And of course, it helps to be lucky!

I was speaking this morning with a friend who has hit a rough patch - she has spent a year building the concept for a new start-up company, only to have the (financial) rug pulled out from under her just as they were ready to launch their product. She has been following my adventures as a consultant, and wanted to know why I thought I was successful (so far).

I had been thinking about it, and for me, it comes down to two things:

1. Be good at something, and
2. know lots of people.

It doesn't matter how great a network of friends and acquaintances you have, you have to have a skill you can sell. You have to have something you do better than most people, and it has to be something they value and will pay you to do.

On the other hand, you can have outstanding skills, but if nobody knows what you do, you will have a hard time finding work. Every job that I've gotten so far was either from someone who knew me directly, or from a referral from someone who knows me.

And then, you have to be in the right place at the right time - there's always an element of luck. But the more people who know what you do and believe you do it well, the better the odds. And then you have to deliver.

A Wonderful Free Tool for Collaboration

Suppose you are working on a draft of a document with someone else. The typical approach is to write in Word and send the document back and forth via email, making changes as you go. That's OK, but there's a tool I like better: Google Docs.

With Google Docs, you create a document, or a spreadsheet, online in your web browser, then you share it with one or more collaborators. Each of you can edit the document and view it online. You can even edit the same document at the same time, for example while talking on the phone or chatting via IM, and both see each other's changes at the same time!

This week I was working on a proposal for a new job and I plan to work with a subcontractor. I created the document in Google Docs, and when she had time she was able to read it and add changes and comments. Google Docs can export your document into several formats - I exported it into Word and emailed it to the client. I also prepared a budget and expense worksheet that I shared with my sub.

And of course, like most things Google, Google Docs is free - all you need is a Google account.

If you are working on a long, complicated document or a highly sophisticated spreadsheet, you may run up against the limitations of Google Docs, but for 95% of what it do it works great. And like other online tools, your work is available to you anywhere you have an Internet connection - you can even edit a Google Doc on your iPhone. (And you can edit offline, too, if you install an add-on called Google Gears.)

Let me know what collaboration tools you use in your work!

What Do I Have in Common with a 30-Year Old ex-Tagger?

There's a fascinating article in the Los Angeles Times today about Mister Cartoon, a very successful (freelance) commercial artist. I was really impressed by this comment at the end that represents the attitude that led to his success. Most of us will never be as successful as he is, but we can all learn from his determination, dedication, and focus:

"I don't expect a trophy or a cookie or a pat on the back," Cartoon said. "I made a decision to change my life and help my family."

That decision resulted in the clarity to pursue his ambitions. But to hear the artist tell it, making good on those plans is also a matter of following the rules.

"Am I gifted or especially talented?" Cartoon said. "No. I got all this through hard work. Through respecting my old man. From taking direction from people. From painting when everyone else was asleep. I just found something I really love and practiced at it my whole life."

David Pogue on Reqall reminders

I was very interested in Reqall described today by David Pogue in the NY Times. It's a system that lets you "phone in" reminders to yourself and others, keeps track of them, and helps you to remember what you need to do. As soon as I get a chance, I'm going to give it a try.

I've been using Toodledo.com for my to-do list - it's pretty good, but it certainly sounds like Reqall can do some very useful things that Toodledo doesn't do.

What do you use for a to-do list/reminder system?

Receipt Magic

Thanks for all the nice comments on the blog - please keep them coming, they are very motivational for me!

As a promised last week, now that we've looked at generating invoices, it's time to talk about dealing with expenses, or more specifically, those pesky receipts.

I hate dealing with receipts. The first time they asked me in the Apple Store if I'd like to have my receipt mailed to me, it made my day. But most of the time paper receipts are a reality - you need to keep them as documentation, and somehow you need to turn them into a record of your expenses if you want to really know how you are doing.

I've tried scanning receipts myself, but it's slow and painful, and then you have to do something with them - at least put a title on them so you can find them later. OCR? On a faded receipt, with all the different formats that are used? Forget it!

Except that Shoeboxed has figured out how to make it work. How does this sound:

• throw your receipts in a folder,
  
• mail the folder to Shoeboxed,
  
• and they appear magically on line, neatly scanned and accurately converted into real data!
  

I was skeptical, but it works great! You can view each receipt online, and you can download a nice comma-separated file that you can import into a spreadsheet or accounting program. (But later on, I'm going to show you something even cooler to do with them.) I mean, it's not just effective and efficient, it's really kind of fun. (Yeah, I know, I'm a nerd...)

And bonus - it works with business cards too. A couple of times I've been suckered into buying little business card scanners, but they have been way too much trouble to keep using. Shoeboxed does it for you, and based on what I've seen so far, very accurately too. Then you can load the info into your address book.

What does it cost? Depending on how many receipts you have, $10/month and up. For the time this saves and the info you get from it, it's a great investment. And you can try it out free and see if you like it.

You Are What You Bill

I really hit a nerve with the last posting. Hating to prepare invoices and deal with accounting issues seems to be a common affliction among freelancers. Obviously, some of it's just the hassle - as one friend told me, "I'm not a QuickBooks person". Well, I'm not either, that's why it's great to have access to elegant tools like FreshBooks (and several others I'm going to tell you about.)

But perhaps some of it's a bit more psychological - we all question the worth of our work from time to time, and unlike a wage earner, the freelancer has to keep proving it over and over again. It's normal to have doubts. And asking for money risks rejection and disappointment.

