Ask MetaFilter questions tagged with selfemployment

How is my business plan wrong?

DerangedGoblin — Mon, 21 Sep 2009 09:13:06 -0800

What is the likelihood of my product selling such that I make $1000 a month? What money I've put into it isn't an issue as it was sort of extra money that I wanted to put to something like this anyway. Everything I do to figure out how much I'll make seems to imply that I'll be rich (for a student) and I don't believe that's true, but I can't figure out what I'm missing. This is my first post on AskMefi, and for that I'm sorry. I was hoping my introduction would be through a post about healing all the pain in the world, but realistically I don't suppose any post would be good enough. Also, I'm real sorry this is long. I've been reading askmefi for a long time, but I wouldn't be surprised if I messed this up. Just correct me if I do.

This is the very basic version of what's going on. I am in the process of making a product. The product is a how to guide regarding studying in the context of other things, ie, memory techniques, note taking techniques, keeping a healthy mind, etc. I'm not linking to it or advertising it because it's really not necessary and there's nothing to link to yet. And this product is pretty good I think. It's not amazing, but I call it good in relation to other things I've seen and things I've done in the past.

I am also having a page made by a professional. Not just a white page with text that RANDOMLY GETS BIGGER AND BOLD.

I plan on having about 50 adwords keywords, ten for each topic of the course (speed reading, note taking, memory, mind health, and stress management). There will be five individual ads, one for each topic.

The other courses on memory and stuff I see online are 200-300 dollars usually. Mine has about that much information I think (It's 5 audio files, a booklet, worksheets, and a quickstart guide) and I'm not too ambitious (I'm a student, so even a little money helps a lot) so I'm selling mine for just short of 100. In the 90s somewhere. If it fails, I'll go a little bit further down.

The catch is that some people will recognize this formula as the Four Hour WorkWeek formula. And it is except I'm not using a physical product. I followed most of his advice, and while I totally understand and to a degree agree with the people who criticize how jerkish he seems, I'm trying to follow the book so that if it fails, I can criticize it instead of myself.

My reason for not mentioning it as part of the question itself is that I read the last Four Hour WorkWeek thread which seemed to address Tim Ferriss as a person, and the title of the book as unrealistic. No one seemed to actually consider his plan.

There's $50 a day on advertising. Assuming I sell this product at $99.99 (For rounding's sake) how likely am I to make $1000 a month?

The reason I ask is that I keep running the numbers and they are way way too optimistic. Tim Ferriss suggests assuming 1% of people searching for your term will click it, and 1% of them will buy the product. That comes out to 1/10000 people searching for the term buying it, and if that goes right then I'll be selling somewhere around 20 a month. I can't believe it's going to work like that. What am I missing?

Self-Employment for dummies

explosion — Tue, 09 Jun 2009 06:13:06 -0800

(Self-employment-Filter) What should I know about / be aware of when contracting for a local university? I know you're not my accountant, so I'll get that out of the way now.

I have been temping at a local university in my current position for close to 6 months as an assistant in an administrative capability. My boss is leaving at the end of the month, and I am effectively taking over her job, but there's a snag: due to the economy, there is a campus-wide hiring freeze. I've been temping in total for closer to 20 months, so at this point I would like to cut out the middleman. Even after paying the employer half of payroll tax, the difference in gross pay is substantial enough to make it worth my time.

I will be meeting with my boss's boss to discuss employment arrangements, and at that time, I would like to propose that the department pay me directly as a contractor, paying me the same rate (or maybe slightly more to reflect additional responsibilities) as they paid the temp agency. I'd like to be armed with some knowledge about self-employment though. I know the basics, like filing Form SE, and paying quarterly, but I'm looking more for the pitfalls to avoid, and maybe a link or two to something less opaque and confusing than the IRS site. Can you tell me what I should aware of? Can you pass along mistakes you (or others) have made, so I might avoid them?

Relevant details:
Massachusetts resident
Newly married (this will be the first year filing as married)
Wife makes similar salary
Insured through wife's job (no insurance worries, really)
No kids
Renting an apartment
The job will be the same, just removing the temp agency from the equation

Self-employment tax help for out-of-state web work

Anonymous — Tue, 24 Feb 2009 16:16:41 -0800

Self-employment tax help for out-of-state web work In late 2007, I moved from Ohio to San Francisco, leaving my full-time web-related job. In early 2008, the company I left started tossing freelance work my way. Lots of freelance work. So much that I never even needed to find local clients.

Questions:
1) Will I have to file an Ohio income tax form because the company paying me is located there? What about the city where the company is? (Yes, when I lived in Ohio we had city-level tax forms to file. I mentioned this to a SF resident once and it surprised them)

2) I'm assuming that I have to file a California income tax form since I live here, but are there any laws that say, for example, if the higher income tax state only gets the difference between the two rates? Or anything else pertinent?

