Business Musings: The Freelance Scramble Part Two: The Actual Scramble

I initially promised you in last week’s post that we’d discuss the bleakest of the bleak moments in a freelancer’s career—when no one pays, for whatever reason—and we will, just not this week.

Because I wrote the next blog post, and honestly, aside from depressing me, I kept alluding to other important things I would get to. Instead, I’m putting that post last or second-to-last in this little sequence, and writing about the actual scramble.

Last week, I discussed the three charts that a writer who does her annual planning should have. They are cash flow charts. To recap just a little, just because a freelancer has been promised a $12,000 advance doesn’t mean the money will come in at once. It’ll come in chunks. Other freelance income will arrive when it arrives; the freelance writer can guess, based on past experience, but she can’t know for certain.

Except in indie publishing. The online retailers do pay on a regular schedule, but predicting the amount a freelancer will receive six or eight months from now is difficult. For more on all of these points, see last week’s post.

So what freelancers have to pay attention to is how the money will flow. That’s where these three charts come in:

  1. The first chart shows how everything might
  2. The second chart shows how it probably will
  3. The third chart shows the absolute worst case scenario…assuming the freelancer does get paid.

Long-term freelancers become adept at merging the first and second charts. We can usually predict when things might flow and that is usually how they will flow.

But long-term freelancers also know that the third chart is the most important. Because if the money is significantly late, the freelancer needs to be prepared.

Last week, I discussed some financial behaviors any long-term freelancer writer needs. Please see those. I also discuss money management in The Freelancer’s Survival Guide, but that’s for the general freelancer/business owner. You can find the old posts here for free, or get all of the financial information in the Guide or the short book on that topic, How To Make Money.

Because the Guide is for the general freelancer, I never discussed the freelance scramble. It’s different for every business.

For the freelance writer, the scramble goes like this:

  1. Identify the Problem.

Every freelancer I know revisits their future payments chart on a regular basis. The best way to do this is daily or weekly, but some writers (with fewer income streams) can do it monthly.

The charts I mentioned above are cash flow charts and they should cover the entire year. The charts should show how you will pay your bills (and how much money you’ll put into reserve) for the entire year. Granted, when you begin the year, you’ll be guessing at what will happen in the last half of the year, but you need to guess.

So, when you start into your regular review, the moment you see a hole opening up, you need to fill that hole.

Let me use two examples.

The Traditional Example:

You make your living writing novels for traditional publishers. Your editor, who promised to get to your finished novel in December, still hasn’t read the book (or accepted it) in January. Acceptance payments aren’t triggered until the editor reads the book and puts in for the check.

Nagging isn’t helping. The editor got swamped with something else. So it’s time to revise the cash flow chart. The acceptance money which is, from our example last week, $4000, won’t arrive in April like you thought. The earliest it will arrive now is June. Never plan for the earliest, however. Plan for the latest. If the earliest is June, then add 90 days. Plan for the check in September. And assume the publication payment will be moved back by an equivalent amount.

Suddenly, all of May and June’s bills, which you planned to pay with that advance, are not covered. You have to make up the $4000 and fast.

The Indie Example:

You made $2000 per month on your indie books in September, October, and November. You made $3000 in December and January. You planned your next year’s income at $2000 per month (and put the extra in December and January into a reserve account).

Sales plummeted in February (for no apparent reason that you could see) to $1000 per month and it looks like they might go lower in March.

That means you’ll have a cash flow shortfall in April of $1000, and that shortfall might be larger in May and June. (Most online retailers pay on 60 days.) You’ll need to make up at least $1000 per month in the spring, and maybe more if the shortfalls continue into the summer.

In fact, if they continue longer than a month or two, you’ll have to accept $1000 on your indie books as the new normal.

Assumptions:

In both cases, I’m going to assume that you have done all the right things. You have a good emergency reserve fund. You have paid off everything you could afford to pay off.

Most people can’t afford to pay off their mortgage, so I’m going to assume you have a mortgage/rent payment, insurance payments, and of course, food/gas/incidentals. But you can’t trim your expenses any more.

In the situations described above, no freelancer would want to touch the emergency reserve.

Because, unfortunately, cash flow shortfalls happen all the time. If your career is going well, then cash flow surpluses will happen as well. You must manage the surpluses just like the indie writer in the example above, and not spend every dime.

