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How to Avoid Self-Publishing and Traditional Publishing Scams

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If you live long enough, you’ll probably receive a letter from the National Library of Poetry telling  you how your poem has been given an “Editor’s Choice” award, and now all you need to do is send money to see it in print. In fact, the National Library of Poetry even has a poem written in its honor and published in the National Library of Poetry:

The Scam

By Edwin James Howard

I was taken by a scam
You know the sort
Write a poem
You might win big bucks
I entered away
A poem dear to my heart
I’m a semi-finalist
Dollar signs in my eyes.
But then comes the line
Pay us to see it in print
We’ll give you a deal
Pay us some more to tell your life.
I love a good scam
I wish it was me
That thought of this first
Have people pay to write poetry.

In the past, it was easy to spot vanity presses and avoid them for the publishing scams that they were. Today, thanks to the digital publishing revolution, the dividing line between legitimate and scam publishers is harder to draw. Furthermore, even for those authors using traditional publishers and literary agents, scams abound. How can you protect yourself and your hard-earned cash from being taken?

Understand how self-publishing works

If you choose to self-publish, you will likely work with a self-publisher that will provide you with a set of services including formatting, cover design, copyright registration, distributor listing, etc. in exchange for a set fee. This self-publisher will also print your materials for you using either an in-house or (more than likely) outsourced printer.

The cost of printing is fairly even across the board with most self-publishers- or at least it should be- because most self-publishing companies use the print-on-demand company Lightning Source as their outsourced printer. Click here to find out more about expected printing prices using Lightning Source. If a self-publisher wants to charge you substantially more than what the typical printing cost would be using a printer like Lightning Source, that exorbitant fee should immediately raise a red flag with you.

Understand how much publishing really costs

Self-publishers may also charge a premium for such things as purchasing ISBNs or a copyright, when in fact you can buy these items yourself for a much lower fee. Granted, a self-publisher needs to make a profit somewhere; however, profits are typically derived from book sales (through royalties) and not by gouging the author on publishing products. When publishing companies derive the majority of their profits from the authors and not book buyers, they become knows as vanity presses (and get sued). Click here to learn more about protecting yourself from self-publishing scams.

Some self-publishers that have been flagged as vanity presses because of their high printing charges include Arbor Books, AuthorHouse, iUniverse, Llumina Press, WinePress Publishing and Xlibris. Interestingly, AuthorHouse, iUniverse and Xlibris are all owned by Author Solutions, which was sued in April of 2013 for selling poor quality products, not reporting actual book sales (and thus, royalties) and up-selling unnecessary services to authors. Click here to read the entirety of the Author Solutions lawsuit.

Understand how traditional publishing works

Many authors choose traditional publishing houses like Random House or Penguin because these outlets appear more “legit” in the literary world. The main advantage with big-time publishers is that they have both the marketing budget and sales force to actively work with distributors in promoting new books. Of course, the caveat to this statement is that most of the marketing budget and sales force are dedicated to promoting books written by celebrities or already famous authors, not you. In fact, if you as the newbie author don’t already have some kind of following for your book, it’s doubtful that your book sales will be the result of publisher efforts.

The other, though highly debatable, advantage with traditional publishers is that you don’t pay for the actual publishing of your book. Instead, you sign a contract where you give your publisher certain rights to your book and, in exchange, receive an advance and royalties from its sale.

If you use a traditional publisher, read your contract carefully and hopefully with an attorney proficient in literary agreements. Look out for clauses that state “in perpetuity,” as these items often strip you of the rights to your own book for the remainder of your lifetime- and then some.

Understand the publishing middlemen

Because it’s become even more challenging to pitch a book directly to traditional publishers, literary agents are often called upon as the middlemen between authors and publishers. Literary agents are often former publishing house editors who chose to become promotional agents for aspiring authors. Literary agents must also be pitched to and, should they decide to take on that aspiring author, deal directly with the publishing houses to promote her book.

Unfortunately, just like some publishers, there are many unscrupulous literary agents who prefer to make money off the author rather than the book. Some literary agents charge a reading fee for looking over a manuscript (which may or may not even get read). For example, the “literary agency” Kissane Communications, which is based in South Barrington, Ill, once took a newbie author for a ride by charging a $150 reading fee for her novel, which was then read only until about page 20 and then probably discarded. I know this because this newbie author was me, way back in 1992 and before the age of scam-busting websites like I’ve Tried That.

