This may be news to some freelance editors, if a recent discussion in the EAE Backroom regarding PayPal fees is any indication.
If you run a business to make money, the general rule is that you have to spend money first. Editing is one of those businesses with low costs; a reliable computer and internet connection, some basic software, and your skills are often enough to launch an editing business. This is great for editors, because it allows us to do what we love at a time when there aren’t many employee positions available.
And the internet has given us some ways to reduce those costs with some free business tools. This, too, is great, because it allows people with fewer resources to start an editing business and become successful.
You might not get all the features you want in those freebies, but there are always tradeoffs, right? After all, someone spent their time creating that tool and they still have to make a living.
If you use PayPal to bill your clients, PayPal will charge you a small fee for the transaction. It’s providing you with services: collecting money, holding it in your PayPal account for you, and dropping it into your bank account when you ask. You may also use it to send the invoices, and the company may mediate between the client and you when a problem arises. Additionally, PayPal has to protect your money and data from being stolen and is responsible for that loss if it happens.
All of that costs money. And PayPal should be able to make a fair and reasonable profit for its efforts. So it asks you to help pay for what you profit from.
I’m all for paying as little as I have to and getting something of value for free, just like everyone else. But I’m not OK with finding a way to avoid paying PayPal a fee it has earned. That’s stealing. When you use PayPal, you agree to its terms and its terms include paying a small fee. If you don’t want to pay the fee, don’t use PayPal.
You choose to operate a business instead of (or in addition to) having a regular job. If you run a business, you have agreed to run it by society’s rules. In the Western world, one rule is that you have to pay the costs associated with your business, such as equipment and software. You have to pay taxes on all the money you get from clients (your gross sales), as laid out by the government. You have to pay contractors, vendors, and employees. Because no one works for free.
What’s left over isn’t your paycheck. It isn’t your salary. That’s employee thinking. What’s left over is the business’s profit, or its net income. You might be tempted to think of the gross sales as your income, but it’s not: it’s your business’s income. Your personal income is as much of the profit as you take from the business.
If you want to have a profit, your costs can’t exceed your gross.
You can help increase your chances for profit by charging higher fees, doing more work, and applying business expenses to your tax return. If you can’t find a way to have money left over after you’ve paid your costs, then your business is losing money. Your business will fail if you continue to lose money.
These are the realities we all have to accept to be business owners. As business owners, we have the freedom to organize our businesses the way we wish and we can make our own choices. But we don’t have endless choices. Your circumstances and the other choices you make will affect your business as a whole and limit some related choices.
For example, you might have to use PayPal because your clients will only pay that way. Or because your only other option is international wire transfers and your bank won’t accept them. Or because taking cash is inconvenient. Or … well, you get the idea.
That might be harsh, but business is harsh. Not everyone has the temperament for it. Not everyone has the skills for it. That’s OK. But if you don’t have the temperament or skills for it, then for your own financial well-being you should get out of the business. Look for a job that will give you a steady salary. Create another business that you can make a profit with.
You may not be able to do the editing that you love and make a living at it. That’s hard and disappointing and unfair. But I repeat: the world does not owe you a profitable business. Once you take responsibility for your business, even when the problems aren’t your business’s fault, you’ll be better positioned to make choices that will add up to the profit you seek.