The surplus money will get you through the lean times.

So…to avoid touching the emergency reserve, the scramble begins.

Situations like these are why I advise every single freelance writer to have more than one income stream. If you write for traditional publishing houses, make sure you’re published by more than one house (and often under more than one name in more than one genre).

If you’re indie, never go exclusive with any online retailer except, maybe, for a single short-term promotion on a single product. Most of the writers harmed in that KU Apocalypse that I mentioned last week were exclusive to Kindle and had not built any audience on any other platform.

Scrambling is tough when you’re exclusive with anyone—traditional or indie.

Frankly, this is why being a hybrid writer makes a lot of sense in the modern market. You have indie income to rely on every month, and you can get lump sums from your traditional publishers to replenish, add to, or fix the reserve accounts.

So, first let’s talk about the short-term scramble.

  1. Resolve The Short-term Problem

You’re not going to get the amount of money you expected in the next few months. You’ll need to replace that.

Most freelancers have some go-to for income replacement that don’t require a withdrawal from the reserve fund.

The key with short-term replacements is that they pay quickly.

The replacements completely vary as to who the freelancer is.

When I was writing nonfiction fulltime, I had some local contacts who paid quickly and who always needed extra freelance help. Those places usually paid less than the national journals that published me, but the smaller publications often got me through.

Sometimes it was a pain in the butt—especially when I had to take 10 $200 jobs to fill one $2000 slot—but that bought time and saved the reserve account for a true emergency.

Generally, in my old lean days, I relied on my nonfiction to get through the fiction shortfalls. A lot of writers can do that.

Since this blog is about fiction writers, however, let’s look at their options without the nonfiction add-on.

Traditional fiction writers don’t have the option of taking 10 quick poorly paying writing jobs to make up for a single writing gig. Most traditional fiction venues pay on their own schedule and usually can’t be convinced to shorten the payment time.

So traditional fiction writers often have to add something to their repertoire—copy editing or teaching a night class at the local community college, something that will make up the short-term cash flow.

Making up the short-term cash flow is toughest for traditional fiction writers, particularly traditional novelists. They have to do something other than fiction writing to pay the bills in the short term.

Indie fiction writers have a variety of options. They can scramble and write some new product, maybe in a series or something, and get their fan base excited about the new material. Even if the new material doesn’t make up the entire shortfall, it will add to the indie writer’s income down the road.

There are other indie ways to goose sales. Lowing the price on the first book of a series and maybe investing some money in a Book Bub or other form of advertising might make up some money in one of those dry months. (That Book Bub money might have to come out of a reserve fund to be repaid when the money from the promotion comes in.)

The other end of the price spectrum for an indie writer is to write something new and release it as a hardcover limited edition special, with all kinds of fancy production values and an autograph at a very high price. You might need fewer than 100 purchases to more than replace your shortfall.

It completely depends on the indie writer’s fan base and the level at which she’s selling. She might be able to goose sales, or she might have to do what the traditional writer does—moonlight on something else.

The nifty thing about being indie, though, is that indie writers have more time to experiment with finding a way to replace the lost income. They can write something new in their series, start a new series, and do some high-end limited edition work. If one of those three gambits don’t work, then maybe something else will.

All of that doesn’t rely on someone else’s publishing schedule and someone else’s payment time table.

Hybrid fiction writers have the best of all worlds. They can use their indie publishing to up their short-term money, just the way that indies do, while using some of the traditional writers’ tricks if necessary.

So the editor at the traditional house won’t get to the novel for another two months? Oh, well. Write something new in the same series for the fans and/or release some more backlist and/or write a new novella in one of your other series and indie publish.

The hybrid writer has options, and those options expand when we look at the next part of the scramble.

  1. Evaluate The Long Term Health of Your Freelance Business. 
    • Figure out the cause of the delay for payment.

This delay in payment, whatever it is, should cause you to re-evaluate your contracts and your ties. Has this company paid late consistently? Is the lateness predictable? If so, they have a different payment system than you initially thought. As I mentioned before, most traditional publishers pay significantly later than they contractually promise. There’s not a problem at the publishing house; it simply means that you have to plan for how they pay instead of how they say they’ll pay.

