From Jacci Howard Bear,
Your Guide to Desktop Publishing.
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In the previous exercise we touched on the matter of money. In this exercise I just want to reiterate some of the expenses you'll incur in doing business. This isn't meant to be a detailed lesson in business income and expenses and taxes.

Exercise #2: Money Commitment. Typically your employer takes out taxes before you ever see your paycheck. Most people don't even consider it part of their monthly income because they never get to actually hold that money. Maybe once a year you'll get some of that money back in the form of a tax refund.

The self-employed get all the money then have to pay out part of that income as taxes. And self-employment taxes are generally more than taxes for other individuals. Taxes become a regular bill you'll have to pay throughout the year.

Do this: Take your regular paycheck. Look at the deductions that come out. Double those deductions. Then multiply that amount by however many paychecks you normally get in a year (52 if your check is weekly, 12 if you get paid monthly). That's what you could end up paying in taxes each year. In the US the self-employed pay quarterly taxes so divide that tax bill by 4. That's a bill you'll have to pay every 3 months on top of your other regular bills.

It's fun to think that you can write off cool software, books, and pens and paper as business expenses when you are self-employed. But remember, first you have to pay for those items upfront and then you don't get the cost of that software or that ream of paper back at tax time. All you do is get to pay a little bit less in taxes. In the end that cool stuff for your business may end up costing you less but it isn't free and you still have to be earning enough money to afford it in the first place.

Do you have enough money saved right now (or a plan to start saving money) to purchase everything you need to start doing freelance work? Chances are you won't be getting paid by clients for another month or two or three.

Do this: Make a list of items you'll need right now, even if you already have the big stuff such as a computer, printer, and desktop publishing software and write down an estimate of what it costs. Use this list to get you started:

• pens and pencils
• paper (lots of paper)
• paper clips
• stapler and staples
• file folders
• gas money (to go out to meet prospects or hand out fliers)
• design books
• clip art collections
• fonts
• portfolio case
• business cards
• brochures
• letterhead:
• envelopes
• stamps
• a business checking account
• fees for registering your business
• business phone line

Much of this can be written off as business expenses, but you'll still have to have the money to pay for them now, when you need them (and on an on-going basis whether or not you have money coming in from clients).

If you haven't become discouraged yet (and I hope you haven't) use these online tools to further help you determine if a freelance or home business is right for you:

Humanmetrics Small Business Entrepreneur Profiler: Freelancer
Read about necessary attributes and steps for success as a freelance business person.

Office Depot Small Business Handbook & Office Depot Downloadable Forms
Look under "Starting Your Business." Evaluate your suitability to a specific type of business and assess whether or not you are ready to start a small business.

^{Careers in Graphics & Design > Freelance Design > Choosing to Be a Freelance Designer}

This article is part of our free Start a Desktop Publishing Business Email Course. Learn more about the course and sign up now.