When I was about 12, a neighbor asked me to paint a porch for her. I spent all day Saturday and did a really good job. I knew what work like this went for at my house - say, $1/hour - so I figured I'd made 7 or 8 dollars - maybe 10! She looked at the porch and said, "that's great, could you come back tomorrow and paint the other one?" I was thrilled, I was sure I would end up with at least 15 bucks, maybe 20! I came back and painted the other porch, and at the end of a long hot day she said, "good job", and gave me $5.

What could I do? The porch was painted, she was a friend of my Mom's, I took the $5, mumbled my thanks and trudged home, sore and covered with paint. I was $5 richer, but I felt like I'd really been taken. But I learned a lesson - always negotiate the price up front!

Let's assume that you, like me, need to make money when you freelance. If you don't, there are many worthwhile non-profit organizations that would be glad to have the benefits of what you do! But if you are a professional, you should value the work that you do, and expect others to value your work as well. Otherwise, you are sending the message that what you do has no value - and if you don't believe in what you do, why should I?

And that's why it's really important that you set a fair price for your work and bill promptly and accurately and expect people to pay you. I've spent most of my career on the other side of the desk, and I can tell you that if someone has completed a job for me and I don't get a bill, it reflects badly on them. I've got the money set aside, I'm ready to pay, but no invoice. It's not my job to run after you to give you your money. I've never been annoyed by receiving an invoice, but not receiving one can make me quite grumpy.

Someday perhaps I'll be so busy and successful running my business that I'll pay someone else to manage my books and send out my invoices. But really, with the right tools it's so easy and takes so little time, it's hard to imagine when that will come. Trust me, I am a world-class procrastinator. You don't want to know how long some things sit on my to-do list before they finally become irrelevant and I delete them. But I believe in the work I do, and when it's done, I expect to get paid. You should expect no less!

If you don't send bills, you don't get paid

Getting laid off wasn't a total shock - I knew my position was precarious and I'd been looking around for a while and thinking about what my next step might be. I had wanted to own my own consulting business for some time, and had a lot of contacts that I could reach out to. So I was lucky - when I left my job, I started consulting within days and a month later I was taking on as much work as I could possibly handle.

Which, of course, meant I had no time to think about things like setting up a business, accounting systems, invoices and so forth. My first invoices were rather crude documents created in Google Docs. Google Docs is a wonderful tool and I'll write about it later, but it's not the best way to create and track invoices and payments. (Nonetheless, I did get paid! :)

I've been using Quicken for my personal finances for almost 20 years, so of course I know about QuickBooks, but it didn't appeal for me for a few reasons. First of all, I know how Quicken works so I felt I had some idea of how QuickBooks would work, and I was not looking forward to the experience. Second, I had bought a MacBook a couple of years back to use for consulting, and I wanted to be able to keep my records using the Mac - which rules out QuickBooks. (Yeah, I know you can run Windows software on a Mac, but it has major drawbacks.) And I didn't really like the idea that I'd have all my records on my consulting laptop, and if I lost or broke it I would have to go to backups. So for a while, I made do with my Google Docs.

Then, someone told me about FreshBooks. FreshBooks is a Software as a Service (SaaS) program that runs online and lets you create and track invoices. With FreshBooks, you set up your client information and then generate invoices that can be emailed or, if you like, FreshBooks will mail them in a professional-quality envelope for you for a very reasonable price ($1.39, or less in higher volumes). The invoices look clean and professional, you can customize with your logo, and the email service is particularly nice - your client gets an email that points to a customized page that shows their outstanding invoices.

I find the Time Tracking function particularly useful. Some days, I work for as many as three different clients at different times of the day, and FreshBooks has a timecard-like function that lets you enter your work time as well as notes. One of my clients wants the invoices to contain details about what I did each day I work for them, so I enter these notes as I enter my time. As a bonus, there's a free iPhone client so you can enter your hours without even going to the site.

You can always see exactly the dollar amount of your outstanding invoices, and as they get paid you enter this in the program and it tracks them for you. The interface is quite slick, extremely sophisticated and clean. FreshBooks is a model for online software that doesn't try to do everything - it has what a small business, or even a medium size business, needs to do fairly straightforward billing, quickly and simply.

There's a lot more to the program than I'm describing, so I suggest you take a look for yourself. The price is right too - a single consultant with up to three clients can use it for free. Right now, that's me, although I'm going to be sending a bill to a fourth client next month, at which point I'll be paying $14/month for the service.

Some people might have a problem with keeping their financial information on the web site of a software vendor. Certainly there's an element of trust here, and I do make local copies of the information on a regular basis. Some other time, I'll write about my thoughts on using online services such as FreshBooks. I believe that most people are going to come to accept this as a common practice, just as many were wary at one time of entering credit cards for online vendors. And it's great that if I'm out at a client site, and some asks me for a copy of an invoice, I can produce it right then and there whether I have my own laptop or not.

There are a few things about the program that don't work for what I'm trying to do - later on, after some of you have had a chance to try it, I'll post a few tips and tricks I've figured out.

If you do try FreshBooks, I'd be glad if you would use my referral page, since I'll get discounts down the road if you do.

So, how do you bill your clients? What do you like or dislike about your approach? Please write me or post a comment, I'd like to hear about your experience.

If you are generating income, you probably also have expenses, and keeping track of expenses and the receipts that go with them can be a real pain. In my next posting, I'll tell you about a tool that does an amazing job of helping you save time with your expenses and receipts. No, it's NOT a scanner...