That’s is far too late to actually be acting. If you get to the point where you can’t pay your mortgage, you probably went past the cutoff point 2 or 3 months ago…

[23:48] Rob: Clearly document all of these sub-agreements as well, so that both sides are both very clear as to what they’re entering into going forward. So it does them make that cutoff period that much easier because it is very clearly in writing , this is what we’ve agreed, I can’t continue any more.

[24:06] Adam: Absolutely.

[24:07] Darren: Yes. Exactly. So I think we’re running out of time for part two and again it;s probably blown the minds of the audience in terms of the thinking, “All these things I have to think about”. Don’t worry, we’re going to get the notes written up, transcribing all of this so you go back and look. You can obviously listen to this again and again, and Adam’s kindly written for Credit Safe, for the business for all of the customers they’ve got, a fantastic guide that we’re going to transpose into a Freelance Advisor guide and put it in our brand livery obviously with all the credits going back to Adam and Credit Safe which should prove to be invaluable. There’re some points that you made in there Adam on the interest to be charged and that legislation that I know is there but I personally as a business man have never had to use it so I’m unaware, so that’s when I hope that guide will be really useful for me and for the audience.

[24:56] Adam: Well the guide’s more for your average freelancer that knows exactly what they’re doing in their chosen field but may have little or no knowledge of credit control. So it should provide a useful guide for everything for setting up the account and making sure that you know you’re dealing with at all times. And always remember rule one: a sale is not a sale until the money is in the bank.

[25:18] Andy: Well we’ll have to leave it there. Yet another great discussion. Thanks for listening to Freelance Advisor so it’s goodbye from me, Andy White, it’s goodbye from Darren Fell.

Darren: Goodbye, Andy and thanks very much guys.

Andy: And it’s goodbye from Rob Warlow.

Rob: Yes. Goodbye. Thanks very much.

Andy: And Adam Home.

Adam: Goodbye, thank you.

Andy: We wish you all the best and we’ll see you next time.

If you use Gmail you might be interested to know that Google are working on the problem.

Gmail is great at filtering out spam but today the Google gmail team announced that they will use similar technology to automatically sort your emails by importance.

This cute video explains:

While some may argue complain, once again, that the evil Google is interfering with our lives and meddling with our messages, you’ll be glad to know this is an opt-in service. And, like it’s brilliant spam controls, it appears to work in the background making intelligent guesses based on who is in your contacts list, who you reply to, and which emails you read.

As a technology writer and freelancer I get a lot of email, to a lot of accounts, and I subscribe to literally hundreds of newsletters, services and feeds that come into my inbox. I’ve activated Priority Inbox and now I see messages from clients at the top and newsletter, circulars, BACN and other “offers” below.

I’ve been a huge fan of Gmail for a long, long time — looking at my archives I can see I received my first Gmail in July 2004 and, not coincidently, I sent my last Hotmail that same week — and this new feature looks like it’ll help me manage my mail even more efficiently.

If you don’t use Gmail you’ve probably got very good reasons but if you do then you really need to check out the “Priority Inbox” feature from Google Labs — it’s being rolled out slowly over the next few months (only one of my 6 accounts have it enabled right now).

By Michael Rose Freelance Advisor Editor-in-Chief

Instead of taking a ‘black and white’ approach, resulting in court proceedings or no action at all, they will look to be more pragmatic in seeking agreements with individuals.

Dave Harnett, Permanent Secretary for Tax acknowledged that officials had taken too harsh a line in tax disputes. In an interview with the Financial Times, he said: “’HMRC is packed full of very intelligent people, but we are sometimes too black-and-white about the law.”

The reason for the revision in tax law enforcement is due to a backlog of cases going through the courts. It’s hoped that by being more conciliatory, that ‘logjam’ will be reduced.

With tax issues rarely being straightforward, the promise of a more flexible approach has to be a good thing.

Image by orvalrochefort ~ cc

• Name: Jim Callender
• What do you do?: Run a web design and development company based in Brighton and London
• URL: www.callendercreates.com
• Twitter: @jimcallender

How (or where) do you find work?

Google (and other search engines), repeat work, networking and personal recommendations from colleagues. Recommendations increasingly account for the work I get.

Do you separate your work from your social life?

This is essential for my well-being and my family!

In the early days I used to work in the lounge of a small apartment, and even during social time, the computer was always looking at me which made me always think about work. The best way for a good work/life balance is to make a note of the hours you keep, find out what routine works best for you, and stick to a routine, ie: 8am-4pm, 10am-6pm. This way you do not burn out and you also set yourself realistic targets to get things done in this daily schedule. Of course you have to work outside these hours, but there is a point where you do not become productive anymore, especially if you are still at the computer at 2am.

If you place emphasis on your social life, you can treat yourself by taking an afternoon off mountain biking, or shopping. The work/life balance is only something that you will find by experimenting where and when you work. However, don’t feel guilty if you are not working, as you have probably earned a break, and that’s what freelancing is all about! You can often think of the best ideas when relaxing and away from the office. If you have a problem with a project, your wandering mind will often find the solution. Although it’s hard to leave the office when working under a deadline, often it can make you more focused and productive when you return, even if it’s only a walk round the block.

Where do you work (what’s good/bad about your workplace)?

Now I have the luxury of some fantastic co-working spaces in Brighton and London. Something which was not available at such a cost-effective price 5-years ago. I also have a room at home which is solely for office use. Having three workplaces allows me to create a varied schedule each week, 3 days in Brighton and 2 days in London. I always aim to line up 2 meetings per week in London, whether this is with suppliers, colleagues or new leads. This is working well so far, and is increasing the coverage and exposure for my company.

What’s your least favourite thing about freelancing?

Not much. I love being my own boss, and I could never go back to full-time monotony. When you start out you have to do boring stuff like form your own company, learn about accounts and taxes, but once you have found a good accountant then this is done by them every year. Also the income is very variable, not so good at the moment if you want to get a mortgage. However, if you can live without the certainty of a salary then you’ll survive.

What’s your favourite thing(s) about freelancing?

If you are like me, and are always coming up with ideas, you’ll find having the freedom to drive them forward without anyone questioning them is a great luxury. Being innovative in my free time allows me to develop my range of skills and often leads to new services that I can offer my clients. Meeting with other freelancers and learning what they are doing or have experienced, good or bad. It’s the only way to discover that you are not alone, and allows you to broaden your real-life network. Being able to control your destiny — by being a small company we can move quickly with a new product for example, change our working methods to suit clients without much fuss, when compared to a larger agency.

How do you organise yourself?

There are a number of methods I have used for to do lists. I use Google calendar for all my work and life events. My work calendar sends me an SMS message as a reminder. There are lots of cloud-based services on the web — which means you can access them on any computer with net access. I also have a moleskin notebook which I use to jot ideas if I’m on a plane or train.

More at: “Our 5 favourite online applications”

Why do your clients choose you?

I offer easy to use web applications at a lower cost to larger agencies. Ultimately for the client, it’s down to whether they get on with you, can trust you, and usually clients out of London prefer a local service provider, so distance is a factor.

Have you ever considered going back to a permanent job?

No, the nearest I come to employment is the contracting I do every now and then. But I have not done this since 2007, since client work for Callender Creates has expanded.

