My talk from the FITC event outlining finance and accounting fundamentals for freelancers and self-employed people

1. Finance for Freelancers
1
Mark MacLeod
FreshBooks

2. Intro
“Today if we look at
just North America
alone, no one excep
QuickBooks Online
has more online
paying subscribers
than
FreshBooks, making
FreshBooks the #1
cloud accounting
specialist for small
business owners.”
Mike McDerment
Co-founder and CEO 2

3. Agenda
3
Setting the Stage
Making Money
Spending Money
Accounting 101
Funding your business
Your long term goals

4. Setting the Stage
4

5. Change…
5
2011
2020
16 MM
70 MM
# of full-time
professionals
# of independent
professionals
Source: oDesk & eLance 2012 annual reports

6. Making Money…
6

7. Mo’ Money…
7
Unique
Clear
Referrals!
Leverage
Have a system
Sell Value

8. Pricing…
8
Not about cost
Get what you pay for…
Experiment
Value not time

9. Value-Based Billing
9
http://www.freshbooks.com/blog/2013/06/12/breakingthetimebarrier/

10. Getting paid
10
Retainers
Online (credit card, ACH)
Know HOW before you start
Remote clients prepay
It’s your money!

11. Spending
Money…
11

12. Hiring
12
STAFF CONTRACTORS
Pros: Pros:
 Control experience  On demand
 Build team, culture  Low cost
Cons: Cons:
 Cost  Unpredictable

13. Hiring
13
Confidentiality
Non-solicit
Non-compete
No prior conflicts
Benefits?

14. Contracting
14
Work for hire
Confidentiality
Non-solicit
Non-compete

15. Performing Work
15
Magic ratio
Work in Progress
Measure twice, cut once

16. Accounting
101…
16

17. Reality
17

18. What we believe…
18
Accounting software is built for
accountants
Do what you love
Business is financial…

19. ABCs…
19
Assets – what you own
Liabilities – what you owe
Equity – what’s left
Balance Sheet – statement of what
you own & owe

20. More ABCs…
20
Revenue – what you bill your
customers
Expenses – what you pay to generate
revenue
Profit – what’s left
Income Statement – statement of the
results of your business

21. What you care about…
21
Invoicing
Getting paid
Expense control
Compliance

22. Invoicing…
22
Excel is not an invoicing tool
Online:
o Bill more.
o Save time.
o Get paid faster.
o Look more professional

23. Avoid
23
Data entry (just connect bank
account/ credit card)
Fancy accounting terms

24. Sales Taxes
24
Must collect if more than $30K in
sales
Better to collect even before so you
can recover what you pay
File quarterly

25. Cash Management
25
Church & State: Separate bank
accounts
Rack up points
Expenses: need to keep receipts

26. Entity
26
Corporation:
o More $ to setup and maintain
o Enables more income splitting
o More professional
o Limited liability
Sole Prop:
o Easy. Less costs

27. Funding Your
Business
27

28. Sources
28
Debt
o Not available
Equity
o Complicated. Expensive
Sales!!!
o The best

29. Equity
29
Selling a part of your business
o Your goals?
o Alignment?
o Exit strategy?
o Do you want a partner?
o Not easy to divorce

30. Final Thoughts
30

31. Build what you want…
31
Business: Love every day
Life: Have a financial plan
o Clear goals
o RRSPs???
o Retirement
o Succession

32. Thank you…
32
Mark
@startupcfo
FreshBooks.com