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Copywriting Basics - Setting Yourself up in Business Tips

Updated on June 17, 2019
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Prachi has been working as a freelance writer since 2012. When not writing, she helps people with web designing and development.

In this article, we will change our perspective slightly and look at the administrative and financial aspects of setting up as a freelance copywriter.

We start by examining why it's so essential for copywriters to be businesslike in every way. We look at the main types of business organization - sole trader, partnership and limited company - and consider which of these may be most appropriate for your business. We go on to examine the pros and cons of working from home, so you can assess whether you will be suited to this and know what to expect. And we consider how to create the right 'image' for your business through your choice of letterhead, business name, and so on.

The article then turns to financial matters. We look at tax, VAT and National Insurance - three things all self-employed people must know about, even if they aren't exactly most people's favorite subjects. We discuss setting fees and raising invoices and set out a basic system of financial record-keeping you may be able to use when starting out. Finally, the article looks at the various sources of business help that are available to you, both free and paid-for.

WHY COPYWRITERS MUST BE BUSINESS-LIKE

Even if your copywriting is to be only part-time, it's important to understand that as soon as you start earning money from your work, in the eyes of the law you will be running a business. To avoid headaches later, it is important to take a responsible attitude towards this from the beginning.

In the broadest possible terms, any regular activity from which you make a profit (i.e. the activity brings in more money than it costs you to operate) will be viewed by the authorities as a business, with implications for tax, National Insurance, VAT, and so on. We will look at these topics in more detail later in the article.

It is, however, worth emphasizing now that setting yourself up as a business will offer a number of benefits for you. For one thing, if you are trading as a properly structured business, you will be able to off-set any business-related expenditure from your income for tax purposes (in other words, you will be able to deduct these expenses from your income before any tax is charged on it). This could include items such as stationery, postage, telephone and Internet costs, reference books, business-related motoring expenses, and so on. If you are working from home you may also be able to claim a portion of your household bills. This is something your accountant - to be discussed later - will be able to advise you about.

And there is one further reason for setting yourself up as a proper business. As a copywriter, you will be offering your services mainly (or exclusively) to other businesses. And they will naturally expect you to be business-like yourself.

TYPES OF BUSINESS ORGANISATION

Having - we hope - convinced you of the desirability of setting up your business properly, we need to say a few words about the different types of business organization. There are three main options, as follows.

Sole Trader

This is by far the simplest form of business organization. Basically, as a sole trader, you ARE your business. Any profit the business makes counts as your income, and you will be held personally liable for any losses. Being a sole trader does not mean you cannot employ other people or use a trading name. It simply means that you are the only owner of the business, and have complete control over everything associated with it.

No legal formalities are required to set up as a sole trader, and it is by far the most popular option for people starting in business for the first time. Setting up as a sole trader has many advantages: as mentioned above, it is simple and cheap; all the profits belong to you personally, and you will have great freedom of action. If you want to take out a loan to buy a computer, for example, there will be no-one else to argue with you about the decision.

Many people operate very successfully as sole traders for many years and see no reason to change. As your business grows, however, some of the drawbacks of operating as a sole trader may become apparent. In particular, as your turnover increases, so will the amount of money you have tied up in the business. If you are a sole trader, all of this will be at risk if your business suddenly takes a downturn. Furthermore, the business is likely to be heavily dependent on your continuing good health (and if you and your family depend on your income from the business, you should certainly ensure against incapacity to work due to accident or illness). There can be tax advantages to other forms of business organization, especially as your turnover increases. And finally, the time may come when you wish to think about moving to specialist premises or taking out a business loan. In these circumstances, making the necessary arrangements may be more difficult if you are still a sole trader. For all these reasons, as their businesses grow, many businessmen and women consider changing to one of the other forms of business organization: a partnership or limited company.

Partnership

In a partnership, there are two or more owners. They divide the profits between them and also share liability for any debts that arise. Partnerships are common in all fields where personal service is involved. Many professional practices such as accountancy, law, and medicine are organized in this way.