If you could give a friend one great piece of freelance advice, what would it be?

Don’t worry too much about where the next project is coming from. Be honest, be realistic, and be reliable.

Interview by freelance copywriter Leif Kendall

Get paid to author screencasts

The easiest way to make money through screencasting is to offer new tutorial screencasts to a website that specialises in this area. The following three examples have been established for years. You’ll need to be able to demonstrate that you’re able to teach using screencasts so you’ll have to have some experience with production already.

Lynda.com

Lynda.com is the granddaddy of screencast based e-learning sites. Experts are invited to record a mix of screencasts and videos to teach topics related to web development.

Lynda are known to treat their authors well – they’ll fly you out, put you up, help you with the scripting and manage all of the recording and production. You get a set fee and a slice of the monthly income.

Brighton-based Papervision expert Seb Lee-Delisle is an author, he was flown out to the USA earlier in the year.

Net Tuts

Net Tuts offer tutorials for web developers, they invite new authors to submit screencast or written tutorials for which they’ll pay a license fee.

Net Tuts will be easier to work with if you’re not yet known as an expert and you can do all your recording from your own home.

ShowMeDo

I co-founded ShowMeDo in 2005, it hosts a large set of screencasts which teach open-source software. Many of the authors create free screencasts, some of the experienced authors are paid to contribute to the paying-members Club.

If you’re interested in being paid to teach open source software then get in contact with the site – you’ll need to demonstrate your knowledge via some existing open source screencasts.

Selling your own screencasts

It is quite believeable that you’ll build a hobby site which uses screencasting that you can turn into an income generator once it becomes popular. The examples below for ScreencastsOnline and PeepCode should make this clear and the Micropreneur Academy example builds on the idea to create a niche and very profitable tutorial site augmented by screencasts.

Payments and hosting

Payment gateways like PayPal and Google Checkout make taking money easy for most of your potential buyers (i.e. those in the West who can deal in Dollars, Pounds and Euros). Products can very easily be delivered via E-junkie – you upload your product and they handle the purchase process and deliver the goods.

If you want to host a membership system then that’s a little more complicated – but only a little. WordPress has a set of membership extensions that allow you to setup paying-members sections, Drupal and the like will have similar extensions.

Private hosting for screencasts is offered through screencast.com and if you just want to treat the screencasts as files then commodity hosting like Amazon EC2 is hard to beat.

ScreencastOnline’s Mac screencasts

Don McAllister’s ScreencastsOnline has been teaching Macintosh skills since 2005. Don’s videos are released for free in a low resolution format with high resolution versions available to subscribing members. Don turned his hobby into a full time business several years ago.

Peepcode’s programming screencasts

Geoffrey Grosenbach started Peepcode in 2006 to teach Ruby and Rails programming via 30-60 minute screencasts. His business has expanded and now he produces content with a group of authors, mostly still around Ruby. Given that I was building ShowMeDo at the same time it was fascinating watching Geoffrey build his niche tutorial site into a profitable business.

If you want to replicate Geoffrey’s success then pick your domain, get recording and start selling the videos via a payment gateway like PayPal. The barriers to entry for this sort of business are terribly low – finding your audience is likely to be the hardest challenge.

Micropreneur Academy’s supporting screencasts

Rob Walling of the Micropreneur Academy offers many tutorials to teach the art of business building. A subset of his tutorials have walk-throughs using screencasts – topics like learning to research Google AdWords are best explained visually. Rob’s tutorials run for 3 to 20 minutes each.

Rob’s use of screencasts adds a great amount to his body of tutorial content – some topics just aren’t easily taught via long documents. If you have a tutorial site in mind, do include rich screencast tutorials as they will increase the value of your site.

Monetizing free screencasts for passive income

You can join advertising programmes or sell products through affiliate links to earn a passive income from your screencasts. You’ll need to be producing videos that are watched by a lot of people (preferably you’ll have over several thousand views per video per month). If this is the case then a passive income stream can generate a useful side income (and maybe a useful chunk of a salary too).

YouTube

In 2009 YouTube started to invite creators into their AdSense advertising programme. Ironically my AdblockPlus screencast was invited into their ad programme (I declined!) due to its consistently high viewing figures.

YouTube now offer a Partners programme, anyone can join and through it you’re indicating that you’re open to receiving income from ads on your videos. Their programme now offers a rental plan too – if you’re thinking of renting access to a set of tutorials then this is something to keep your eye on.

Remember that ads in general only earn useful money if they get a lot of views – if your content is niche with a small viewership (i.e. less than a few thousand views a month) then your chance of earning any useful money from the programme is tiny. If you already have a Google AdSense account then you probably have an idea of the income that could be generated.

Cross selling affiliate products

If you control the site that hosts your screencasts and you’re a member of an affiliate programme like Amazon Affiliates then you can add relevant products to your description. If the user has benefited from the screencast then a link to a relevant book or software package should also be useful. Affiliate sales will provide a low but consistent income if you have good viewing numbers for your screencasts.

Learn to screencast with The Screencasting Handbook

I’m the author of The Screencasting Handbook, the 128 page PDF is packed with 4 years of my own professional experience from building ShowMeDo and ProCasts. The goal is to lay out everything you need to quickly and confidently plan, record, produce and distribute your own screencasts. The Handbook is aimed at freelancers, teachers and marketing professionals covering both quick videos and in-depth productions.

Visit the blog to find a lot of tips and links to useful software. An added bonus of the Handbook is the free Screencasting Google Group — over 130 screencasters are a member of this Group. Feel free to join and ask questions, we’re all happy to help you move forwards.

By Ian Ozsvald — author of The Screencasting Handbook

Read all three parts of the screencasting guide

123 Reg, LCN and Fasthosts are all good businesses to use for this reason.

If you buy the domain name yourself, resist the urge to buy web hosting or email services at the same time, even if the deal on offer looks like a steal. Instead let this be something your web developer takes care of for you. They will be in a better position to work out what you need and then they can edit the DNS of your domain to point to the services they provide.

Your web developer may offer to buy or register your chosen domain name on your behalf. If they do make sure to ask them that they add you or your company as the registrant. This is something they can do without it affecting their ability to manage your domain. So don’t let them tell you otherwise!

If someone has brought a domain name on your behalf you should check that you or your company are named as the registrant. You can find this out by going to a site like www.who.is and seeing if you are listed by typing in your domain name. It doesn’t matter so much if you don’t manage the administration of your domain, but if you’re not listed as the registrant, then should you ever want to try and move management of that domain elsewhere you’re starting at a disadvantage.

Finally, if your web developer suggests you use their own hosting or recommends a hosting package, don’t equate this to a financial advisor trying to sell you the products they recommend just to get their hands on the commission. Most web developers make next to nothing on hosting, even if th ey seem pricier. It’s largely impossible for your developer to compete with the volume sellers and hosting won’t be their core business. It’s more likely that, if they recommend a host, it’s because they are comfortable with and have evaluated their services and they know that to deploy your website on the host once it is built will save them time. Which should save you money.

By Internet Consultant Alick Mighall

Image by jef safi ~ cc

A number of people have also taken the opportunity to argue for the repeal of IR35 due to its ineffectiveness in raising tax revenues.

