Ask a Freelancer: Should I Set Myself Up as an LLC?By Nicole Dieker June 23rd, 2015
I set myself up as an LLC last year, complete with a cutesy-wootsy name for my company. Is it better to pitch and apply to writing jobs as an individual or as lead writer of this “company”? Are companies leery of hiring a “company” rather than an individual?
—A Company of One
To answer this question, I need to put on my editor hat. It’s a pretty small hat, because I don’t do a lot of editing work yet, but I do have some experience reviewing and responding to pitches at The Billfold.
If someone were to pitch me a story as the lead writer of a company, red flags would start waving so hard they’d threaten to knock my editor hat off my head. An email that begins “My name is Jane Doe and I’m the lead writer of Cutesy-Wootsy” would make me assume there was some kind of conflict of interest going on. What’s this company about? Are you a writer, or are you doing PR disguised as freelance writing? Is your piece going to be promoting a specific product or agenda related to Cutesy-Wootsy?
I might dismiss the email outright. I’m not looking for pitches from companies; I’m looking for pitches from writers. But let’s say the rest of your pitch was good enough for me to google Cutesy-Wootsy. I’m guessing I’d find out pretty quickly that Cutesy-Wootsy was the name of your LLC, and you are not only the lead writer but also the only writer. I have one response to that: eew.
Don’t try to inflate your expertise by using weasel words. Editors get a lot of pitches, so they’re trained to spot the weaselly ones right away. Instead, establish your expertise by pitching great stories, doing good work, and building your network. You can’t just call yourself a “lead writer;” you have to become a respected, experienced writer over time.
This isn’t to imply that it was a bad idea to form an LLC. There are a lot of good reasons to become an LLC; in fact, Carol Tice’s Make A Living Writing calls it one of the “three ass-covering moves every freelance writer needs to make.” Why? Setting yourself up as an LLC, or Limited Liability Company, helps protect your personal assets if you are ever subject to a business-related lawsuit.
Since I’m not a tax professional, I’ll let Freelancers Union sum up the other big benefit of an LLC:
By setting up an LLC, you also avoid paying both personal and business taxes on your freelance income. As a “pass-through entity” all the income and expenses from your LLC get reported on your personal income tax return as the business operator.
Your LLC is designed to protect your freelance business while you complete work for your clients. It’s about you, not about them—so don’t assume that having an LLC will make any difference as to whether anyone wants to hire you.
On the other hand, including your LLC in your email signature or resume can signal to a potential client that you are a professional who understands the business of freelancing.
To quote Alex Lipton at Shake:
Clients notice the difference between “Frank Underwood Design” and “Frank Underwood Design, LLC”. It sends a clear signal that you take your business seriously and will treat clients with the attention and respect that they deserve.
Lipton also notes that having an LLC shows companies that you understand your role as an independent contractor. You understand both the responsibilities of working as an independent contractor—including asking for and negotiating contracts—as well as the boundaries. Most importantly, you aren’t going to sue the company arguing that you should have been classified as an employee.
Michelle Lowery at SuccessWorks cites one more benefit of forming an LLC as a freelance writer:
Some potential clients may infer that once you become a small business, you’re probably more expensive than a freelancer. Whether this is true or not, it may keep the more, uh, frugal clients out of your inbox, leaving plenty of room for those who are really serious about their content, and serious about hiring you at your possibly higher rates.
So creating your LLC was a smart move. But don’t make yourself look foolish by pitching yourself as the lead writer of a company. Your clients will know that you’re trying to overcompensate for something, and you won’t get the jobs you might otherwise have earned.
Nicole Dieker would love to hear from other writers who have formed LLCs. Did you get more jobs as a result? Send your responses, as well as your Ask A Freelancer questions, to firstname.lastname@example.org.Image by Christine Chan