A reputable literary agent does not charge a reading fee- nor any fee, for that matter- because a literary agent works to make an eventual commission on your book sales. To find a reputable literary agent, start with the Association of Authors’ Representatives website for a listing of agents. Then, follow up on specific agents by checking out their websites and which authors they’ve worked with in the past. Don’t be afraid to contact those authors to obtain a thorough review of the agent in question. And finally, should you decide to work with a particular agent, always have an attorney check over the contract you eventually sign.

Understand the new “traditional publisher” publishing scam

If you don’t want to give a literary agent a slice of your earnings or if you already know someone in the traditional publishing business, then you may wish to pitch traditional publishers directly. Be aware, however, that traditional publishers are taking huge financial losses to their business models thanks to self-publishers. As a result, many well-known and even respected traditional publishing houses have made deals with self-publishers/vanity presses in order to profit from newbie author ignorance.

Remember Author Solutions, the self-publisher that owns a suite of vanity presses like AuthorHouse and iUniverse? As of 2012, this company is actually a subsidiary of Penguin Group- yeah, the same Penguin that probably published your high school textbooks. And it’s doubtful that Penguin will clean up this vanity press because guess who now sits on the Penguin Board of Directors? Yep, none other than AS CEO Kevin Weiss. And the story doesn’t end there; this year, Penguin joined forces with Random House, another big-time publisher.

If you think Simon & Schuster is better, think again: Last year, S&S announced that it was launching the vanity press Archway Publishing. It turns out that Archway Publishing is a subsidiary of…wait for it…Author Solutions. Other big publishing names are also getting down and dirty: Writer’s Digest has launched Abbott Press, Hay House now has Balboa Press, and Thomas Nelson has WestBow. Even the bodice-ripper Harlequin has gotten in bed with vanity publishing. And guess what else? All these vanity publishers are subsidiaries of…I feel like I’m repeating myself…Author Solutions.

Why am I calling these new publishing imprints scams?

Let’s say a traditional publisher, say S&S, receives a query letter from a newbie author and declines to publish his book. However, instead of taking the loss of potential author income for what it is, S&S can now tell the author that their new imprint, Archway Publishing, will be more than happy to publish his book. To the newbie author, it sounds like S&S is saying yes to the book- after all, Archway is a part of S&S, right?

What the author doesn’t realize is that the S&S name will never be printed on any part of his book. S&S will also never have a hand in marketing or selling that book. Instead, those tasks will fall on, in essence, Author Solutions. Given its recent lawsuit, how much of a vested interest do you think AS will have in actually trying to sell an unknown author’s book?

The Publishing End Game

Publishing is a business and, like all businesses, is prone to corruption and scams. You as the author need to exercise due diligence when dealing with publishers by any name and affiliation. Too many newbie authors become so enamored with the idea of finally being published that they don’t do their homework on who their publisher/literary agent really is. Don’t become another publisher/literary agent statistic.

 

Need Money and Have a Rugrat? Consider Starting Your Own Daycare

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According to the National Association of Child Care Resource & Referral Agencies, parents in the United States pay an average of $11,666 per year for daycare. Nationally, daycare prices range from $300 to $1,564 per month, and can even be as high as $2,000 per month in expensive cities like Boston or San Francisco.

Cost alone is why many parents choose to start their own daycare at home. However, you need not be a parent in order to start a daycare; at-home daycare can also be a lucrative business.

How to Start Your at-Home Daycare

  1. Find out your state requirements.

Daycare licensing regulations vary greatly state-to-state, so don’t assume that what’s OK in one state is OK in another. The biggest difference between states has to do with required caregiver licensing as a function of the number of children in your care (that are not your own). In some states like South Dakota, you can care for as many of 12 children without needing a license, while in states like Texas, you must have a license to care for even one child.