The time has now passed for drawing up your own ideas for the Spending Challenge, but you can now vote for those you like best. The most popular suggestions will be reviewed and those with the most potential will be ‘investigated in further detail.’

The deadline is August 31, so if you’re a freelancer or contractor who’s passionately opposed to IR35 then now might be a good time to let your feelings known.

Of course, the Government is already reviewing the legislation, so it can be argued that the vote would be moot. Still, it can’t be a bad idea to keep the momentum going…

There’s a number of IR35 scrapping suggestion on this link.

Screencasts give people confidence in your skills:

You’ve probably watched short tips and tricks video in blogs. These videos are very easy to make and they give your viewer confidence that you know your subject.

These videos are an easy way to get potential clients to contact you — if the client has difficulties and they can see that you really know what you’re doing (as opposed to people who just say they know what they’re doing) then they’re more likely to send you a question which begins a dialogue.

Making a tip video

The most important point with this kind of video is that you just get on and do it. Don’t worry about crafting a perfect recording — tips can be a bit rough and ready (and you’ll improve with experience) — lots of tips are worth more to you than a few perfectly produced videos.

Give the post a good title, put the video somewhere public like YouTube and then write a good description so Google has lots of keywords to read to add to its search engine. Finally — submit the post to the social news sites you read to win some instant traffic.

Building a whole series of tutorials and tips

One step on from here is to build an entire tutorial series — Remy Sharp’s excellent JQueryForDesigners site is packed with tutorial screencasts and through the site he’s built an impressive audience.

By themselves these videos are great marketing material and you’ll build a set of eager followers who will publicise your videos. More importantly when one of the viewers is asked for a recommendation by their client they can confidently point at your site as say that “this freelancer really knows their stuff”.

Proving what you can offer

A final an even more impressive type of video is one that shows direct proof of your skills. Imagine you worked with Search Engine Optimisation — a “before and after” video showing the improved ranking and traffic that you delivered would be a very impressive testament to your skills.

If you post this sort of video and link to your other tips you’ll be showing your reader that you can do it — and so can they (and if they need a professional — you’re their first point of contact!).

Why screencasts help sell products and services:

You’ll have noticed the rise of demo screencasts on product homepages which give you a quick tour of the product (in face this is what my last company ProCasts specialised in!). Intuitively we know that it is better to show rather than tell — with desktop screencasting tools you can create demo videos for your own products and your clients’.

Aral Balkan has some lovely demo videos (e.g. for Feathers). With a prepared script, an editor and some background music he quickly gets the point of his applications across to a viewer — there’s no reason why you couldn’t produce similar demo and training videos for your clients.

Tools like MockupScreens are best demonstrated with a video — take a look at the 3 minute tour on the homepage and you’ll understand all that’s on offer by the end of the video even though you’ve done no other research.

The main reason these videos work is because:

• There’s visual proof that the application works — it isn’t vapourware!
• It is clear whether the application does something that’s useful for you
• The speaker is confident and sounds trustworthy — this gives us confidence to keep watching and learning more

Work-in-progress videos are great for building trust with your followers

Do you have any side projects that aren’t finished yet, so can’t be presented as a complete project? Why not give a work-in-progress demo of what you’ve achieved so far?

I use this approach for my artificial intelligence projects (e.g. my robot head and English Heritage plaque machine vision project).

These projects won’t be finished for a while but I can show my followers new ideas and techniques — in turn they keep following because they expect to get cutting edge ideas from me.

Making a work in progress video is super-easy — you just record 1-3 minutes as if you were giving a demo to a friend. You’ll demonstrate that you’re at the cutting edge and build a larger following — and if the topics are particularly interesting then you’ll win flurries of traffic from sites like Twitter.

Distribution

In the (previous post) we looked at some of the tools you can use to make a screencast. Having produced the screencast you now need to distribute it — you want to get the widest selection of viewers as possible.

Make sure that your video contains references to your main site — if the viewer finds your YouTube video embedded in somebody else’s site then they’ll need to easily figure out how to find your main site. Add your logo and URL to a title screen, you can add a closing title to the video with the same links and your voice-over can sign off by inviting the viewer to visit your site.

Some of the obvious upload sites are listed at the end of my screencasting software page. Three relevant sites are:

• YouTube which offers the widest general audience
• Vimeo which offers the second widest general audience
• ShowMeDo which offers a niche but very active audience of Open Source learners

Always use at least YouTube — it is very easy for a viewer to embed the video into their site which keeps on giving you exposure to people you’d otherwise not reach.

Video licenses and length:

You need to add a license to your video — some people get very worried about infringing on other people’s works and won’t embed your video unless it is clearly allowed. I’d suggest using the most permissive Creative Commons license that you’re comfortable with — generally I use CC:By which allows commercial use and always requires that I get credit (so the viewers know where to come to find me).

The length of the video is simple — keep it as short as possible! Nobody likes to wait through waffle, “ums” and “errs”. Practice the demo if you have time and keep it to 1-3 minutes (the shorter the better).

Getting started quickly with The Screencasting Handbook

I’m the author of The Screencasting Handbook, the 128 page PDF is packed with 4 years of my own professional experience from building ShowMeDo and ProCasts.

The goal is to lay out everything you need to quickly and confidently plan, record, produce and distribute your own screencasts. The Handbook is aimed at freelancers, teachers and marketing professionals covering both quick videos and in-depth productions. Visit the blog to find a lot of tips and links to useful software

An added bonus of the Handbook is the free Screencasting Google Group — over 130 screencasters are a member of this Group. Feel free to join and ask questions, we’re all happy to help you move forwards.

By Ian Ozsvald — author of The Screencasting Handbook

This cheeky little site has a different view…

HowtoUseTwitterforMarketingandPR.com

While the message is clear, and seemingly contradictory to all our advice on the subject, I can’t help but agree with the sentiment:

The “don’t” means:

• Don’t just talk about your product all the time
• Don’t just talk about yourself all the time
• Don’t just tweet links to your site all the time
• Don’t spam people, ever.

Doing any of the above is like being the bore at the party… talking loudly about you, yourself and your business… and shouting at the guests with a megaphone.

Try turning the megaphone around and, with those four simple rules in place, I think you should go right ahead and use Twitter for Marketing and PR purposes.

Here is my round up of the the most ergonomic beds currently on the market. From toppers to top-of-the range, if you’re looking for a better bed start right here.

The Posturite Memory 2000 Topper

This clever bed promises to give ‘nocturnal relief to your aching back, joints and muscles.’

It works by responding to the body’s temperature and weight thereby giving you a custom moulded sleeping experience.

• Best for: the contractor who wants optimum comfort without an extortionate price.
• Price: Single £135 Double £155
• More info: Posturite

The Severn

What’s not to like about The Severn? This adjustable bed has a memory foam mattress, with the option of soft, medium or firm depending on your preference. It also has an inbuilt massage system and best of all… it is fitted with a remote controlled flat screen television that can folded away in the foot board.

• Best for: the stressed out freelancer who who needs help to unwind in the evening. If the combination of a feel-good film and massage can’t help, what can?.
• Price: Unknown
• More info: Regency’s Miracle Beds

Jensen Supreme Dynamique Adjustable Bed

The Jensen’s have a belief that ‘even the best can be made better’ and so they’ve sought to prove that fact with this bed which allows you to remotely operate the head and foot end. A climate control system means that heat can be extracted from the mattress. It also has a function which allows you to set a ‘massage alarm.’ It sure beats Wake Up Boo blaring out first thing.