If the lateness is unusual, shrug it off. If the lateness gets worse and worse each time they owe you money, or if you’re at the point where you have to threaten before they pay you, then you should probably slowly stop working for the company.

Do you have a new editor? Does the editor actually like your work or is she not all that interested? Does she return phone calls? Answer e-mails?

If the answer to any of those questions is no, then re-evaluate your relationship with the company. Don’t pull out of the work you’ve contracted to do. Just don’t contract for any new work.

  • Examine your other existing contracts.

Do you like working with those companies? Is it too much work for too little money? Do you actually enjoy the writing?

I quit doing nonfiction regularly even though it was lucrative when I realized that it bored me. I knew what I was going to write the moment the research and the interviews had ended.

I had to replace that income with fiction income, and that took a transition. Instead of committing to more nonfiction work, I got a part-time job (that paid significantly less). It carried me over while I redesigned my business to fit who I was, not how I started out.

  • Look around you.

Are a large number of other writers have the same issues with the company that you are? Are a large number of writers having the same kinds of problems in general that you are?

Writers often think they’re the only ones. In 2011, when I ran into a head-long collision with the world’s worst editor, I solved the problem quickly because I knew how to deal with total assholes who change the rules of the game midway through. 

Later, I learned from a writer friend that the other writers in this editor’s stable have also encountered horrible behavior from her. The kind of behavior that should get anyone fired from a corporate job. (Seriously.) Bullying, nasty, horrid behavior.

And the writers think it’s their problem alone. They are afraid to act. Yet if they all let this editor’s boss know, as I did, then maybe the boss would have enough ammunition to finally get rid of this corporate liability.

No matter what the corporation does, the writers should realize that the problem isn’t their behavior. It’s this editor’s. And that should give them comfort and help them plan their escape from working for that company.

Sometimes, the problem isn’t an editor. Sometimes, there’s a shift in the Force, Luke. We saw the world start to change in 2009, and many of us started changing our behavior early. Others jumped on later. But some still don’t understand that this once-staid publishing industry, which had been stable for so long, isn’t the industry they started in.

It’s been disrupted, and they have to plan their business according to the new model, not the old one.

When you step back from a financial setback, and start to figure out what wrong, never discount the overall changes in your industry. In fact, you should always look at the wide picture as well as the small one.

Because sometimes the things you used to do to resolve a financial problem might not be available to you.

Let me give you an old-school example first, and a more modern one second.

My go-to solution as a nonfiction writer in the 1980s to any short-term financial problem was to go to a newspaper—any newspaper—and do freelance work. I would pitch local stories to national papers and I would take national stories and make them local for regional papers.

That’s not a good-paying option any more. It’s really not an option at all.

A lot of writers used to sell more books to their traditional publisher to fill holes in the cash flow. Those books would sell for a predictable advance, usually at $20,000 to $50,000.

Now, those advances are reserved for writers who’ve hit the New York Times bestseller list (not at number one, mind you). Even writers who were once making high six-figures have seen their advances cut, fewer books published, and their publishers unwilling to take another book Just Because.

The changes in both of those methods—the 1980s newspaper method and the 21st century bestseller method—have nothing to do with the individual writer, and everything to do with the changes in the industries.

One part of the freelance scramble is realizing that the music has changed, so the dance must change accordingly.

  • Punch up your income.

One delayed payment can cause a cascade effect if you’re not careful. You’re late on the mortgage this month, and you might remain late for the rest of the year.

So, let this missed payment from your client be a shot across the bow. Do some extra work so that you’ll get some extra money six months from now.

Freelancers in traditional publishing do this all the time. They take on another book (as I mentioned above) or they write a bunch of short stories or they write some how-to nonfiction.

If indie writers add to their series to pay short-term bills, those new stories will continue to pay the way long into the following year.

But this part of the freelance scramble is where the hybrid writer really shines.

She can do the short-term indie things to make up the budgetary shortfall, and she can add some longer-term traditional publishing projects to make more money toward the end of the year.

The hybrid writer is so flexible that her options have options. (Okay, the metaphor breaks down, but you know what I mean.)

  • Finally, while the shortfall continues, reassess more often.

Keep an eye on what’s going on while you’re scrambling to replace the lost income.

If you replace the lost income correctly and the publisher eventually pays (or your indie sales go back up), you should be able to put that “lost” money into your reserve fund when the money finally shows up.