A great advantage of a partnership is that there is usually more money available to be invested in the business. The worries and responsibilities are shared among more people and, of course, there are more people to contribute to the business's success. Everything does not depend on one person. If one partner is ill, or just wishes to take a holiday, the whole business will not come grinding to a halt. A big disadvantage of a partnership, however, is that if it fails you can be called upon to pay all the debts of the partnership. This includes the debts of your partners if they cannot pay their share - even if the debts were incurred without your knowledge. For this reason, if you are contemplating entering into a partnership, it is important that you have the utmost confidence in your partners' honesty and integrity.

There are stricter legal requirements governing partnerships, and this means more rules concerning how you organize and run the business. Responsibility for decision-making will be shared between you and your partners, thus also reducing your freedom of action, and perhaps leading to disagreements. If you are thinking of running your copywriting business as a partnership - even with a close friend or spouse - you should certainly take legal advice first.

Limited Company

In a partnership, the responsibilities and risks of running the business are spread among the partners; but even so, if the business fails each partner will be held personally liable for all the business's debts. For this reason (and others), many larger businesses opt to become limited companies.

In legal terms, a company consists of a group of individuals who put their money together to make a 'joint stock' of capital. The people who put up the money are called shareholders. In exchange for their money, they own a share of the company and expect in due course to receive a share of its profits.

The shareholders are also called 'members' because they are part of the company, but the company is a legal entity quite separate from the members who own it. In law, a company is regarded as an individual in its own right: it can make a profit or loss; it can be held responsible for the actions of its employees; it can be sued; and, if the worst comes to the worst, it can go bankrupt (though in the case of companies this is called going into liquidation).

The great advantage of this form of organization is that members of the company are protected from being held personally responsible for the company's debts. If the company cannot meet its obligations then it may have to go into liquidation, but at least the members of the company will not have to sell their homes and other personal assets to pay off all the company's liabilities.

In addition, operating as a limited company can have tax advantages: as a company director you can draw a salary from the company, on which you will pay tax and National Insurance in the normal way; but any remaining profits which you do not draw will be regarded as the company's own income and taxed as corporation tax, probably at a lower net rate. Finally, operating as a limited company can have advantages in terms of giving your business a professional image.

For most copywriters when they are starting out, the sole trader will be the preferred form of business organization. If, however, you are considering setting up as a partnership or a limited company or changing your business to one of these structures, we strongly advise consulting a lawyer first.

RELATED CONTENT: WHAT ARE THE PROS AND CONS OF WORKING FROM HOME

YOUR BUSINESS NAME AND IMAGE

As we have said on various occasions in this course, an important aspect of a copywriter's job is helping to communicate the right image for a company. And, of course, that is important for your business as well. If the image you project is amateurish or unprofessional, even with the best-honed copywriting skills you will have a hard time attracting clients.

Various things contribute towards your business image, but for potential clients especially two things they are likely to see very early on are your business name and your letterhead. We will look at each of these important items in turn.

Your business name is a decision you will need to make before you start trading (although you could change it later if necessary). An obvious possibility for a one-person business is simply to use your own name. This alone, however, tells people nothing about what you do. Many businesses take advantage of this opportunity to explain their activities as well. A simple approach would be to use your name and add a word or two about the business; for example, ‘Britney Reeves Copywriting Services' or 'Britney Reeves - Freelance Copywriter'.

You can also use your business name to project a sales message. For example, one copywriter we know uses the business name Word Wright, while another calls himself Top Copy Guy. Names like these use wordplay to help the writer concerned project a snappy, creative image.

It's best to avoid choosing a very long name, as people will have difficulty remembering it. Another reason is that you will have to answer the phone in your business's name. Saying ‘Michelle Jones Complete Copywriting and Editing Services' twenty times a day could soon have your tongue in knots! A simple, easy-to-pronounce name, no longer than three or four words, is usually best.

