Finance for Freelancers

1

Mark MacLeodFreshBooks

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

Agenda

3

Setting the StageMaking MoneySpending MoneyAccounting 101Funding your businessYour long term goals

Setting the Stage

4

Change…

5

20112020

16 MM

70 MM

# of full-time professionals

# of independent professionals

Source: oDesk & eLance 2012 annual reports

Making Money…

6

Mo’ Money…

7

UniqueClearReferrals!LeverageHave a systemSell Value

Pricing…

8

Not about costGet what you pay for…ExperimentValue not time

Value-Based Billing

9http://www.freshbooks.com/blog/2013/06/12/breakingthetimebarrier/

Getting paid

10

RetainersOnline (credit card, ACH)Know HOW before you startRemote clients prepayIt’s your money!

Spending Money…

11

Hiring

12

STAFF CONTRACTORS

Pros: Pros:

Control experience On demand

Build team, culture Low cost

Cons: Cons:

Cost Unpredictable

Hiring

13

ConfidentialityNon-solicitNon-competeNo prior conflictsBenefits?

Contracting

14

Work for hireConfidentialityNon-solicitNon-compete

Performing Work

15

Magic ratioWork in ProgressMeasure twice, cut once

Accounting 101…

16

Reality

17

What we believe…

18

Accounting software is built for accountantsDo what you loveBusiness is financial…

ABCs…

19

Assets – what you ownLiabilities – what you oweEquity – what’s left

Balance Sheet – statement of what you own & owe

More ABCs…

20

Revenue – what you bill your customersExpenses – what you pay to generate revenueProfit – what’s left

Income Statement – statement of the results of your business

What you care about…

21

Invoicing Getting paidExpense controlCompliance

Invoicing…

22

Excel is not an invoicing toolOnline: o Bill more. o Save time.o Get paid faster. o Look more professional

Avoid

23

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

Sales Taxes

24

Must collect if more than $30K in salesBetter to collect even before so you can recover what you payFile quarterly

Cash Management

25

Church & State: Separate bank accountsRack up pointsExpenses: need to keep receipts

Entity

26

Corporation:o More $ to setup and maintaino Enables more income splittingo More professionalo Limited liability

Sole Prop:o Easy. Less costs

Funding Your Business

27

Sources

28

Debto Not available

Equityo Complicated. Expensive

Sales!!!o The best

Equity

29

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

Final Thoughts

30

Build what you want…

31

Business: Love every day

Life: Have a financial plano Clear goalso RRSPs???o Retiremento Succession

Thank you…

32

Mark

@startupcfo

FreshBooks.com