If you’re a master at the scramble, you won’t take money out of your reserve fund. You’ll end up, before twelve months are over, putting money into the fund.

I know, I know. I’m being more than a little vague here. But as I said when I started this piece, every writer is different. We all have different skills and that means we have different ways to scramble.

Some of us can sell more than one project to more than one traditional publisher. Some of us have editors who’ll work with us on a variety of projects—all we have to do is ask. Some of us have nonfiction skills. Some of us have editing skills. Some of us have the ability to write and publish really, really fast. Some of us have a marvelous fan base that will buy everything in our most popular series.

We just have to think like a freelancer. When the going gets tough, the freelancer scrambles.

And that’s the dance.

Or part of it.

I’ll deal with other parts of the dance in a few more blog posts. There’s a lot to freelance writing that didn’t make it into The Freelancer’s Survival Guide because the Guide is not just geared toward writers but to all freelancers.

So I’ll explore some of this other stuff in the coming weeks.

My blog posts are part of my own freelance career. I have a dozen other things to do, including some major editing and writing projects. I’ve finally started properly prioritizing the blog, which means it has to pull its financial weight to stay high in my to-do list.

So, if you find anything in what I do valuable, please leave a tip on the way out.

Thanks!

Click Here to Go To PayPal.

(Yes, White Mist Mountain is my company name)

“Business Musings: Freelance Scramble Part Two: The Actual Scramble” copyright © 2015 by Kristine Kathryn Rusch.

 

 




9 responses to “Business Musings: The Freelance Scramble Part Two: The Actual Scramble”

  1. These are helpful tips before going in to the craft. Every freelance writer must know how to possess proper dealing and gain trust with the client. And also, let’s be responsible in our work and time management as well since most of clients tend to have time quota. This is a good heads up, thanks!

  2. I’ve always thought that exclusivity is, in the long run, self-defeating and an encouragement to predatory business behavior.

    So I’ve been following a simple rule for a while: If a book is available from only a single distributor, I won’t buy it.

    Does this mean I miss out on some books that look interesting, books I’d like to read? Sure. That still leaves dozens and hundreds (possibly dozens of hundreds) of non-exclusive books that interest me, far more than I’ll ever have time to read.

    I guess this falls under the didactic of “You’ll thank me for this someday.” (That’s right, when I won’t buy a book, I am acting as if I were the author’s mother. Or a mother-something, at least.)

  3. C.E. Petit says:

    Borrowing a bit from Professor Harold Hill, and utterly butchering the meter, there’s another factor that one must take into account when there’s a late-payment issue:

    There’s trouble in Writer City
    With a capital T
    And that rhymes with B
    And that stands for Bankruptcy
    Bankruptcy?
    Borders!

    Notice that this doesn’t refer to the writer (although writers certainly have enough direct trouble!), or even the publisher, as much as it does the rest of the distribution chain; it might be an intermediate distributor you’ve never heard of. A bankruptcy filing will not only delay payments, it will shrink them, both visibly and invisibly.

    You can’t predict this kind of bankruptcy, or even take any reasonable measures to avoid it.* Neither can you ignore it. Anyone who was actually paying attention could watch the problems that Borders had (and that Barnes & Noble has) well in advance. Due to the way distribution agreements are structured, neither the author nor the publisher may have any real ability to control the outcome; it’s often watching a slow-motion train wreck.

    * With one exception: The indie/hybrid author’s direct relationship with a particular vendor can, in some circumstances, lead to an “avoidance” ability… and I use that word advisedly, because avoidance in bankruptcy is all kinds of fun! This is a difficult circumstance that bankruptcy law is only edging toward acknowledging; when I put such a situation to five leading bankruptcy professors during the Borders fiasco, I got six different answers on the appropriate way that it should be handled under the Bankruptcy Code.

  4. Kris, Pati linked to this and I read it, and it is equally good advice for those writing fiction & nonfiction and also people in related businesses such as my business planning work. I have found that individuals and family-owned businesses pay much more reliably and on-time than, sadly, larger corporations. Even if the amounts are not large, one still budgets them – just as you describe.