• Best for: the accident prone freelancer (Infrared sensors make it impossible to get trapped in the mechanism).
• Price: £6899
• More info: AbsoluteBeds.co.uk

Napshell

The Napshell was apparently developed as a result of extensive studies into the human body. The findings enabled the creators to design a mattress suited to any body type. The shell itself has been created to provide the best possible visual and acoustic effects for relaxation purposes (it has lovely lights and speakers). The Napshell has been developed specifically for power-napping.

• Best for: the contractor who currently sleeps on a mattress of money.
• Price: A lot
• More info: Napshel

Feel Seating System Deluxe

This may not be a bed in the traditional sense, after all it consists of 120 interconnected soft balls, but I’m sure you could fall asleep on it. The theory is that these balls can adapt to your emotional state. If you’re angry, it will calm you; if you’re sad, it will comfort you; if you’re happy, it will let you thrive in a joyous state.

• Best for: the freelancer who’s a bit kar-ray-zeee.
• Price: $4,200
• More info: Animicausa.com

Squaring Bed

This Italian-designed Japanese-style bed features two low cushioned benches for sitting, lounging or placing your laptop. There are no boasts of ergonomic performance, just a general message of ‘don’t I look stylish.’ Which it certainly does.

• Best for: freelancers who like to work from bed.
• Price: $12,000
• More info: Bonaldo

Magnetic Floating Bed

This is as it appears. A bed that floats in the air thanks to the power of magnets. The four corners of the bed can be chained to the wall just in case a gust of wind comes through the window and blows you and the bed around the room, smashing you into the walls and furniture.

• Best for: freelancers with megalomaniac pretensions.
• Price: $1.53m
• More info: Universe Architecture

Private Cloud (Rocking Bed)

This bed rocks. Literally. This is a great bed for anyone who doesn’t suffer from motion sickness, gently rocking you to sleep after a tough day at the office.

• Best for: the veteran contractor who wants to complement their rocking chair.
• Price: A mystery.
• More info: Manuel Kloker

• Steps we should take before giving credit.
• Steps to take before payment is due.

Listen to the podcast:

Transcript

Andy: Welcome to Freelance Advisor brought to you by Crunch, ridiculously easy accounting. This is episode 25 the first part of a two part mini series on Credit Control. I’m Andy White. I have with me Darren Fell, founder of Crunch.co.uk.

Darren: Hi, Andy.

Andy: I have on the line Rob Warlow from Business Loan Services and author of Loan Sharp, get the business finance you need. Hello Rob.

Rob: Hi, Andy. Hi, Darren.

Andy: And I have also on the line Adam Home, operations manager at Credit Safe LTD, a family credit recovery agency. Hello Adam.

Adam: Good afternoon gentlemen.

[00:38] Andy: Credit control of course a big concern to us all but it’s not just credit control it’s debt collection especially in the current economic climate. What are your thoughts Darren?

Darren: Well exactly I think we’ve been wanting to do this for so long to help all of the freelancers, the contractors, the small businesses out there that are, unfortunately, regularly, pardon my French, screwed over by the bigger businesses because they think they can. This is completely unfair and the whole purpose of this podcast, that I’ve been wanting to do for so long is to help you out there in the right credit control processes, how to make sure the customer pays on time, how to make sure that they are a good customer and they probably will pay on time. All of the key areas in credit control which Rob is exceptionally expert at and then, when you’ve done all those processes perfectly unfortunately there still will be a customer or two that thinks they might be able to get away with it, they may be able to screw you over and not pay you the final amount, or even the whole amount. And that’s where Adam comes in from Credit Safe, debt collection done properly.

All of this podcast we’re going to divide into two parts, there’s going to be so much useful information in here for you. I want you to listen to it and hopefully listen to it again, both parts. Get your business in perfect shape and if there are any issues, you know exactly what to do in terms of debt collection. It’s not a nice part of life but it means getting that cash back rightfully where it should be; you’ve done a good job, get the money for it. So that’s the whole premiss of this two part podcast is to genuinely help in what I see is a critical area particularly with the economy. I think we’re actually looking at a massive increase, they reckon, in insolvencies out there. So it’s how to protect yourself against that, and how to recover that money. So we’ve got some top notch experts online here to help with those questions.

[02:38] Andy: So a quick introduction. Rob Warlow runs Business Loan Services which is a support service for businesses looking to raise finance or having relationship problems with their banks. Rob was in the banking industry for 25 years and the last 11 years were in senior positions in banks in East Africa.

Adam Home is Operations Manager and Credit Controller at Credit Safe Ltd. He is responsible for UK based collections and new media solutions. He has been collecting overdue accounts at Credit Safe LTD for the past 10 years.

So guys thanks for joining us perhaps we can break this part into couple of separate headings if you like. Perhaps the first one is steps we should take before giving credit and also we can take a look at steps to take before payment is due. Rob, would you like to get the ball rolling I know you’ve got some thoughts on steps freelancers should take before giving out credit?

[03:24] Rob: Yes certainly as Andy said it’s a major problem and if you look at many business failures we normally think it’s through lack of customers, or poor profitability. But the main reason for business failures is really lack of cash flow. You can push out as much sales as you want but until you’ve actually got the cash in the bank that’s when you’ve really got your business safe. Without it, you’ve got nothing. So I think the first thing that any business owner, or freelancers as well, need to do before giving out credit is to go back to the basics. Can you afford to give out credit? You may be forced to give credit terms out because that’s the nature of the competition in your market, you have to do that. But, if you can look at trying to get up-front payments of a certain percentage before you even start the contract to cover some of your basic costs that’s obviously the better position to be in. But if you are forced to give credit terms just to beat the competition what you really have to look at is to try and consider what the impact on your cash flow position’s going to be. Do you have the cash capacity to be able to deliver service and them having to wait one, two months or three months. So it’s really taking a good look at your position and assessing whether you can actually do this.

If you’ve got no option and you think you’ve got the cash kind of there, but you’ve looked at the position and you think it’s a bit tight, the next thing to do is making sure you’ve got that support in place and go and speak to the bank to make sure you can get an overdraft facility to provide some cushion there in case payments get delayed. The other thing to do as well is to really do your research right about who you’re actually providing credit terms to. You’ve got to remember that effectively you’re stepping in the shoes of the banker here. You’re becoming a banker to your clients, you’re providing them with credit terms, so you’re giving them an overdraft facility in a sense. So you’ve really got to make sure that you do your research right in the beginning. Can you trust these people? So the best way is to go out and weed the weaker payers out as best you can. That’s all about doing research. There’s a number of ways you can go online and check on the credit worthiness of your customers and sign up to some services, put your customers name in and just do a check on other people’s experience is of dealing with that company and just get that credit report, see what it says. A least then, in confidence, you can get out there and give your terms. And then it’s all about keeping up to date. I was talking to a business owner this week who just got hit by a £2,000 debt. The company went under, but he’d only delivered his services three weeks ago. His terms of trade are one month’s credit so he was well within terms but the company went bust so he lost two grand. I think the lesson there for him was to look at the sector; his client was in the transport sector. Now the transport sector, retail, hotels and restaurants, all of these are suffering really badly. So if you know you are dealing with an industry that is facing tough times, pay particular attention to the services you’re providing to those companies. And then when you’re doing the contract make sure that the rules are very clear. Exactly when invoices are going to be out, when you expect payment. So I think these are some of the things you can immediately take.