Notes:
a. I have not been keeping up with estimated quarterly payments. Yeah, I know that's not really smart. I'd never intended to be a full-time freelancer. If I wasn't in the sweet situation of getting a steady stream of work from a company I was at for a decade, I don't think I'd have the temperament for it.

b. If it matters, we're talking about $73K of 1099 income.

Can I ride this thing out?

shallowcenter — Wed, 19 Nov 2008 07:37:33 -0800

Anybody have evidence -- empirical or anecdotal -- about what recessions do to the self-employed? I'm a freelance writer, and am wondering whether my clients are more likely to farm stuff out to me because I'm cheaper than hiring in-house staff or cut their freelance budgets and dump more work on the people they're already paying. Thanks!

Sgould I become a limited company? (UK)

hatmandu — Thu, 30 Oct 2008 04:15:56 -0800

I've been a sole trader for 10 years, but calculators such as this suggest I could save maybe £2000 a year on tax by becoming a limited company. Have others found it worthwhile? I'm aware the incorporation means more paperwork, as I'm already a director of another small company, though that's largely defunct now. As far as I understand it there are two main options for income in this way:
1. Draw a salary
2. Draw dividends. The site mentioned above suggests a salary of around £5000, and taking the rest as dividends as the way to minimise tax burden.
Does anyone know if it's legal/sensible to go down a third route:
3. Subcontract work to oneself as a sole trader. (ie so corporation tax is only paid on profits above the costs of subcontracting and other expenses, and I would pay normal personal tax on the profits from the contracts.) Or is this not allowed? Or too complicated?

I'll need to talk to an accountant about all this, of course, but any relevant experiences would be interesting to hear. (I'm below the VAT threshold, by the way.)

Setting realistic freelance goals and sticking to them

El Curioso — Wed, 02 Jul 2008 13:06:08 -0800

Freelancers and other creative self-employed types: How do you set realistic, meaningful work goals and stick to them when the main person you're answerable to is yourself? When you're your own boss, how do you set work goals that are both challenging and attainable - and more important, how do you take them seriously? (What happens when you don't meet them?)

As a freelance writer I struggle with this. Motivation isn't really the problem. (I often struggle to make myself stop working.) It's more about how to keep yourself answerable to yourself without driving yourself nuts.

I try setting goals, but either a) I meet them and then think, hmm, that goal must not have been challenging enough, or b) I don't meet them, and feel bad about it for a while but then that goes away. So then I just give up (if the boss is never satisfied, why bother?) and work hard all the time, which is its own problem, never not thinking about work.

I love what I do, and I want to keep doing it better and better, setting my sights ever higher, but I'm also tired of not knowing how high is high enough, what's reasonable to expect. I know this is a bit of a psychological issue - never being satisfied with yourself, being your own toughest critic, etc - but I'm sure there is some good advice out there.

I'm especially interested in hearing from creative types whose workflow is often dictated by people and/or events outside of your control (i.e. no matter how much you bust your ass, sometimes they're just not buying, assigning, etc.)

Whoah, that's a lot of self-employment taxes that I'm going to have to pay. Oops.

SpecialK — Wed, 02 Jan 2008 13:50:37 -0800

Self-Employment-Tax-Filter: I didn't expect to have much in the way of income from my consulting business in 2007... setting my deductions to '0' should've taken care of what I expected. However, I ended up making almost a quarter of my income by consulting. I understand you're not an accountant and you're not my accountant, but how can I end up not having to owe a ton of penalties for not having filed self-employment tax?

How much money do I need to save for my new business to take off without a hitch?

bacall423 — Wed, 07 Nov 2007 09:14:43 -0800

How much money do I need to start my business? And am I foolish to think I will be able to do this?? I'm planning to start a private investigating business in early-mid 2008. Before it happens, my partner and I will move from San Francisco to Eugene, OR (she's hopefully going to be attending grad school at UO). Our cost of living will decrease substantially, but she will most likely have a limited income, so I am fully expecting money to be tight for a little while.

My question is this: How much money do I need to save up in order to focus all my efforts on my new business once we're in Eugene?

The business will be low-cost to start-up - I've estimated about $3,000 will go into licensing fees, a new computer, etc. Moving fees have been estimated at about $1,200.

(I should mention here that my business will be a sole proprietorship, I will be working from home, and most of my work will be done online. I'm not the field investigating type of P.I., I'm the public records research P.I. with a librarian background. The main focus of my work will be background investigations and skip tracing.)

So, besides the estimated $4,200 needed to move and start my business, how much do you think would be necessary to have saved up before jumping into this head first? I'm not sure how much rent will be in Eugene, but I'm guessing maybe $800 a month for a 2 bedroom?

