Do Freelancers Need to Have an LLC/Corporate Entity?

Over on the Dr. Freelance Jake Poinier answers a reader’s question about LLC/corporate entities for freelancers.

My own view on this is that even if you don’t form an entity (initially or ever), at least acquire an EIN (also known as a Federal Tax ID Number) just for your business activities so you don’t end up giving out your Social Security Number (SSN) to clients…

Getting an EIN was one of the first things I did because there was no way I was going to be handing out my personal SSN to clients. And doubly so when I’m doing information security consulting for them. 🙂

It was a pretty simple online process a few years ago and I even got it instantly (which was good because I needed it for a new client request that day)! It looks to be the same straightforward online application process to get an EIN from the IRS these days. Anyhow, go see what else Jake has to say on the LLC/incorporating topic and decide what makes the most sense for you. (The specifics of this are US-centric, but the principles apply elsewhere I imagine.)

What are you afraid of?

Alan Weiss writes in the Million Dollar Consulting Mindset newsletter:

Too often our personal “driving force” isn’t composed of our strengths and passions but rather of our fears. We are afraid to confront an issue; to start a conversation; to pick up the phone; to try something new. We are “driven” in another direction entirely, to procrastinate, make excuses, abandon a plan, endure a poor relationship.

As the same poles in a magnet repel, we are “repelled” in a different direction, antipodal to our intended goals. “Fight (our fears) or flight” results in flight. This makes us not only unsuccessful, but also uninteresting.

As with any problem, to remove it we must find the cause. And in this case the cause is almost always an ego problem, poor self-esteem, “baggage” being borne for no rational reason at all. We fear rejection, we fear a “loss,” we fear ridicule, we fear “defeat,” we fear fear itself. Our fears are, of course, irrational, because they create a far worse future than any pain in confronting the obstacles would actually produce.

How one person provides high quality support to 4 million application users

Brian Cervino on how he supports Fog Creek Software’s four million strong user base for Trello:

As we pass four million Trello members I thought it would be a good time to share with other small software development teams the fact that providing high quality support doesn’t have to be expensive or impossible.  This includes a one business day initial response window for all newly created cases and making sure to follow through on all open cases until resolution.  With just a few tools and some dedicated time, it is possible for even just one person like myself to support our entire member base.

Pretty damn impressive.

Is “sales” a dirty word?

Justin Jackson writes:

“Making sales” feels kind of sleazy, doesn’t it?

For a lot of us, our feeling about sales stems from a bad experience with a salesperson.

The problem is, most salespeople are selling someone else’s product; they’re not directly invested in the product itself. A car salesman is a good example: he doesn’t design, build, or distribute the cars, he’s just responsible for moving them off the lot. This can lead to the kind of predatory behavior that we dislike about salespeople.

But you’re different.

You’re not selling someone else’s product.

Sales and marketing are very difficult topics for a lot of solo consultants and freelancers (and entrepreneurs generally). So much so that it often kills their business aspirations (or makes their lives far more painful than necessary during the first few years).

It’s important to unlearn the belief that marketing and sales are inherently bad. (They’re not.) Both are tools, necessary ones at that. How you choose to implement them in your own business is entirely up to you. You can create more cynics… or create more value in the marketplace.

How

Be authentic in your communication with said marketplace.

An advantage most solo entrepreneurs and small businesses have over corporate marketing: it’s easier to be “human” because there is less abstraction between the market and the creator. Take advantage of that strength.

Optimizing Assistance Efforts in the Developing World

Pippa Biddle, in a very frank post on her personal blog, reflects on her assistance efforts in the developing world, beginning with where she started:

Our mission while at the orphanage was to build a library. Turns out that we, a group of highly educated private boarding school students were so bad at the most basic construction work that each night the men had to take down the structurally unsound bricks we had laid and rebuild the structure so that, when we woke up in the morning, we would be unaware of our failure. It is likely that this was a daily ritual. Us mixing cement and laying bricks for 6+ hours, them undoing our work after the sun set, re-laying the bricks, and then acting as if nothing had happened so that the cycle could continue.

Basically, we failed at the sole purpose of our being there. It would have been more cost effective, stimulative of the local economy, and efficient for the orphanage to take our money and hire locals to do the work, but there we were trying to build straight walls without a level.

I’ve had similar inklings in the back of my mind on this topic when it comes to volunteer efforts and philanthropy, but never sat down to think it through fully. Pippa’s post already has helped further my thinking it this area. I thank her for posting it.

It’s not enough to want to do good. The world is full of well intentioned, yet wildly ineffective, people. Worse, even good intentions can have negative consequences. This isn’t cynicism. Quit the opposite in fact. To have an impact in a desired way, one must develop an effective strategy and be willing to tweak it along the way.

At the same time, there is no shame in trying things then using that new information to adjust our strategy. We’re always working with imperfect information. It’s how we react and adjust along the way that determines whether we end up where we want to be or have the impact we want to have.

Thinking a bit more strategically when it comes to our own volunteering, philanthropy, and similar efforts can only be constructive. Same goes for optimizing our approaches to problems that will continue to persist long after we’ve left the scene.

Of course, as with many things, analyzing our own situation is never quite as simple and obvious as we’d like it to be. At the end of the linked article there are additional thought provoking comments from others. One comment from Jeff Allen, directed at Pippa, stood out to me in particular:

When an emergency (man made or otherwise) hits a population, and it overwhelms that local capacity that you say should have been building libraries or caring for kids, then people are more than happy to work together with outsiders to get their community up and running again. I’m talking about emergency, short term humanitarian aid. It requires special skills which you are developing from your experiences so far. Keep learning things, useful things that people will need your help to learn because they won’t have the time to learn it “right”. And keep practicing the humility you have (it’s a rare gift). You’ll need a lot of that.

This.