There are some words you may not use in your business name without official clearance. If you are in any doubt about the legality of the name you wish to use, a solicitor should be able to advise you. In general, however, this is unlikely to be an issue for copywriters.

Finally, you should try hard to avoid giving your business the same name as another that is already trading. If the other business thinks you are using their name to cash in on goodwill they have built up with their own customers, you could end up in court accused of 'passing off'. This could happen even if you copy the other business's name unintentionally. The local phone book should reveal whether another business in the area is already using your proposed name, and a search on the Internet will provide additional backup.

Apart from the business's name, another important contributor to your image is your letterhead and logo (if you have one). Your letterhead is, literally, the heading that you use for your letters, and it is likely to shape the first impression a potential client gets of your business. Just as with choosing your business name, therefore, you should give careful thought to the design of your letterhead.

Letterheads are usually printed on white paper. Tinted papers, such as cream and pale blue, are also popular but maybe a little more expensive. Weight of paper is usually measured in grams per square meter (gsm). Eighty gsm is about the minimum for letterhead, and if you want your image to be an up-market one you may prefer to use a weight of 100 gsm or more.

One other decision you will need to make concerns about the color of the printing. Black is cheapest and photocopies well. Full-color letterheads can look impressive, but cost more to print. If you want color on your letterheads, consider using just one or two colors, perhaps on tinted paper to give the effect of extra color. Finally, you can, of course, design letterhead on your home computer and print it out either in color or black-and-white. Modern word processing and desktop publishing programs can give excellent results, but you may need to spend a little time experimenting in order to get a finished effect you like.

Your letterhead will need to include most or all of the following:

  • your business name
  • your address
  • your telephone number
  • your mobile number
  • your fax number
  • your e-mail address
  • your website URL

Note: If you are using a business name other than your own, it is customary to include your own name as well - e.g. at the foot of the page, 'Principal: Harry Branson' or 'Managing Director: Emily Johnson'. This helps people who may be contacting you for the first time by giving them a name they can ask for. Limited companies are required by law to provide a range of information on their letterhead, including company registration number and country of registration.

One other thing you may decide to include on your letterhead is information about the business and/or an advertising slogan. For example, you could include details about the range of services you offer, and a short sales message: 'Putting Words to Work', 'Making Your Copy Right', or whatever.

Your letterhead may also include a logo. This is a symbol or emblem you hope people will come to associate with your business. Large companies spend sizeable amounts designing and publicizing their logos, and there is no doubt that they can make a valuable contribution to a business's image. For small, home-based businesses logos are probably less useful. But if you have a good idea for one, by all means, use it if you can. The present author, for example, has on his letterhead a stylized typewriter image originally obtained from a copyright-free artwork disk.

If you can't, or don't want to, design your own letterhead, most printers will do this for you, or you may wish to commission a graphic artist or designer. It should be possible to adapt your letterhead for use on business cards, 'with compliments' slips, invoices, your website, and so on. The overall aim is to create a clear, distinct identity for your business in people's minds so that whenever they see the name, letterhead or logo, they will know instantly to whom it refers. This is part of what large companies call their corporate image. Even if yours is just a one-person home-based business, there is no reason why you cannot do likewise!

TAX, NATIONAL INSURANCE, AND VAT

As Benjamin Franklin famously observed, there are only two things any of us can be sure of in this life: death and taxes. As a self-employed business person, it will be your responsibility to keep records of your business income and expenditure so that you can declare them to the authorities, and in due course pay tax on them.

A little later in the article, we will reveal a simple method for keeping track of your income and expenditure. It is, however, worth emphasizing for the benefit of those who may not have been self-employed before that, while all your business income must be declared for tax purposes, you can set against this any expenditure directly related to your business. This will include obvious things like stationery, postage, photocopying, bank charges, phone bills, and so on. In addition, you should be able to claim the costs of any journeys related to your work, including visits to clients, professional advisers, the bank or post office, and so on. Should you decide to join an organization such as the National Union of Journalists, you can claim their membership subscription. You can also set against tax the cost of any business-related training you undertake - including, naturally, the cost of this course.