Should I look into small business loans, state funded grants, etc., or is that not a good idea?

Also, does anyone have any idea how much E&O insurance for this type of business might cost me?

My fancy degree doesn't buy me tax sense

universal_qlc — Tue, 12 Jun 2007 23:54:39 -0800

Another tax question by and for the self-employed...help me pay my quarterly estimated taxes correctly! I apologize in advance for the idjit-ness. I keep doing searches on MeFi and coming up confused....

I finished grad school in 2006, and went from earning $22K a year as a student to an independent contractor earning nearly four times that annually in 2007 (but started working only couple of months ago after being a lazy bum for a few months - hence the first quarterly tax payments on June 15). On the upside, I suppose I could afford an accountant now - but I'm stuck in my poor student ways.

Come Friday, do I only owe some portion (a third?) of my total tax from last year, even though it's waaaaay smaller than what I ought to owe this year? Or am I required to pay a third of what I expect to owe for 2007? According to the 1040ES, I think it's the former to avoid underpayment penalties, but it seems weird to pay only a couple hundred bucks when overall for 2007 I'm going to owe something on the scale of tens of thousands of dollars

I know that at some point I will have to pay taxes on the new salary, but I just moved and don't know if i can afford it yet; I'd rather wait until my emergency fund has been built back up (and put off paying the bulk of these taxes until next April and stash money in a high interest savings account to do so until then).

Oh, and I'm in the United States.

How to figure self-employment tax?

vraxoin — Thu, 15 Mar 2007 07:48:24 -0800

How to do a quick and dirty estimate of self-employment tax? Is there a simple way to determine how much of my self-employment income to hold back for taxes, assuming I have a good estimate of what the gross income will be? 35%? 40%? Something else?

Who will insure the middle-aged?

not that girl — Tue, 21 Nov 2006 06:51:17 -0800

Health insurance for the self-employed and middle-aged? My partner, a Perl programmer, lost his telecommuting job a few months ago. He's doing a regular 8:30-5:30 on-site job now and hates it, and is looking for another telecommuting job. Most telecommuting jobs seem to be contract work; his last telecommuting job was.

I want him to be happy (he was so happy working in our basement) but I have a lot of anxiety about contract work. We'll set aside the way I cling to an outdated employment model (my dad worked for General Motors for 35 years! Isn't that the way it's supposed to be?) and focus on one specific issue: health insurance.

He's 40. I'm 41. He has been treated for high cholesterol, he has asthma, he's got thyroid problems. I'm in excellent health but fat. Oh, and for extra spicy goodness, he's a transsexual (way post-transition).

Obviously, one good option for us is to use the insurance from his current employment under COBRA for 18 months. But what then? When he was in his old job, I researched private health insurance, and most of the information I found was aimed at the young and healthy. According to my research, it is very important not to be denied insurance--having been denied once can make it much more difficult to get insurance in the future.

I'm home full-time with two little kids. We obviously have way too much income to qualify for any publicly-supported insurance.

What are our options at the point our COBRA insurance runs out? What steps should I take at that time to get insurance for us? What is and is not possible? Anyone have experience with this? Advice? Things absolutely not to do?

Quarterly estimated tax?

not that girl — Thu, 17 Aug 2006 19:03:26 -0800

Recently laid off self-employed partner: should I send September's Quarterly Estimated Tax payment or keep it to buy food for my children? My partner has been working full-time for the last six months as a contractor in a position that we expected to be long-term. Since the employer hasn't taken withholding, we've been doing estimated quarterly tax payments.

Alas, partner was laid off yesterday. A quarterly tax payment is due in September, and I have the money for it set aside. But I am wondering whether I can skip it. Here are some relevant points:

We have already paid enough tax this year to avoid penalties for underpayment; we have already paid well more than 100% of last year's federal tax liability.

I recently realized that when I was calculating how much estimated tax to pay, I forgot some deductions. So it's possible that we have overpaid and will get a refund. Overpayment seems especially possible now since I calculated based on the assumption that he would be in this job at least through the end of the year, and now his income for 2006 is likely to be much less than I anticipated.

I think it is most likely that he will find regular employment with withholding rather than another 1099 job. But I haven't completely thought through how that might affect our total tax liability; it depends some on how much he earns at this new job which he will find soon.

If we could hold onto the several thousand I have set aside, it would nicely supplement our emergency savings for the (hopefully brief but we must plan for the worst) period of no income we are facing. I am assuming that even if we end up owing tax come April, next April is likely to be a much more convenient time to send off a big check that while our main source of income has fizzled out.

My question is whether there are any penalities associated with failing to send a quarterly tax payment after having sent the two previous ones, separate from any penalty for underpayment, which is not an issue in our situation.

I want more money.