    As an aside, I read your earlier discussion of “R*E*S*P*E*C*T.” I saw it was from 2011. In 2011 I wasn’t sending my work out much and pretty much only doing a few things for Book View Cafe. I’d already had an agonizing experience of going to editorial board at Scholastic and getting turned aside for earlier books. So, in 2012, I started a book thinking, “Well, I’ll put everything I’ve learned over time – gee whiz, everyone knows I’m a slow-learner anyway – into this book.” I finished it, not expecting the world but expecting to at least get SOME reads. I thought this was the book of my life at that time and I was just completely blown away. I couldn’t understand … then I started researching and comping the publishers the way I did all other businesses and industries I’d worked in. With now over 160 businesses under my belt, having worked to create economic and housing development projects in one of the world’s largest cities, I had a few analysis skills to bring to bear.

    Well – as you noted in your article – on a grand, industry-wide scale. In the numbers and in the business organization, at all levels. Siloing on a scale unsurvivable in other industries. Tech-lag, also on a similar fatal scale. As to the fiscal model and the way in which most make key operational decisions … (and hiring – i.e. the cheapest young people possible, regardless of capability and experience). If these were airlines, all passengers would be dead, airline permanently grounded. Hey, a new analogy!

  5. Sally says:

    I’m shaking my head (though not surprised) at Ferran’s report of people who’ve been screwed by KDP and are still with them. Exclusivity is not where it’s at. “Diversify your investments” is an axiom for a reason.

    Publish at Amazon AND Nook AND Kobo AND Smashwords AND iBooks AND Google Books.

    People who read on their phones get one of the last two standard on said phones (Or tablets). They’re stuck in line at the DMV and there’s that little button they can push to get a book. Is it going to be yours or someone else’s?

  6. Robin Brande says:

    Kris, each week just gets better and better. Thank you for this boatload of great advice–and timely, too, this day after tax day.

  7. Ferran says:

    If you’re indie, never go exclusive with any online retailer except, maybe, for a single short-term promotion on a single product. Most of the writers harmed in that KU Apocalypse that I mentioned last week were exclusive to Kindle and had not built any audience on any other platform.”

    I still got singed saying that after the event. Exclusivity’s been promoted to a belief. And I still know writers who only deal with KDP. The mailing list I met Rory at? One of us just posted a long rant on trying to recover his library from Amazon, a high 3-figures catalogue. Imagine telling him, at this stage, “read me at Amazon or don’t”. This is basically what KDP-only people are saying. Some people even say “KDP or Nook”, which is twice as silly: you no longer have exclusivity AND YET you’re latching yourself to the same KDP world without its extra benefits and a damn sinking ship. Yay.

    And it’s not even “KDP only for a while”. How many KU-singed people are STILL EXCLUSIVE? It takes at most 90d to leave. You can even leave before that, if you accept a banking-like penalty.

    “There’s not a problem at the publishing house”

    Sorry. YES, there is. If you’re a retailer and a customer is chronically out of money when he deals with you, or is always cutting the line or… There IS a problem “at” that customer. His finances, his perception of obligations… whatever. It IS a problem. You may decide to accept it, the same way we can accept the uncle with the tall tales or the one with a gross mouth. But a problem it is.

    If the answer to any of those questions is no, then re-evaluate your relationship with the company. Don’t pull out of the work you’ve contracted to do. Just don’t contract for any new work.

    My editor is several months late and isn’t returning queries while I yet have to see a single dime… pulling the piece is not unreasonable. Specially since, these days, there ARE other options. Plus, probably (and I know this is NOT going to happen) a case for lost business.

    “Now, those advances are reserved for writers who’ve hit the New York Times bestseller list”

    Beats me how someone could have enough clout to be in the NYT list and yet accept those advances, considering how likely it is that there will be no accurate reporting of sales.

    Take care.

    • Thanks, Ferran. I’ll be dealing with how to tell business practices from problems in a week or two on this.

      And sorry, it’s part of publishing for them to pay later than the contracted date. I’m afraid every single traditional publisher does it, and does it according to their own system. So if they’re consistently late in the exact same way (one month after signing), then there’s no problem. It’s when they become inconsistent or change their patterns that there’s a problem.

      This is yet another way that traditional publishers differ from other businesses. Sadly.

      I see your point that it’s a problem–and yes, it is–but like that uncle with gross mouth, it’s not one they’ll change. 🙂

Leave a Reply