Common Overhead Costs of a Freelance Writing Business

One of the great things about starting a freelance writing business is that the overhead costs are small compared to many other types of businesses. However, many writers start their businesses focused on getting clients not thinking much about the cost of doing business. Ultimately, that approach catches up to them and makes it difficult to manage their income effectively. Don’t make the mistake of starting your freelance writing business without accounting for your overhead costs. Doing so will let you be strategic about setting your rates to maximize your income from the start. What are the most common overhead costs for freelance writers? Here are some expenses you should account for in your business.

Office Expenses

Most freelance writers work from home but converting part of your home into your office comes with costs. In fact, the IRS agrees and allows you to deduct the costs of your home office from your tax returns. To determine the cost of your office, calculate what percentage of your overall square footage that your office occupies. If, for instance, your office accounts for 10% of your home’s square footage, then you can consider 10% of your mortgage, utilities, property tax, and insurance as part of your office overhead costs.

You may wish to weight household expenses that are primarily used for office differently. For example, if 75% of the time you use your internet connection is for work, then 75% of those costs can be overhead. Similarly, if you add a phone line specifically for your business, then 100% of that expense is a business overhead cost.

Material Costs

Your office computer, furniture, printer, and paper goods are all part of your overhead costs. Some of these may be one-off purchases, while others may be ongoing costs. Don’t forget to factor in the cost of maintenance for any mechanical/electrical items you have.

One material cost writers often overlook is the cost of software access and professional memberships. Your Writers Work one-time, lifetime membership cost is an overhead expense for your business, since it gives you access to tools you need to promote your writing, market your services, and create documents for clients.

Marketing Expenses

You will need to market your services in order to attract new clients. These costs may include things like online advertising, newsletter tools, and website design. Another important marketing cost is business cards to distribute to clients. Marketing expenses can vary from year to year, especially as your business grows. Set an annual budget so you can adjust according to your needs.

Insurance and Retirement

When you work for yourself, you don’t have an employer who will pay for your insurance or set up a retirement account for you. The answer isn’t to do without these things but rather to include the cost in your overhead expenses.

Find a health insurance policy and set up a retirement account in which you can put a percentage of your income. Calculate these costs and then add a percentage of them to the fees you were planning on charging for your work. As a general rule of thumb, your base fee should have a 20% upcharge, which goes to covering the costs of your benefits.

Writers Work gives you a single, cost-effective platform on which to run your freelance writing business for a low, one-time fee, in order to help you manage your overhead costs. Take charge of your business today by joining our freelance writing community!