  1. Get registered.

Even if you don’t need to be licensed in your state for the number of children in your care, all states do require that you at least register as a family daycare provider. Luckily, most state registration forms are easy to fill out and require not much more than your name and insurance company information. Speaking of which…

  1. Get insured.

Kids are prone to fall, get injured and generally get into trouble. Protect yourself, your business and your assets by buying daycare insurance early on. Most major insurance carriers offer daycare insurance, which is really just a form of business liability insurance.

  1. Get incorporated.

Along the lines of protecting yourself, you should become incorporated as an LLC to protect your personal assets from being seized in the event of a lawsuit. If you operate your at-home daycare as a DBA (doing business as) or sole proprietorship only, you risk losing your home and other personal assets to a court judgment made against you. By having an LLC in place, you only risk losing your business.

  1. Perform necessary home improvements/adjustments.

For a variety of reasons, you should childproof your home. Install gates in areas leading to stairs, cover all electrical outlets, and lock your firearms. You should also keep a fire extinguisher in your kitchen. If you have a backyard, it will probably need to be completely fenced in and safeguarded from physical dangers like a swimming pool and/or fire pit.

  1. Get CPR and first aid trained.

Despite your best intentions and preparations, kids are prone to choking on things as well as cutting and/or injuring themselves. To prevent a possible tragedy, you should get trained in lifesaving techniques like CPR and first aid.

  1. Prepare for a site inspection.

If you opt to become licensed, the state’s department of health will pay you a visit at your established daycare facility to make sure your environment is up to code with state safety and cleanliness requirements. Some states will periodically inspect your home even if you are only registered and not licensed.

Common inspection points are listed on your specific state’s inspection application, such as this one offered by the State of Connecticut. Keep in mind that staff and child immunization is also considered part of facility safety.

  1. Check your contractors and/or employees.

Most states require that hired employees pass a background check and not be felons and/or convicted sex offenders. This means that you will need to conduct background checks on anyone you hire and pay for services.

Additional at-home daycare considerations

While these are the most basic requirements for starting an at-home daycare, they are just the beginning. The following items should also be considered, especially if you wish to maintain your business for many years and be profitable.

Revenue. As with any business venture, you’ll want to calculate how much money you need to generate per month/year in order to make revenue and a decent profit from your venture. Knowing this amount before you start your business is ideal because it will help you plan for licensing (or not) and negotiate a fair price for your services.

Marketing. It’s easy to forget that your business should always be undergoing some kind of marketing. You can advertise your at-home daycare by buying an ad in the local newspaper, by putting up flyers in stores and other public buildings, or even by using email sign-ups to disseminate your services and messages.

Education. Although it’s not absolutely necessary, you could eventually consider taking early childhood classes. By having this education under your belt, you’ll be more qualified for your job and thus more justified in commanding a higher price per child. Likewise, knowing how young minds work will help you better manage your brood and keep everyone in line (as opposed to destroying your house).

Finally, education opens up additional career directions to you; for example, you might wish to apply your newfound skills and open up a preschool or an after-school structured study program. You might offer early education tutoring as well as daycare. All these added options help raise your daycare rate.

Summary

Home daycare businesses can be lucrative and allow you to take care of your own kids by staying at home. While there are some hurdles to overcome in getting started, at-home daycares actually don’t require a lot of startup capital. Furthermore, the business can be started by nearly anyone.

Self-Employed? Forget About Getting a Mortgage

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Imagine having an 800+ credit rating and no debt (including no mortgage loan), making a decent yearly income from freelance work and stock investments….and yet still being declined for a mortgage. Yep, that’s what happened to me- even after I was pre-approved for my mortgage loan based on my last two years’ AGIs (adjusted gross incomes). What gives?

If you are a freelancer, and especially if you have recently become a freelancer, be aware that you will probably NOT qualify for a mortgage loan, home equity loan, or even a personal loan.

Why?

Self-employed = unemployed

Banks and other lending agencies are hard set to trust traditional employment as an assured source of future income- even if you get fired or laid off tomorrow. Self-employed individuals have taken a risk by starting their own businesses and finding their own clients, and this is often reflected in their wildly fluctuating income statements. As a whole, self-employed folks are more likely to fail and then become unemployed altogether.

Finally, although never openly stated, many bankers and loan officers associate the term “self-employed” as code for “I can’t find a job.”