[06:58] Darren: Rob all very good points. What I’ve been telling freelancers and contractors for years is to test the customer. A brand new customer, you do a project, it’s all outlined, there’s no reason on earth you couldn’t ask for 50% up front to prove it. Now if the customer completely balks at that, then it’s a negotiation. If they completely balk at paying anything up front, my advice is can you really trust that customer. So it’s all the things you’re saying, the testing part of the process is completely fair for a small business. To actually say I need to prove this, I need to have money on account for me to be able to work, because I don’t have a significant cash flow, I don’t have a lot of team members bringing in lots of other cash, it’s just me. So what are your thoughts on that?

[07:44] Rob: Absolutely. That’s how I operate my business I essentially freelance myself out, it is money up front. The problem with being a freelancer, you’re not providing tangible good and services in many cases. It’s just yourself, it’s your knowledge and your hours if you like. So it isn’t like a traditional manufacturer where you can have a retention of title clause on some goods, and if the company goes under you get your goods back. Once you’ve invested your time that’s it you can’t get that time back. So freelancers particularly are at a disadvantage. So absolutely, if your background and CV hasn’t proven itself to the individuals and you’re feeling that they’re not playing ball yet, back away, because in this day and age you cannot risk investing your time and effort for no reward at the end of the day. So yes, certainly push for a minimum of 50% up front, absolutely.

[08:35] Darren: OK that’s really interesting to hear; that’s something I’ve been saying for years. Just as a business expert having done it for years and seeing people that haven’t paid very well. I want to see freelancers not get caught in that situation. So to hear it from a banking professional, 50% in that first stage in a relationship with a customer is rally good to hear. If they balk at it just walk away.

[08:58] Rob: Absolutely it’s not worth taking the risk. There’s always this dilemma. People are desperate for business, they may want to get into a company. But when your very early on in the relationship there has to be an element of negotiation to ensure that both sides are protected. You can understand why the other party wouldn’t want to pay you 100% up front, but here has to be a middle ground, in order to give you some leverage and some comfort that at least you’ve covered some of your basic costs if the whole thing does go terribly wrong.

[09:25] Andy: Rob you also mentioned about having a good relationship with your bank. How do you garner a good relationship with your bank and are banks being sympathetic at the moment?

[09:34] Rob: Well. How long have we got on this program…

Andy: I thought this might lead to a long answer.

Darren: Oh, Andy why did you ask that one?!

Andy: It had to be asked.

[09:41] Rob: It’s difficult for freelancers in particular because bankers find what freelancers do almost difficult to grasp. With 25 years as a practicing banker when you visit a clients premises and you see things around you, that gives you a sense of comfort. But in the freelance market it’s so difficult. So it’s really trying to get the bank to understand what you’re about. At the freelance end of the market we’re not talking big sums of money here, particularly if you’re a one man band. So you rally get stuck into the “computer says no” syndrome in that decisions are really credit score driven, and so the element of relationship is with a microchip as opposed to an individual as a bank manager so it is difficult.

[10:27] Darren: I think the key point there having experienced my last business Pure 360 and getting to a turnover of 1.3 million, a really great net profit. And we still, just for an overdraft of £25,000, had to personally guarantee that – all three directors. So I think if any freelancer or contractor needs an overdraft it would naturally fall into a personal guarantee, a PG scenario. So really to the bank it doesn’t matter because you’re personally guaranteeing that money if your business goes down.

Rob: Yes. Just trading through a limited company doesn’t get away. Personal guarantees are de facto, they are there, you have to accept that fact. Especially at the smaller end and even businesses that are turning over a million plus, you’ve got to remember that banks are lending to you as an individual, they’re not lending to the business as an entity on it’s own. It’s you who drive the business and you who’re going to make it a success or a failure. And so the banker’s definitely going to be wanting to tie you in, to make sure that you make every effort to make sure that debt is paid back.

[11:31] Darren: The next thing I wanted to pick up in terms of credit control, just getting back to real basics here, is the term. I obviously work with a lot of freelancers and I get invoices come in with seven days on them and I think “I understand your position guys”, but in reality business will naturally work off a thirty day credit term, that’s standard, and any accounts department will almost completely look past seven or fourteen days. So if we go back to my original question – the whole discussion around getting monies up front, then you shouldn’t need to put abnormal credit terms like seven days which the business is just going to raise their eyebrows at and ignore anyway. So what are your thoughts on actual credit terms itself?

[12:18] Rob: Yes, as you say most terms do naturally default to 30 days, 7 days is really not going to work. By the time you’ve billed and the accounts department get around to it the seven days will have disappeared anyway. It also sends out a bit of a strange signal as what you’re about as a business. You don’t want the other party to think that you are strapped for cash and you’re trying to pull in as quick as you can. So again, there is this fine balancing act of trying to be professional but at the same time making sure that the terms work in your favour. It is down to negotiation, looking at what the underlying contract itself is. If there is a very big time commitment and you’re having to outsource elements of the contract as well, sit down with the third party, work it through and see if you could come at fifteen days or something like that. But just tread carefully on that, as you say, thirty days is really standard.

[13:10] Darren: Sure so if you have other suppliers then it goes to get the up front payment you need personally for your own business and then monies to cover any down payments for any other freelancers or contractors or hardware that you’re purchasing. You’re getting it up front. I’ve seen some disaster stories of companies that have gone in head first into fantastic projects, not got any up front payment. Are personally putting down ten thousand pounds if not more on some coding that they need to get one of their other freelancers to do, or some other hardware. And they’re not gathering any of that money, any of the true cost of the project up front. This is open to a disaster zone.

[13:52] Adam: You have to remember as well, Darren, a lot of freelancers are going to be really passionate about the work they’re conducting. If they get a very nice contract, and it’s work they’re excited to be doing, they can very easily forget the background stuff that needs to be done to properly prepare themselves to enter into that contract. They can so excited to get their teeth into the nitty gritty that they completely forget all about such small things as payments and terms and contracts.

[14:20] Rob: You’re right, many business owners start in business because of the skill set that you have and the way you deliver services, your product, or whatever. Nobody wakes up and says “Oh I’m good at managing cash flow, I’m going to start a business”. Nobody has that sort of skill, it doesn’t work that way.

[14:36] Darren: Absolutely. I sat with this Business Link guy yesterday and he was instilling on me on how many small businesses he sat with trying to get that cash flow sorted out to make them understand. And it’s obviously in Excel spreadsheets and people find it very painful. There is, and exists today, many pieces of software in accounting for small businesses, some painful and some easy to use, Now I would be saying this but this isn’t a salesy podcast, but there are many pieces of software that will show you, as long as you religiously enter in all of your invoices, all of your expenses, and you’ve got the credit terms running in there, it will show you all the amounts overdue when it hits there. The other thing I was going to say which I learned from a fantastic credit controller back in the last business, is that she used to call seven days before that thirty day period was expired. So she’d be calling prior to the thirty days being hit to warn them they needed to pay and that worked a treat. So the two things I’m putting forward there is, you can have a bit of software if you invest a bit of time initially in there, you can see exactly where the overdue amounts are becoming due and what you need to chase. And if you employ the classic little tricks that credit controllers that have been doing for donkeys years use, literally calling seven or ten days before it’s due, just a reminder, a nice friendly reminder, can pay dividends.

