As a freelance writer, I’ve had the opportunity to work on a number of interesting projects and it wasn’t until I started a writing business that I was really able to take my work to the next level. If writing is your passion and you’re ready to make it a small business, this is the article for you.
The Freelance Lifestyle
I’ve worked for the past decade in the entertainment industry, where I’ve made a name for myself as a script coordinator (a multifaceted role in the TV writers’ room that includes proofreading, editing, project management and conflict resolution). Like a lot of people in my position, the ultimate goal is to write for the big (and little) screen. But when any opportunity presents itself to write – even when it’s not for TV – I jump at the chance. I’ve written for educational podcasts and Youtube channels, I’ve crafted the instructions and quotes on a card-based strategy game, and even ghost-tweeted for the titular character of ABC’s Castle. Because the truth is that I just love writing. I find telling stories and crafting clever turns of phrase to be the most entertaining way to make a living.
But it’s always been piecemeal work, independent assignments plucked from online posts or pinch-hitting on someone else’s project. I was, in my head, a script coordinator impersonating a writer.
Taking the Leap
I’ve spoken at length about the duties and exhaustion that come with being a show’s script coordinator. Burnout’s a regular part of the job. After one particular show — a grueling endeavor that was cancelled by the studio days before the pilot was scheduled to shoot — that I hit a wall. I didn’t think I could do the job any longer, but I had accumulated so much knowledge about the software, the industry’s best practices, and the working culture of a writers’ room that I felt like I had to do something with it.
So I wrote it all down. I distributed it as a tiny .pdf written under a pseudonym to people in my community, and the feedback was overwhelming. Fellow script coordinators and writers’ assistants loved it. Producers hated it. And a few kind souls convinced me that this was something that had real value that I should be compensated for. I took their advice, put my name on it, designed a cover, and published it on Amazon, where it remains the bestselling, and only, guide to script coordinating.
But what made this experience so monumentally different to my other experiences writing was that this was my own thing. It was an asset that existed out in the world that I could develop, license, or sell. It meant that, when I was quoted by The Hollywood Reporter, I wasn’t just an imposter pretending to be a writer: I was an actual, bona fide author.
And that it was time to start building my library.
Limiting Liability and Protection
Don’t get me wrong: I was, and still, write on all sorts of projects. But this was a new aspect of the business I hadn’t delved into prior: Creating an intellectual property with the intention of selling or licensing the rights. It also meant I had to start thinking about liability in a new way. If I were dealing with businesses and studios on a project with an enormous budget, then I’d be in significant financial trouble if something went wrong. It was time to incorporate to limit my liability.
By creating a company to control my IP, I was creating a liability shield with two significant benefits.
Protecting Personal Assets – The first, and the traditional reason why people discuss incorporating was to protect my personal assets from the business dealings of the company. If my company had to go into debt from enforcing the copyright of something I wrote, for example, then the things I owned as an individual (and not the company) would be protected.
Limiting Liability – The second was to protect the IP from anything I might personally be liable for. Which might seem a little backwards at first glance, but consider it this way: if I were to collaborate with someone on a project, they’d want to make sure that all the work they did was protected. That if I, personally, were liable for something, that wouldn’t affect the project or complicate the ownership of the IP. The liability shield would protect the company’s investment. In fact, most television writers are incorporated into loan-out companies for exactly this reason.
The Incorporation Game
My accountant was downright excited to talk me through incorporating. Of course, this opened up whole new avenues of how to pay myself and what could be expensed, but the key question I had was whether I should be an LLC or a corporation.
Either structure, she advised me, would still elect to file an S-Corp, so my taxes would be virtually identical. The structures of each would be the same for my purposes, so it was really up to me and whether I wanted to file extra paperwork to become a corporation. She also advised me that studios are often mired in their own understanding of what they think best practices are, and they don’t want to go into business with a loan-out company that’s an LLC. That meant my best bet, if I was still open to a career writing for the entertainment industry (which I am – call me!), was to form a corporation.
Which State to Incorporate?
And then the is the follow up question: where do I incorporate? California charges an annual franchise tax on corporations. If you form your corporation out of state and do business in California, then you have to pay both that originating state’s franchise tax and a “foreign” franchise tax in California…which followed the same tax rate as an in-state corp. Since it’s generally cheaper to pay one tax than two, it was clear that my next stop would be the California Secretary of State’s website.
Forms and Forms
I love making up names. Seriously. When I won a game of Risk Legacy (which allows a game’s victor to permanently rename one of the world’s continents), I gloated over my new land mass “Waughstralia”. It’s still there, three years later.
So I was excited to brainstorm and look up whether certain names were being used. I chose a name I thought fit well (“What’s a name that suggests I’m involved in storytelling and narrative” and “What would be a tongue-in-cheek way to describe the producers of a TV show or podcast?”, I asked myself) and, hey, it was available.
Next stop: the Secretary of State’s website for business entity filings. The process was straightforward. I was creating a basic C-Corporation with one share that I owned.
Once that was filed, it was time to get an Employer Identification Number (EIN) from the IRS. Since the new company would receive money from other companies, and use that to pay me the individual as an employee, that meant the new company was my employer. And thankfully, the process is incredibly straightforward.
Once I had an EIN, it was time to elect to have my business taxed as an S-Corp (a tax option that my accountant found would be the most advantageous for my work) with Form 2253. And last, but not least (for now), was registering my business in sunny Los Angeles.
The Business of Writing
With my i’s dotted and t’s crossed, my new company was up and ready to crank out new business.
How then, you might ask, does someone keep themselves afloat and financially sustained by writing, especially when royalties and script sales can be unreliable?
By writing more, of course. A lot of my work, thankfully, comes from referrals from prior clients. Copywriting opportunities abound on LinkedIn, especially since the position is amenable to remote work. And for someone who’s still getting their foot in the door, if there’s a company or product you feel passionately about, you could cold-email their marketing team with a customized sample copy.
In the meantime, I write original screenplays and manuscripts, and with outlets like Amazon’s new Vella, there’s no shortage of ways to monetize my IP library.
There is No One Path Up The Mountain
One of the running bits of wisdom in the entertainment industry is that you can’t go in with the intention of replicating someone else’s success. It’s true. Everyone has their own anecdote about how circumstances perfectly aligned to let them break in. I didn’t expect my own journey to be so circuitous, but at the end of the day, I’m making my living by writing. Perhaps not exactly where I expected, but in a way that still lets me play with language and pat myself on the back for a particularly clever turn of phrase. That’s been the passion all along.
Oh, and this article? Brought to you by Villains and Thieves (Incorporated).
Note from the Editor
We believe in the power of blended teams — teams comprised of full-time employees and independent contractors — and we love spotlighting independent contractors who take the leap to business ownership and in this case, the birth of a writing business. Shawn Waugh is not only a member of Liquid’s content team, he is also a veteran of the entertainment industry where he has worked on multiple television series productions including Castle and Fear the Walking Dead. This is his story from freelancer to business owner.
#entertainmentindustry #entrepreneurship #Freelancer #incorporation