Self-employed = low income

Another reason why self-employed individuals are denied for loans is because they don’t make enough money- at least on paper. Yet, according to data published by Zillow, self-employed individuals actually make a lot more money than employed individuals. Furthermore, self-employed individuals have seen a substantial increase in their earnings since 2012, while employed individuals have seen a decrease.

However, in an effort to save money on taxes, most self-employed people also write off their business expenses. This saves a bundle on income tax- but it also lowers net income.

Net income is critical because loan officers use it to calculate your debt-to-income (DTI) ratio, or your monthly housing costs and other debts compared to your net income. A loan applicant’s DTI ratio can be no higher than 43%.

Self-employed = always self-employed

Some freelancers transition gradually into self-employment, working with clients and for employers at the same time. They do this for several reasons, including insufficient client work, employer-based training/education, etc. Also, many employers nowadays will offer employees and independent contractors the option of working from home and/or setting their own work hours, making employment seem very much like self-employment.

You may not care whether your final earnings are reported on a W-2 or a 1099, but your loan officer will. In fact, once you declare yourself to be self-employed on your loan application, your employed earnings will not count towards your net income (unless you’re still employed with that employer).

In my case, because I was employed over a large portion of one of the years I reported to my loan officer, I was told that I made only $286/month for that year. If only the IRS believed that I made such a low figure!

Self-employed = no mortgage?

If you just started your own freelance business or have resigned from your employed job, it may seem like you’re doomed to not qualify for a loan until you earn mountains of cash each year (at which point, why would you even need a loan?). Luckily, it’s not impossible to get a mortgage loan- but it will be harder.

Understand that your ability to secure a mortgage loan, or any loan for that matter, depends on three factors:

Ability to repay + credit score + collateral

Ability to repay.

This is mostly based on your DTI ratio. For employed persons, DTI is calculated using the gross earnings from their last two years of pay stubs. Freelancers and the self-employed don’t receive pay stubs, so their last two years of tax returns are used to calculate the DTI ratio instead.

The problem with using tax returns is that net income after business deductions is calculated, not gross earnings. This is where freelance income is unfairly penalized compared with that of employed persons.

Credit score.

Most lending agencies are not going to approve your loan if you have a credit score below 680 as a self-employed freelancer. Call it discrimination, but that’s just how it works. As an employee, you stand a far better chance of securing a loan despite your low credit score, even if you do end up paying a higher APR.

Collateral.

This can consist of liquid assets, a pension or other regularly distributed income, and/or your home.

Given the variables used above to calculate your ability to secure a loan, here are the steps you should take at least six months to one year in advance of asking for money from a lending institution:

1. Improve your credit score.

While you have the time, ask for a copy of your credit report and find out how you can improve it. Try to achieve a credit score of at least 740, which will significantly improve your approval odds, as well as lower your loan APR.

2. Amend your taxes.

If you took significant deductions in one year on business expenses, consider amending your returns and spreading those costs out over several years- or even not reporting your expenses at all. This could cost you in extra tax, though.

3. Choose your tax years.

You can also, to some extent, choose which tax years your loan officer sees. Typically, you are required to show your last two years of tax returns. However, if you are applying for a loan early in the year, before you have filed your April taxes, you could go back two years before the current tax year. Then, if you find your net income from those years is too low, you could quickly do this year’s taxes and take the two more recent years into account.

Basically, applying for a loan early in the year means you can pick your two best earning years out of three.

4. Pony up a big down payment.

Even if your loan officer tells you to apply for 10% down payment loan, don’t. Save up enough cash so that you are putting down at least 30% on your mortgage loan. If you’re applying for any other type of loan, reduce how much you need to borrow as much as possible.

5. Work with an accountant now.

Get an accountant involved early on and have her calculate what your DTI ratio would be given your current and past net earnings. Discuss ways you can raise your net income or lower your current debts.

6. Obtain contract verification from all your clients.

Request contract verification from all your clients now, before you even set foot into a bank or apply for a loan online. Make sure your verification letters state how much you are earning with each client and how long you’ve been contracted with them. Having such letters ready to go and to supply to your loan officers will save you weeks of time (and aggravation) during the approval process.