[16:03] Andy: What about prompt payment discounts I know Adam you had some on this didn’t you.

[16:08] Adam: I did. Something that we would encourage freelancers to start to get into the habit of doing, some freelancers can be concerned because it puts the quoted price up slightly, but you can always offer a 5% discount if paid within a certain period after the invoice is due. So you could potentially take off 5% from your quote if its paid on time and often if you’re dealing with invoices that are worth thousands of pounds at a go, 5% is a nice incentive for your client to actually pay you promptly. If it help you to get the money in on time then 5% can be a small cost to pay to pay you promptly.

[16:48] Darren: I really like that idea Adam. That’s the sort of thing that’s employed by the big boys isn’t it in fact I think they’re doing in reverse aren’t they? Like Boots allowing themselves to pay the suppliers early but on doing so they give a discount which is playing to their powerful position. I think that’s slightly unfair in the case of the big corporates. For a freelancer employing those tactics the other way round, I think it’s a fantastic idea to draw in the cash. It’s that careful balance though isn’t it to appear to not to be needy or that you’re running right on the edge on the business. I think you’ve got be very careful with that balance because if they start having any sniff that you’re business is going to go down then they probably might not pay.

[17:34] Adam: Absolutely if later on when you’re actually chasing the overdue invoices, even if you desperately need the money, never ever tell the end client that you need the money because there are people out there who will sit on your payment until such time as you cease to trade or the liquidators or receivers are called in. And then they’ll just argue with the liquidators or receivers, because they won’t have all the information that the client would have had regarding the payments. So there are people out there where the freelancer really needs the money for X, Y and Z, and the end client will completely shut down and refuse to answer any correspondence, refuse to answer the telephone and sit on thousands of pounds that rightfully belong to a freelancer, in the hope that they go pop and they can keep the money.

[18:17] Rob: It’s also a mindset issue as well, many business owners once the invoice has gone out are almost embarrassed to chase, because it’s not their thing, they didn’t come into into business to bill people and then expect to chase them. It’s picking up on Adam’s point really, it’s more about consistently chasing. Don’t just suddenly appear at the very last minute because it smacks of desperation. I also advocate the idea of ringing five or ten days before the invoice is due. In many cases I’ve heard of people who say “We lost the invoice could you send me another?”…

[18:54] Darren: That old chestnut!

Rob: …about 10 days after it was due and we’re into the whole process again. So be warming them up and reminding them that you’re five days away from the due date and a very regimented series of phone calls thereafter. But getting into the mindset of not being embarrassed about asking for your own money. I was with a business owner earlier this week who’s exactly got into that position, owed £40,000, it wasn’t a train crash for him, but has just fallen out of the habit. So pick up the phone. Sometimes it’s just a case of reframing what it is. It’s a case of sometimes saying that £40,000 or £50,000 whatever, what could it do for you? What would you be able to do with that money if you had it in your bank account today? Suddenly you say I could do this with it and there’s your motivation for picking up the phone and getting that money in

[19:48] Darren: Rob you bring up a classic, the old chestnut, “We’ve lost the invoice”. I absolutely hate that, that really gets to me, so going back to online software to help. What you can do, there’s a few of them out there, and it employs the same technology that we did in the email marketing company Pure 360 that I put together, you can show when that end person has opened and downloaded that invoice. Now this is classic. You create the invoice online, you press the button, it flies into their inbox, you can see exactly the time and date that they opened it. The the next thing is the chasing, love the chasing before the thirty day period, you set an alarm. So it comes up on your screen, it forces you into that process of picking up the phone and going “Hi John how you doing. Just checking and letting you know that our invoice that you downloaded 10:29 back on the thirtieth of the month when I sent it to you, that you’re going to pay it in ten days time. Is there any issues with the work I’ve delivered at all?”. In the nicest way, without it being cheesy I think it can work.

[20:57] Adam: Thats precisely what you should be asking in any call made to your client before the invoice is due, (a) have you received it, and (b) are there any issues that are going to delay payment? Because if you can find out there’s an issue with the work that you’ve done or the software or what have you, prior to the invoice due date, that gives you an opportunity to solve any queries before you’re expecting the money to arrive – which can be key. You’d be surprised by the amount of freelancers who will let invoices go thirty days overdue, and when they do finally get around to calling, suddenly the end client has a litany of complaints that the freelancer was completely unaware of until they made that call.

[21:38] Andy: I’m just interested in the idea of your payment terms superseding any purchasers payment terms. Adam you’ve got some thoughts on that?

[21:44] Adam: Yes. What you have to ensure is that your payments terms are the very last link in the order chain that’s come through. so you’ve got to make sure that your payment terms, whatever they are, supersede any purchasing terms that your client may be trying to force onto you essentially. I’ve seen payment terms from purchasers that say payment will be made in 365 days….

[22:10] Darren: Oh, of course. This goes back to what I was saying with the Boots example where they offered to pay their suppliers slightly earlier but for a discount and they had made the purchasing terms something stupid like 120 days or 180 days. They suddenly employed this right across the board and their suppliers were up in arms and they were giving a press release saying “But we offer them a discount if we pay them earlier”. So that’s a really good point, purchasing terms can supersede your own terms.

[22:41] Adam: They can. I’ve only seen one set of terms with 365 days on, and I don’t think they ended up being legal at the end of the day but it is something to watch out for.

[22:50] Darren: Adam can you tell us how does a customer instill their purchasing terms over and above you invoice purchasing terms? Does that mean to say you’ve signed a procurement document with them that supersedes your invoice credit terms?

[23:05] Adam: The easiest way to do it is to have a clause in your own payment terms that states any deviation from your payment terms must be agreed by both parties in writing. So my payment terms are X, however any other any other payment terms must be agreed in writing by both parties. So even if you then take on a contract that’s got their terms in place if you haven’t agreed them in writing with them, you can’t be held to them. That’s generally the easiest way but sometimes you can find them buried in contracts – you’ll suddenly find a piece that related their their purchasing terms, and they won’t have advised you about them beforehand. So it’s just a case of keeping a very close eye on any document that you’re requested to sign by the client.

[23:46] Darren: Good. Absolutely brilliant. Now Adam, do you have any examples of clauses that the audience should put into their invoices just to make sure they’ve got it absolutely rock solid. I know that you’ve written a fantastic guide on debt collection and all the steps and processes, all the things to think about before, all the descriptions of things and we’re going to put that into a Freelance Advisor guide. Is there within that these clauses that can be inserted into the invoices for the freelancers and small businesses out there?

