Superman quits the Daily Planet! Tips for his new freelance business
Rumour has it that Clark Kent has quit The Daily Planet and will be working for himself from now on as a freelance writer!
He’s no longer bound by an employer’s rules and is free to do his own thing, but this comes at a price - he now has to do everything for himself. There is no friendly finance department to look after his paperwork and pay his salary each month, to make sure he has enough to replace the shirts and suits he’s always tearing off in phone boxes to transform into Superman. The responsibility of keeping his financial records is his and his alone! So, what should Superman do to make sure that his new business will fly up, up and away?
Unlike in the past when Perry White has sent him out to cover certain stories, Clark must now find his own sources, and sell his stories to his own customers.
He must remember to issue invoices to these customers promptly, otherwise they won’t pay him, and that will leave his bank account vulnerable to running out of cash!
He must also decide what his payment terms will be. Will he ask his customers to pay in full, or make a deposit, before he begins his research?
Collect payment from customers
Following on from the last point, it’s also now Clark’s own responsibility to make sure his customers pay him.
Admittedly, he has certain means of persuasion denied to most freelancers, as I’m sure customers would pay up when confronted with an angry Superman unless one of them is a kryptonite collector (in which case Clark probably wouldn’t have dealt with him anyway).
But assuming that he doesn’t want to blow his cover by having his customers guess his alter ego, Clark must make sure that he uses some of the handy online tools available (such as FreeAgent’s automatic invoice reminders) to avoid having customers “forgetting” to pay him.
Open a business bank account
Clark will have to file his tax return with the IRS like anyone else, so he will need to make sure he keeps his business income and costs separate from his personal finances. For instance, when he buys the other members of the Justice League a milkshake, that wouldn’t be part of his journalist work and so he would need to record that as a personal cost.
The best way for him to do that is to have a separate bank account for his journalism activities and use that only for business income and costs - and buy drinks for the Justice League using a personal credit card, or his own cash.
Think about all costs
Previously, Clark has no doubt had to collect up receipts for anything he spent out of his own pocket while travelling on business -- such as a train ticket to track down a hidden fugitive -- and give these to The Daily Planet’s finance team.
He hasn’t had to worry about costs such as paper for the photocopier, or electricity, or heating. Now he will have to cover these, so he needs to make sure that his hourly rate as a journalist is enough to cover all his costs and still leave some over.
He must also make sure that he records all his costs carefully, otherwise his profit will look too high. Not only could this give him a false sense of security, it could also mean he pays too much tax!
Colleague, employee or independent contractor?
The rumour is that Cat Grant will be joining Clark in his new venture.
How will Cat and Clark work together? Will they be co-owners of the business, will Clark employ Cat as a member of staff, or will Cat also start up her own business and work with Clark as an independent contractor?
Clark and Cat need to agree this carefully between them and put together a written agreement to avoid, as far as possible, potential problems in the future in their working relationship.
For example, if Clark thinks that he is going to be Cat’s boss but she thinks she is an independent contractor, their working relationship will fall down almost from the word go!
If you are a freelancer like Clark, make sure you keep on top of your business’s finances and relationships - remember employment can be a safety net in some circumstances!
- You deserve better: why you need to break up with your spreadsheet
- Simple ways to save yourself future Self Assessment stress
- Making Tax Digital consultation response published
- Not feeling (a) fine? You might have a ‘reasonable excuse’ for not completing your tax return
- Don’t be caught out by the Self Assessment deadline!