Finally, if you are working from home, you can claim a proportion of your household bills (gas, electricity, etc.). The latter may have implications for your liability to Capital Gains Tax when you come to sell your house, however, so it would be worth speaking to an accountant about this first.

The amount of Income Tax you have to pay depends on a range of factors. Once your earnings in any year exceed this, you start to pay tax at whatever may be the going rate. Note that if you have another full-time or part-time job this may well use up your tax-free allowance, and in that case, you will pay tax at the appropriate rate on all your (net) freelance earnings.

National Insurance

As a self-employed person, you will also be responsible for paying all of your own National Insurance contributions (those in conventional jobs have contributions made by their employer as well).

Value Added Tax (VAT)

If your taxable turnover (as opposed to net profit) exceeds a certain level at the end of any twelve-month period, you are obliged to register for VAT. Once registered, you will then have to charge VAT at the current rate to your clients and pass this on to the local VAT office at regular intervals.

Many self-employed people attempt to postpone VAT registration because of the extra paperwork it entails. However, registration can have some advantages. Although you have to collect VAT from clients, you can also reclaim the VAT that you pay on business supplies.

SETTING FEES AND RAISING INVOICES

As a self-employed copywriter, how to price your work will be one of the most important decisions you have to make. Charge too much and you will struggle to attract clients; charge too little, and you could end up unable to cover your bills.

Our recommended strategy for pricing is based on working out your target hourly rate. Start by deciding the annual income you want to aim for, then calculate the number of hours you will be able to charge to clients during the year (obviously, this will be an estimate). By dividing the former figure by the latter, you will come up with the amount you need to charge clients per hour (on average) to achieve your target annual income.

Bear in mind that you will not be able to spend every hour of the day on chargeable work. Sometimes, inevitably, will have to be devoted to tasks such as book-keeping, marketing, administration, and so on. Typically, as a self-employed individual, up to a quarter of your time may need to be spent on tasks that are not immediately chargeable to a client.

You also need to remember that out of your gross income you will need to pay certain business-related costs ('overheads'), such as phone bills, postage and stationery, Internet access, accountancy, and other professional fees, business-related motoring, and so on. Overheads typically amount to around 20% of gross income, although this can vary considerably.

Based on this, you can then calculate your target rate according to the following formula:

So if, for example, you want to aim for an annual income of $25,000 a year, your estimated annual overheads are $5,000, and you expect to accrue 1,500 chargeable hours per year, your target rate would come out as (25,000 + 5,000) ÷ 1,500 = $20 per hour. In practice, you should really aim for a little more than this, to budget for making a profit.

This calculation will give you an hourly rate to aim for, but you should also check how it compares with other similar businesses and the industry norm. You can see the National Union of Journalists' recommended rates for a range of freelance writing tasks (not only journalism) on the following website: http://media.gn.apc.org/feesguide/. It is, however, only fair to say that aiming for 'NUJ rates' may be a bit optimistic for new freelances. Probably a better guide is to see what your fellow copywriters are actually charging. A quick way of doing this is to search for 'freelance copywriter' on the Internet. The results list should include the websites of a number of copywriters, and while not all quote fees on their pages, many do.

If your target hourly rate works out significantly higher than other writers are charging, you are likely to have problems attracting clients, and will need to look at ways of bringing your rate down. Possible options would include working longer hours or reducing your target income or overheads.

Once you have a reasonable (and realistic) target rate, you are ready to work out what to charge clients. In most cases, however, it is best NOT to quote your target rate to clients directly. This figure is for your own use, to guide you when setting fees. There are various ways of charging clients, and in the next section, we look at the options in more detail.