[24:17] Adam: The problem with terms and conditions is, in the worst case scenario, you are very likely to be relying on them in court to get paid. As such we generally here at Credit Safe LTD, don’t give advice on terms, we always recommend that you speak to a specialist lawyer, if you’re in software development a then a specialist in software terms and conditions. In simple things like invoice querying, our terms and conditions state that any queries of an invoice must be received in writing within 28 days from the issuing of that invoice and that they won’t be considered valid thereafter. So that cuts people out from people saying “Well I phoned you up and said I’ve got this problem and that problem…” Defining where the risk goes from yourself to the client at what point does the software become theirs if its software, if it’s knowledge, you’re in PR say, it’s at what point does it cut off when you’ve delivered your services. So if you’ve got to the point where you can say to the client “Well, I’ve delivered my services”, if you are in PR, how do you qualify that you’ve done that you’ve done what you said you were going to do? These are all the kind of things that you need to speak to a solicitor about and get some good terms and conditions drawn up. Because as I say, worst case scenario, you will be relying on these to get paid.

[25:35] Darren: OK. I mean that, Adam, is a whole discussion in it’s own right. I see lots of software builds, I’ve got religious about making sure the specs are prefect, making sure the programming team really get that, and getting every single bit of detail down there and then staging it and then signing off those stages. So that in itself is a big discussion and maybe we might have to do another podcast after the part two of this. I think for part one we’ve conveyed and gone through so much useful stuff already in terms of the credit control, the terms and really basic stuff. The audience out there don’t worry, just listen to some of the points. We’ll get the guides on Freelance Advisor and you can pick and choose the key bits that will make a massive difference to credit control and collecting debt.

[26:22] Andy: We’ll have to leave there thank you for listening to Freelance Advisor. Next time we’ll be talking about if it all goes wrong. So that’s goodbye from me, Andy White, Darren Fell, Rob Warlow and Adam Home.

We wish you the best see you next time.

Nonetheless, I was intrigued by the idea of websites which enable you to build your own social network. So I decided to try one out.

SocialGo is one such website that does just that. The service could be potentially useful for freelancers working from home who would like to create a personal network made up of fellow professionals.

The advantage of a website like SocialGo is that it enables you to, in effect, create your own personalised portal where people can trade ideas via blogs and forums or upload videos and photos.

Is it user-friendly?

When I first visit SocialGo I’m surprised by how easy it is to set-up. Inside five minutes I’m able to create my own network – and that would have been quicker if it wasn’t for a fiendish security code. There are a number of templates you can use to personalise your site and a swift intro video gives you a guide to the basics.

It’s all very very easy and getting people to participate is done via a simple email invitation process.

Premium features

The premium features on the site (currently standing at £24.99 a month) offers unlimited storage and the opportunity to run advertising on your network. You also get your own URL. Live audio and video chat is also a handy option.

Rivals on the market

SocialGo is very similar to Ning which also purports to give you the opportunity to build your own social network. The difference is that Ning has more pricing points, but no free option.

phpFox is another alternative more suited to those who want complete control over design and layout. This looks the most professional looking service (it’s core is CMS) but you get what you pay for and isn’t as simple to get started with as the others.

Why not Facebook?

The advantage of having your own personalised network is that you can have complete control of who you have in your network whilst enabling you to define the parameters of your communication. This gives you the chance to replace the water-cooler conversation you would usually get in an office.

The Facebook’s and LinkedIn’s of this world don’t really give you the same opportunity due to their expansive nature.

Instead, by easily creating your own network you can create an exclusive group to have the conversations you want to have without the distraction of unwanted guests.

Image by luc legay ~ cc

One option which has been spoken about recently, involves the creation of a new General Anti-Avoidance Rule known by its acronym GAAR.

How does a GAAR work?

Unlike IR35, a GAAR is based on principles rather than prescriptive rules, and such legislation would enable new case law to be developed afresh. The idea of using a GAAR was first mooted in June’s Emergency Budget which stated that they would “examine whether….there is a case for developing a General Anti-Avoidance Rule.”

Such legislation would give HMRC more powers to make judgements on issues of tax avoidance enabling closer scrutiny of income tax, corporation tax, capital gains tax and inheritance tax.

In the case of independent contractors who are employees in anything but name, this means that HMRC can more flexible in concluding whether or not they should be subject to the tax liabilities of normal PAYE employees. In a sense, a GAAR would enable them to redraw the lines case by case.

The History of GAAR’s

Back in 1997 the Labour government proposed the establishment of a GAAR, but after being lobbied by the accountancy sector they dropped the idea amid concerns that it would be unworkable.

Canada, New Zealand and Australia have introduced similar laws, and in Canada they have developed an interpretive element to the legislation.

Why GAAR’s can be great

• A General Anti-Avoidance Rule would allow the courts to develop new case law which could redraw the lines on the issue of “disguised employees” who work as contractors. As a result, there could be much more clarity than currently exists with IR35.

• A more common-sense interpretive approach will mean that those who abide by the spirit of the law will have no need to worry. It’s only those who are cynically trying to avoid paying their full tax liabilities who should be concerned.

• A GAAR is potentially less damaging than the other alternatives to IR35. Replacing IR35 will be a hard task – a tax system that’s too simple and static will be open to abuse from tax evaders.

• A GAAR may help clarify the status of offshore accounting schemes.

Why GAAR’s can be grossly unfair

• If it isn’t operated properly without the required checks and balances, it could give HMRC too much power leaving contractors swimming in a sea of uncertainty decorated with huge whirlpools ready to drag you down to the seabed with fellow unsuspecting victims of anti-avoidance measures.

• There are doubts that a GAAR would fail to place a significant burden on HMRC to justify its use. This would leave contractors at the mercy of their whim.

• A GAAR would tackle a wide range of functions such as tax planning, signing a trust deed, moving money into shares and transferring assets. As one commentator said: “It’s like using a sledgehammer to crack a nut.”

• There are simply too many potential hazards if it isn’t operated properly.

Summary

General Anti-Avoidance Rules present both an opportunity and a threat. If worked improperly then they could become a nightmare for contractors, but if done so sensibly then it may just provide a common sense interpretive approach which will offer greater clarity surrounding the issue of ‘disguised employment.’

Image by Learning Futures Festival 2010 ~ cc

Focus: The Power of Targeted Thinking attempts to give the solution to all these feelings of confusion and distraction. Author, TV script writer, lecturer and consultant Jurgen Wollf offers intriguing time management techniques — from recognising the 80/20 rule in your life and work to the Alter Ego strategy (think De Bono’s ‘Many Hats’) — this book is a great read for anyone looking to boost their mind’s ability to focus on what matters most.

This is an easy to read and inspiring book which not only lays out the theory but has plenty of space to write notes — each chapter comes with a practical exercise that helps you focus and see how the techniques are to be applied.

The main focus (sorry!) of Focus is it shows how we can direct energy at the key tasks that lead to success, bringing in the creative parts of our minds, spotting and noting dreams, and then realising them by overcoming the information overload and stress associated with the tumult of distractions of today’s knowledge work.

More than just time management, Focus aims to helps you manage your own psyche, acknowledging the range of alter egos we all have at our disposal and harnessing them for specific tasks:

You can be ‘Miss Money Penny’ the rational, conservative you, perfect for preparing taxes or deciding purchases. Or you can be ‘Atilla’ the strong, and goal orientated fighter, the person that never lets others ride roughshod over your needs. Or, my favourite, ‘Sister Harmonia’ the negotiator – gentle, conciliatory and reasonable.