Anonymous — Sun, 06 Aug 2006 08:08:29 -0800

Looking for suggestions to put my savings at work and generate more money. I have 59,000$ in a low interest fund at the bank at this moment, and I have 13,000$ coming in the next two months. Some of this money will have to go to taxes next April, roughly 30,000$ by my estimates. I am between jobs, but I am not particularly thrilled about getting a new one (i.e. working for someone else), and I would like to hear suggestions on ways to put this money to work and generate more money. Investing, entrepreneurship, hustling, anything goes. Though I don't really like the idea of investment. I want to get something done. For exemple, a friend bought two trucks and offers moving services. It seems to be working well for him. Would like to hear more ideas.

independent professional photography for dummies 2.0

Infernarl — Sun, 02 Jul 2006 04:38:37 -0800

I know someone who wants to become an independent professional photographer (of the wedding photo / portrait variety). I want to give this person a book that will teach them how to be independent professional photographer as a gift. Something that will give them some insight into aspects of the job beyond having a keen eye and talent. Can you recommend something?

Health Insurance Application Spin?

Anonymous — Wed, 18 Jan 2006 19:31:39 -0800

Do I have to represent myself with a flawlessly healthful past to be approved for individual (Blue Cross) health insurance? I'm not talking about fraud here; I'm just wondering what the standards are on truth vs. spin. I don't have any major illnesses or conditions to cover up, but I've always heard that when filling out a health history you're expected, (even by doctors and insurance brokers) to obfuscate a bit, and if you mention a medical issue, it's assumed to be much, much worse and you get blackballed. The form is asking for every detail of every single medical issue I've encountered in the last DECADE. Do I pretend I haven't had "sign or symtoms" of anxiety, acne, dizziness, infections or athlete's foot since 1995? If I say I have a glass of wine with dinner do they assume I'm a drunk? And if I omit anything, will they catch me by checking my doctor's records, specifically on prescriptions? I'd prefer to be completely honest, but if I get turned down I may just move to Canada, or someplace with a sane health system.

Wholesale game suppliers?

squidlarkin — Tue, 12 Jul 2005 21:34:21 -0800

(How) can I, a private individual, buy video games wholesale? I figure I've a decent feel for the market and can identify game that will stay valuable for a while, so maybe I could use ebay and turn a profit; all that's missing is a supply. The obvious google queries are saturated with uselessness, and the only "we will give you this for this much" answer I found only offered 50-count lots of assorted titles that belong in a bargain bin anyhow, which isn't what I'm after.

So, where do I legitimate suppliers? And just how much am I going to have to spend to get a decent price?

Ethics and Entrepreneurship

You Should See the Other Guy — Mon, 03 Jan 2005 13:18:55 -0800

Ethics and Entreprenuership. I've a lengthy question about being self-employed. I'm a web designer.

In June 2004 I was approached by an advertising company. They're mid-sized and only do non-online stuff (mostly print). One of their clients wanted their absolutely dreadful web site redeisgned and the ad co. wanted to meet with me to discuss the possibility of working together. I would consult on web-stuff (designing for it as opposed to paper, etc) and then code the site once they'd designed it. I met with them for about 2-3 hours to see if we'd get along and I gave them a lot of information and a lot of ideas for what do with a web site for a client in that industry. They were pumped about working together. I gave them a ballpark figure for my future services and they then pitched the client and told me that that budget was approved no problem. They wanted the site live by mid-August and were going to start the redesigning.

Over the next week or so, I sent them some emails with suggestions and a couple flowcharts for site structure, etc. Then, their responses stopped cold. No word, no nothing. I tried to contact them a few times in the next month and never once did one of the two people I met with get back to me.

We had no contract so whatever, I'm not mad about not making the $ (though telling me it was off would have been nice). Anyway, I've been to their client's site and it (6 mos later) still has not been redesigned.

My question is: would it be unethical, illegal, or stupid of me to just approach the end-client and say, "Your web site needs to be redesigned. Here's my proposal..." and pitch them on my own without mentioning the ad agency?

Note: I DEFINITELY would not even know of the end-client (it's not a manufacturer I'm familiar with) without the ad agency telling me of them. However, had I ever stumbled on their site in its current incarnation of my own accord, they'd be ripe for a pitch.

How would you approach this situation?

Cheap Health Insurance for the Self Employed?

languagehat — Thu, 11 Nov 2004 19:10:05 -0800

Now that I'm no longer on the corporate payroll, I've discovered for myself the horrors of the American health-care system: to continue my medical and dental coverage through COBRA costs me over $850 a month (for me and my wife). This is far more horrifying than mortgage, taxes, &c., and I don't see how I can continue it (I'm doing it now to avoid the dreaded lapse in coverage). Anybody have suggestions for cheaper health insurance available to the self-employed? (I'll almost certainly be living in western Massachusetts, for what that's worth.)