Charging Options

For copywriters, there are two main ways of charging clients: by time (usually a daily/hourly rate), or by word count (usually per 1000 words). The former is common in agency work, while the latter is more characteristic of journalism. In most respects, however, they are interchangeable, and you can use them both, even for different jobs with the same client.

The important thing is to come up with a charging system that works for both you and your client. If you have to deliver a document of a set length but aren't sure how long it will take, a word count fee might be preferable. On the other hand, if you are doing regular work for a client, such as writing press releases or editing a newsletter, an agreed daily rate could be the better option.

If you are unsure, you could offer your client a choice of which charging method he prefers. Clearly, though, you will need to ensure you are quoting on a roughly like-for-like basis using each method.

Another option that may work in some cases is to quote a flat fee for each job. You can base this on your target hourly rate and/or your rate per 1000 words. Try to build in a 'safety margin' in case the job turns out to be more time-consuming than you anticipated.

And finally, if a client has variable amounts of work for you, you could try to negotiate a retainer. This is a regular fee paid by a client to ensure your continuing availability to work on his behalf. You might, for example, agree to set aside one day a week for your client in exchange for a suitable fee. This has the attraction that you will still be paid even if the client has no work for you, but of course, it means you must be careful not to over-commit yourself in case the client suddenly gets busy again.

Invoicing

Normally clients will expect you to invoice them for work completed. An invoice, for those who may not know, is simply a bill for services rendered.

As soon as a job has been completed to your client's satisfaction you should submit your invoice. In some cases, this may go directly to the client himself, but in others, it will need to be forwarded to the company's accounts department, which may be at a different address. Be sure to confirm this with your client.

There is no great mystery about producing an invoice. Use a single sheet of headed notepaper (if you have this), or a sheet of plain paper with your name, address and phone number clearly marked. At the top left put the publisher's name and address and the date. Under this, centered, write 'Invoice W/001' (or whatever numbering system you adopt). Below this, write a brief description of the job you have done, and the fee which is now due. To avoid misunderstandings it is a good idea to state also to whom the cheque should be made out. An example invoice is shown here.

Sample Invoice
Sample Invoice

As you will see, the sample invoice asks for payment in 30 days; this is pretty standard in business, although unfortunately the 30-day limit is not always adhered to in practice.

The invoice also includes a space for your signature. This is not essential on an invoice, but you may find some clients prefer it. Keep a record of all your invoices, including the amount, the date when they were issued, and the date payment is received. If you have not received payment after a month or so, write or phone with a polite reminder.

Increasingly nowadays clients prefer to pay invoices electronically, typically using the BACS system where payment is made directly into your bank account. This is more secure and also cheaper for companies to process. If your client prefers to pay suppliers in this way, you will need to provide your bank account details to them. The sample invoice can also be amended, removing the line regarding whom the cheque should be made payable to.

FINANCIAL RECORD-KEEPING

As a self-employed person, it will be important for you to keep accurate records of your business income and expenditure. This will help you keep track of how your business is doing, and make life easier when it comes to preparing your annual accounts.

You may be relieved to know that there is no need to set up a complex double-entry book-keeping system. A simple system such as the one described below should be more than adequate when starting out. It uses an analysis book, available from all office stationery suppliers. These are basically large, hard-backed books, pre-ruled with narrow horizontal lines and up to thirty (or more) vertical columns. You can use one book for income and another for expenditure; or, to economize even further, use the front of a book for expenditure and the rear for income.

How does the system work? As the below table shows, the first column is used for the date of each item, and the second for a brief description of the item itself. In the case of income, the next column is then used to record the amount of the item, while the columns to the right of this are used for income in particular categories. The choice of categories is up to you: a simple choice might be writing, editing and sundry income (money from any other source). Your account book might then look a bit like the one on the next page.