Published by Pearson the book comes with multi-media support material video interviews, diagnostics, mp3 and PDF downloads, plus blogs, podcasts and e-bulletins, all available on www.focusquick.com.

A great read. A practical workbook for anyone lacking concentration or dealing with diverging priorities: 8/10

Buy the book

Published by Pearson Prentice Hall and available, as always, from Amazon.co.uk

Win the book

Fancy finding some focus? We’ve got a copy of the book to give away.

To enter

• Simply log-in below
• Enter your answer to the following question:

“What focuses your mind? What is your best tip for finding or regaining focus?”

• Log-in via Twitter or Facebook and make sure you tick the ‘Share’ box.

Hint: Share on both Twitter & Facebook and double your chances of winning! ;)

We’ll pick a winner at the end of the month.

Read more in the #FreelanceFocus series

“I am a London based image retoucher, creative artworker, reprographics and print production workflow specialist offering my skills mainly to advertising agencies, photographers, reprographic studios, design consultancies and printers.

“For over twenty years I worked for some of the country’s top high-end design, reprographic and production studios. My work has won awards and I have produced all sorts of imagery, brochures, advertising and packaging for national and international brands.

“Early this year I felt it was time for a change and resigned my position to start Bill Greenwood Ltd.”

Why leave the comfort of a regular wage and risk it all?

“A number of reasons really. For me it was about the challenge, my skills paying for me and not lunches for someone else; also the freedom and flexibility of working for who I wanted to and when I wanted to.”

How did you start the process of going limited?

“I pitched the idea of me going solo and starting to trade as a Limited company to a few trusted friends and industry people and the support and response was amazing, I had a lot of great feedback and even the promise of projects to work upon once the business was up and running, all of which so far have come to fruition.

“So I was convinced.

“It was a matter of sorting out the company formation, accountancy and of course dealing with the taxman.

“So now to deal with the administration headache!”

How did you decided to go limited? What research did you do?

“Over three months I did a lot of research. Visited many forums and websites that dealt with company formation, accountancy, bookkeeping, Corporation Tax; VAT, PAYE: the list goes on and on.

“I must have read hundreds of articles online covering all these topics. The HMRC website became my homepage for a while and virtually every PDF relevant to what I wanted to do (setting up a limited company with me as the sole director) passed my eyes.

“I became a bit of a tax geek!

“Having never set up a Limited company before I was confused by some of the websites I visited. There is a lot of conflicting advice out there and although I could have carried out the paperwork myself I decided that I would get a professional company with all the right credentials to sort it all out and get it right first time.”

How did you choose an accountant?

“Accountancy and bookkeeping was another area that was vital to get right. It’s not my core skill and I admit to being a newbie in this area. I wanted to be able to see instantly how my business was running financially but was not keen to spend valuable time learning and managing an accountancy application. Ideally I wanted an online solution where all my information was available to me wherever I was. I looked at a few online systems, made some calls but was not totally convinced that the packages I looked into so far were right for me.

“A colleague mentioned Crunch Accounting and I got busy looking into them. I signed up for a demo and was very impressed with the online software, it was just right for me. A call to the Crunch offices put me in contact with Ed Hopkins who really knew his stuff and fully answered all my questions. Ed took me through the whole process and offered me some great advice to save the business and me money.

“The bonus of a dedicated account manager and of a fixed monthly price that the company could budget for with no tied-in contract definitely helped influence my decision. I was confident that signing up with Crunch was the thing to do, so I did. Crunch also carried out my company formation for me and also became my registered office. All the services I required in one place.”

What about choosing a bank account?

“Santander offer free business banking for life. My branch in Camden set me up with an appointment with a local business banking manager David Barter who was first class and excellent getting the paperwork sorted. Everything went smoothly.”

How did you find clients and work?

“In my case, even though I have been in my industry for a long time, have built a decent reputation and many contacts it was still like starting over. During my initial investigations I was lucky to have been offered some projects and these have been realised with others still to be carried out. So this gave the business a great start.

“Of course for all businesses, marketing and promotion is an ongoing and necessary task. I’m always looking for new and interesting projects. I utilised LinkedIn and other online forums associated with my trade as well as the tried and trusted methods of meeting contacts and attending functions to promote my services and skills.

“I put together a website to showcase previous projects, this is still a work in progress for me as I have been quite busy and still have so much more to put on it.”

What’s the best part of being freelance?

“Being your own boss, it’s great fun and quite exciting. An ongoing story!”

If you are looking for freelance artworking, retouching, posters or packaging then check out Bill’s portfolio site — BillGreenwood.com

If you want to get all historical, the true name of this rule is in fact the Pareto Principle, coined in 19th century Italy by Vilfredo Federico Damaso Pareto. An economist interested in the study of income distribution, Pareto observed that 80% of the land in Italy was owned by only 20% of the population. Fast-forward to present day, and the same rule can be applied to many facets of today’s economy, including everything from the 4-day workweek to the infamous Longtail.

How does the 80/20 rule relate to freelancing?

In a business sense, the 80/20 rule is often best applied to a shop’s traditional stock and inventory, where 80% of sales are actually made from only 20% of inventory. The savvy shopkeeper focuses on that 20%, thereby reducing costs while maximising revenue. It’s a no-brainer.

Similarly — though our stock is virtual — the same applies to freelancers. We sell our time, services and skill sets to clients, yet (in most cases) 80% of our business comes from only 20% of our clientele. This doesn’t mean we stop looking for new business, but it does underline how important our existing clients really are.

The key to good business is recurring business

Fact: the cheapest and most effective way to get new business is to focus on existing business.

Acquiring new clients can be costly, time-consuming, and difficult. Paying for outbound marketing, travel expenses and the gut-wrenching feeling of not winning a pitch after hours of blood and sweat are enough to make many freelancers wince in pain. In comparison, once you’ve won a client, they might be more valuable than you ever expected.

The takeaway? Love your 20%

We’re all clients to someone, so we can all appreciate good service. Everything from being proactive and saying hello once in a while to a willingness to help out in a cinch all amount to forming great relationships with your existing clients through good service. And it works both ways; in return, your clients will keep you top-of-mind when they’re discussing their business with colleagues, peers or contacts. “Hey, who did your website?” can be all it takes. Word-of-mouth (WOM)-referred business can be priceless – people trust the opinions of people they know, which helps lower the ‘getting to know you’ barrier dramatically. And the best part? It didn’t cost you a penny.

Want another reason?

When your clients have new work, what are they more likely to do? Go through the bother of finding someone new, untested and unknown, or return to you — their tried, tested and reliable service provider who always seems to offer great service?

Another reason?

Upgrades. If your clients are already receiving one service from you, they might have a need for services they weren’t aware you offered. It’s easier and cheaper for your clients to go with someone they know and trust versus finding someone new. Similarly it’s easier for you to ‘pitch’ your services to someone who already knows what you do, how you work, and what you’ll bring to the project.

So go give your clients a hug

Just like that shopkeeper focusing on the 20% of their stock that gets sold, it’s a no-brainer to give your current clients some love. They’ll thank you for it, not only through appreciation but by passing new projects or referring potential new business to you. Who can argue with getting 80% of new business simply by being offering good service?

By Jon Aizlewood Freelance web marketer & designer, founder and director of CarbonGraffiti