7. Find a contractor-friendly lending institution.

With more and more individuals becoming self-employed or performing at least some freelance work, certain institutions are taking notice. Type “self-employed mortgage” into Google and you will locate online banks and other lenders that work with self-employed persons. Some cases in point are Vancity, a Vancouver-based credit union, and Freelancer Financials, based in the U.K.

8. Find a broker who specializes in self-employed loans.

A broker can go submit your income and other information to several lenders at a time. This saves you the hassle of constantly applying for loans and having multiple hard inquiries show up on your credit report- which ultimately lowers your credit score (I lost 0.9 points/hard inquiry). A broker can also provide you with advice on how to best submit your income and other variables.

However, you need to find a broker who regularly works with freelancers and the self-employed. Otherwise, you will be wasting your time with someone who knows about W-2’s….and not much else.

9. Apply at state banks and/or credit unions.

Traditional and national (i.e., “too big to fail”) banks typically work within Fannie Mae/Freddie Mac loan regulations, which are skewed in favor of W-2 applicants. State banks and credit unions are more independent and needn’t comply with such government-imposed restrictions.

10. Consider creating an annuity.

Annuities have long been touted as something for retirees who need a fixed income. However, if you have some liquid assets, you may wish to create an annuity with your bank and have it pay you on a monthly basis. This guaranteed monthly payout raises your net income. It does cost money to create an annuity account, however.

In summary

Being a self-employed freelancer is great in many respects, namely, choosing my own hours and clients and never getting bored with my work. But there are certain aspects to being self-employed that aren’t that great. It’s tough to secure a loan as a freelancer, and the mountain of documents you must supply is maddening. I now realize that I will need to track my income and expenses more closely. I will also need to invest much more time and effort into obtaining a loan in the future.

Still, what doesn’t kill me as a freelancer only makes me stronger. And then I get to write a blog post about it.

How to Get Your Food Product into Grocery Stores and Markets

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In this past Monday’s post, we talked about how to start a work at home catering business. That’s great you if you like to cook and cater events. However, what if you just prefer to cook or bake? In that case, making a food product, and then selling it to area markets and grocery stores, is a better bet. How do you get started?

1. Check your neighborhood zoning laws.

As noted in Monday’s post, many towns and cities are very specific about where commercial activity will be conducted- or not. If you find out that your house or apartment cannot be the site of any commercial activity, don’t fret. You may have a friend or family member who lives in a more permissive neighborhood and can help you out with the cooking or baking of your food product.

Alternately, you may need to rent out a commercial kitchen for your food manufacturing activities. While doing so adds to your start-up costs, keep in mind that using a commercial kitchen is an inevitability for you, at least if you become successful in this line of work.

2. Obtain a food vendor’s license and insurance.

You should get a food vendor’s license from your local or state health authority; doing so enables you to sell your food product at fairs, farmers’ markets and food trucks. Doing so allows you to proceed directly to step #2 without having to worry about renting space in a commercial kitchen or obtaining a food processor license.

You should also enroll in what’s popularly known as a food liability insurance program, or FLIP. This protects you from the financial repercussions of lawsuits should a consumer get sick or otherwise injure himself while eating or dealing with your food product.

3. Test your product on the small market scale.

State-specific cottage food laws allow food product manufacturers to sell certain goods at small market venues like farmers markets without having to go through expensive and time-consuming licensing and kitchen inspections.

This is great news for you because it enables you to test out different food recipes, pricing options, packing colors and sizes, etc., without having to shell out a lot of investment money. You also get to hone your selling skills for the bigger markets down the road.

4. Rent out space in a commercial kitchen.

Once you’ve determined that customers like your food product(s) and that there is enough of a profit to be made from food manufacturing, it’s time to step up your game plan and rent out space in a commercial kitchen. There are probably several commercial kitchens in your area, even if you live in a small town. Consider that churches and community centers often make and serve refreshments or hold food festivals. To do so, they must have commercial kitchens.

Restaurants and bars naturally have commercial kitchens- but these establishments are not always open and thus serving food. You may wish to contact such places to find out if they would rent their kitchens to you.

5. Obtain a food processor license.

A food processor license enables you to sell your food product(s) at grocery stores and large commercial marketplace chains (e.g., Wal-Mart). You can usually obtain such a license from your state agriculture or health department.