Record of Income

Date
Client
Total
Writing
Editing
Sundry
1/3
Stones
400
400
 
 
5/3
GPI
560
 
560
 
14/3
All Data
350
350
 
 
23/3
Ultraline
50
 
 
50
24/3
GPI
100
 
100
 
30/3
Stones
250
250
 
 
 
TOTAL
1710
1000
660
50

As you will notice, each item is entered twice (though this is not the same as double-entry book-keeping!). By totaling up all the columns at the end of each month, you will be able to see the total you have earned that month, and the amount contributed towards that by the different types of income. If you keep a running total from one month to the next, you will be able to keep track of your progress throughout the year and will have the figures already for your end-of-year accounts.

Your record of expenditure would look similar. Again, a (simplified) example is shown below.

Record of Expenditure

Date
Item
Total
Stationery
Postage
Phone
5/3
Stamps
10.00
 
10.00
 
8/3
Phone
60.00
 
 
60.00
17/3
Envelope
0.45
0.45
 
 
25/3
Stamps
5.00
 
5.00
 
25/3
Folders
8.25
8.25
 
 
30/3
Stamps
20.00
 
20.00
 
31/3
Labels
5.95
5.95
 
 
 
TOTAL
109.65
14.65
35.00
60.00

This method of record-keeping helps you keep track of what you are spending in different categories. For example, in the record above, you can see at a glance that you have spent a total $35 on postage during March. For practical purposes, there would need to be a few more categories of expenditure other than those shown above, including training, travel, insurance, professional fees and subscriptions, bank charges, and - not least - money you have withdrawn for your own use (usually known as drawings).

To claim an item of expenditure against the tax, you should if possible get a receipt for it. It would, therefore, be a good idea to have an extra column on the left-hand-side for receipt numbers. You can number receipts consecutively, starting again from 001 each year. Mark the reference numbers on the receipts as well, so that you have an easy way of identifying which item of expenditure each receipt refers to.

One further refinement is that, instead of the single column for 'Total', you might instead have two columns: one for items paid for out of your business account (by cheque, standing order, etc.), and the other for items paid for in cash. This will make life easier when checking your records against your bank statements.

Although the above is a simple system, it contains all the information which would be required to draw up a set of accounts. For many years the present author has used a system not much different from this for keeping his own financial records.

It is, of course, easy to adapt the system described here to a computer, using a spreadsheet program such as Microsoft Excel. Keeping your books on a computer has one great advantage: the computer can be programmed to do all the calculations for you (e.g. adding up columns and calculating running totals). This can lead to considerable savings in time and effort.

WHERE TO GET MORE HELP

As the preceding sections have indicated, running your own business demands a range of knowledge and skills quite apart from those required to deliver your copywriting service. As a business owner, you inevitably have to be something of a 'Jack of all Trades'. This means not only exercising a broad range of skills but also recognizing situations where it is necessary to seek advice and assistance from outside advisers. This section will highlight a number of advisers whose help you are most likely to find useful.

Accountant

Accountant
Accountant

Your accountant is likely to be your single most important business adviser. Among the wide range of services available from accountants are the following:

  1. advice on the most appropriate structure for your business
  2. advice on possible sources of additional funds
  3. advice on what books (financial records) to keep
  4. preparing financial accounts and tax returns
  5. liaising and negotiating with the tax authorities
  6. advice on future financial planning to minimize your tax liability
  7. general financial advice, for example with regard to loans and subsidies, grants, pension planning, and so on

In addition, for small limited companies, an accountant will undertake work concerning the formation of the company, the issue and transfer of shares, annual returns, auditing the company accounts, arranging Annual General Meetings, and general company secretarial work (often in conjunction with a solicitor). Many small companies, as mentioned earlier, also use their accountant's address as their registered office.

A good, experienced, professional accountant may also be a valuable source of more general management advice, particularly for sole traders who may otherwise feel rather isolated when making decisions on the running of their business.

Of course, it is not essential to engage an accountant when first starting out, particularly if you have some knowledge of book-keeping and accounts. On the other hand, you will almost certainly need help from an accountant at some stage, especially regarding such matters as VAT registration and dealing with the taxman.

The first step in choosing an accountant is deciding what you want from him (or her). Not every accountant will offer every sort of service. For example, large city firms are unlikely to be set up to work with small one-man businesses, while a sole practitioner may not have the expertise to help with raising capital or setting up a limited company.

Large accountancy firms serve mainly medium to large companies, and their fees are generally high. For an individual starting a home-based business and wanting someone to prepare their accounts and provide general financial advice, a partnership or sole practitioner will often be the best choice. There is a good argument for choosing a partnership rather than a sole practitioner, as there is always a chance the person concerned will fall sick, move away or even die, leaving you without anyone to handle your accounts. With a partnership, at least if one partner moves on there will be someone else in the business to take over.

Before choosing an accountant, ask around for recommendations, e.g. from other people you know who run their own businesses. Contact a number of accountants, whether or not they have been recommended to you, and ask about their terms. Ask for details of existing customers who would be willing to provide references, and get in touch with these people. Finally, bear in mind that anyone can call himself an accountant, so check that the person you wish to appoint has the appropriate professional qualifications.

How much an accountant will cost depends on the type and amount of work involved, and this can be difficult to predict in advance. Nevertheless, most accountants will give you an estimate. For a straightforward service involving the preparation of accounts and occasional financial advice, most will charge you a single annual fee.

Many accountants spend much time and effort just sorting out their clients' financial records, and the cost of this inevitably has to be passed on. It, therefore, pays to set up a book-keeping system your accountant is happy with, and keep it neatly and accurately. An hour of the accountant's time spent discussing what books you are going to keep now may save him having to spend many hours later sorting through your records.

Solicitor

Solicitor
Solicitor

Whilst most businesses require the services of an accountant on a fairly regular basis, assistance from a solicitor will generally be needed only when a specific problem or query arises. Situations in which you might need the advice and help of a solicitor include:

  1. deciding the most appropriate structure for your business
  2. drawing up a partnership agreement
  3. forming a limited company
  4. legal aspects of employing staff
  5. health and safety requirements
  6. collecting unpaid debts

Similar principles apply when choosing a solicitor as with an accountant. Solicitors specialize in different aspects of the law, and you need to choose one with expertise in industrial and commercial matters rather than a specialist in, say, criminal or family law. Most solicitors operate in partnerships, and often there is one partner who specializes in business matters. You should aim to meet this person and satisfy yourself that he has the experience and knowledge you require. As when choosing an accountant, it is wise to take up references.

Whereas your accountant may charge you an annual fee, a solicitor is likely to charge you for each job you want doing. Before engaging a solicitor, you should ask him for an estimate of costs. If the solicitor says that this is not possible because he does not know how long the job will take, ask him for his daily rate. Many solicitors will quote a package price for certain jobs such as forming a limited company.

To keep costs under control, it is important to give your solicitor clear instructions and ask him to keep you informed of the costs incurred in any ongoing action. In disputes between businesses, in particular, legal costs can quickly mount up.

Other Sources of Help

In addition to the main advisers described above, there is a range of others you may be able to call upon as circumstances dictate. The main ones likely to be relevant to home-based businesses are listed below.

1. Bank manager or bank business adviser

You might not immediately think of your bank manager or bank business adviser as one of your professional advisers. That is because, unlike most other advisers, you do not pay directly for their services (you pay indirectly, of course, in the form of bank charges). Nevertheless, such individuals can be a source of advice on a wide range of business matters.

As someone with close knowledge of what other local businesses are doing, the manager or business adviser will be well placed to comment on your plans and make suggestions on how they could be improved. As an accountant, he should be able to advise you on many of the financial and managerial aspects of your business. Many banks also offer advice on matters such as insurance, investments, pension planning, and so on.

A bank manager or business adviser is not a substitute for an accountant, however. For one thing, while your accountant will give you objective, impartial advice, the bank manager's advice is bound to be influenced to some extent by the fact that he sees you as a client and source of revenue for his bank. In addition, you may not always wish to discuss business problems with someone from your bank, in case (for example) this influences their decision on whether to give you a loan.

Finally, it is worth noting that while some banks still offer business advice at branch level, in other banks services to businesses have been centralized in large call centers. If your account is held with such a bank, you will lose the advantage of local knowledge that a manager or business adviser in branch can provide. Before choosing a business banking provider, therefore, this is certainly something you should consider.

2. Insurance broker

Every business needs insurance. Its basic purpose is to reduce the risk of calamitous loss if some unforeseen misfortune befalls you or your business.

An insurance broker will advise you on the most appropriate insurance for your business. He will negotiate on your behalf with insurance companies to arrange the best deal possible. Insurance is a highly specialized area, and a professional insurance broker can be of great assistance in cutting through the jargon and choosing among the many types of policy and cover on offer.

Insurance brokers do not normally work for any particular insurance company and so, in theory, will give you independent advice. However, they are usually paid by commission, so it is in their interests to sell you as much insurance as possible. When dealing with insurance brokers, therefore, it is important to weigh up the advice you are given against how much you can sensibly afford to spend.

3. Website designer

Nowadays most copywriters have websites as a means of advertising themselves and communicating with clients and potential clients. It is actually not too difficult to produce a basic site yourself if you have some degree of computer knowledge. For a more professional look, however, you may wish to consider engaging a professional website designer. Such individuals advertise in local papers and Yellow Pages (look under Internet Services). They will normally quote you a set fee (starting at around $300) for designing your website and installing it on the web. You will have to pay a further sum to have your site regularly updated, although you may be able to do some of this yourself.

4. Business consultants and advisers

There is a huge range of specialists who will offer advice on various aspects of your business. Probably the most relevant to the new small business is the free advisory services set up and operated by government agencies in the hope of encouraging business development and creating employment and wealth.

Using Your Advisers

To make the best use of your professional advisers, bear in mind the following points:

  1. In the end, it is still you who will have to make the actual decisions. For example, you must decide whether to sue a client who has neglected to pay you - your solicitor can advise you on the procedures.
  1. Most professional advisers charge according to the amount of time they spend working for you. To make the most economic use of their services, therefore, you should do as much preparatory work as possible. With your accountant, for example, you should ensure that your books are properly completed and balanced before passing them over to him to produce your final accounts.
  1. Your professional advisers are also in business to make money. In choosing your advisers you should, therefore, apply the same care and judgment as to when you are buying any other product or service. This includes getting estimates of fees and 'shopping around' before committing yourself.

With an adviser, it is best to keep the relationship on a friendly but professional level, with each party having respect for the other's position. If you do not feel comfortable with an advisor or do not feel you are getting the service you expected, then make arrangements to change to someone else.

Good advice is, however, well worth paying for and often results in savings or extra income worth many times the fees charged. Advisers' fees, incurred for advice solely in connection with the business, are of course allowable as a tax-deductible item of overhead expense.

CONCLUSION

In this article, we discussed the administrative and financial aspects of setting up a home-based copywriting business.

We started by examining why it is so essential for copywriters to be business-like. We looked at the main types of business organization - sole trader, partnership and limited company - and discussed which of these might be most appropriate for your copywriting business. We went on to examine the pros and cons of working from home, to ensure that you (and your family) know what to expect. And we considered how to create the right 'image' for your business through your choice of letterhead, business name, and so on.

The article then turned to financial matters. We looked at tax, VAT and National Insurance, three things all self-employed people must know about. We discussed setting fees and raising invoices, and set out a basic system of financial record-keeping to use when starting out. Finally, the article looked at the various sources of business help that are available to you, both free and paid-for.

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