To obtain a food processor license, you will need to show that you are generating a food product in a safe and clean manner- thus the reason for first renting out space in a commercial kitchen.

6. Label your product in a USDA/FDA-friendly manner.

You will need to procure packaging for your food product that is functional as well as tamper-proof. Your food will also need to include a label containing a complete list of food ingredients and (optional) nutritional information. Otherwise, no grocery store will be able to accept and sell it. Finally, if you plan to sell any food products that contain meat or dairy, you will also need to follow certain FDA regulations.

You may be able to short circuit your search for appropriate packaging by buying leftover boxes, bags and wrapping directly from restaurant suppliers.

7. File for an LLC and obtain business insurance.

Operating your food manufacturing business as a DBA or sole proprietorship exposes you to a lot of personal financial risk in case there is a food issue that results in a recall or lawsuit. You should highly consider incorporating your business as an LLC, which limits your liability to just your business (as opposed to your total net worth). Alternately, if you have many partners or shareholders, you may consider filing as an S- or C-corporation.

8. Don’t forget about sales tax.

Apply for and obtain a sales tax license from your state department of revenue. You will need to charge a given percentage above the price of your product, then return that money to the state, on a quarterly basis.

9. Study the bigger markets- and then market to them.

Analyze which stores in your neighborhood might have the space and be inclined to sell your food product. Some stores focus heavily on supporting local food vendors, Other stores, like Whole Foods, even help food vendors by offering loans (up to $100,000).

You can approach store managers directly, if the grocer is small enough, but for bigger grocery stores or chains, you will need to locate the corporate buyer. To this end, it’s best if you contract out and work with a food broker who can help you with finding the right contacts and knowing the issues that consumer marketplaces face.

Also, stores will be more likely to try out your product if you offer a marketing deal with them; Whole Foods is well-known for working with vendors who offer coupons or samples to customers. It also doesn’t hurt to create and hand out a food product sell sheet to entice your area store owner.

Should you make and sell your own food product(s)?

Making and selling your own food product through area farmers markets and grocers is a great work-at-home business opportunity. As with all food-related ventures, it is best if you start small and test your product on a small audience before investing a lot of capital and labor. By starting small and working your way into larger and more lucrative markets, you are more likely to be successful.

How to Create a Sell Sheet that Sells Your Invention

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Last Monday’s post described how you can generate a passive income by licensing your invention ideas to companies and other licensees. The key to getting potential licensees interested in your invention idea is to create a spectacular sell sheet. What is a sell sheet and how do you create one? Read on.

Sell sheet anatomy and physiology

If you have an invention or just an invention idea, you need a sell sheet to market that invention to potential developers and manufacturers. The sell sheet is a marketing piece that promotes your invention in a one page ad format by describing the product, its features and benefits, and whom the product can be purchased from. A sell sheet is supposed to take no more than a minute to look over and understand, so it needs to be brief and to the point.

There are sell sheets for companies, hospitals, books, kitchen gadgets, and software programs. What does a typical sell sheet look like?

Presentation1

At its basic level, the sell sheet contains four areas, which are the product description, photo(s)/diagram(s), features/benefits, and the inventor contact information. These areas are shown in the above generic sell sheet, but their exact locations are not static and can be strewn about almost anywhere.

While there is a section for all the features/benefits of an invention idea, there should also be a separate and overarching benefits statement. This statement should be no longer than a single line and should succinctly pitch your idea to your prospects.

Finally, the sell sheet should also contain either a “Patent Pending” statement or patent number.

For example, the Flipside Rulers product shown below essentially flips the product photo/diagram with its features/benefits, and places the description below everything else. This sell sheet also provides the single line benefits statement, “The Most Accurate Reversible Ruler on the Market!”

ruler

 

Why do you need a sell sheet?

You might be thinking to yourself, I already have a great invention. Why do I need to create a sell sheet?

Because, in brief, a sell sheet is much cheaper and easier to create than a physical prototype of your invention idea. The sell sheet effectively combines words and images into a kind of virtual prototype of your product, enabling you to submit that idea quickly and easily to potential licensees.

Even better, whereas in the past you’d be sending out numerous glossy (i.e., expensive) photocopies of your sell sheet, nowadays you can just email your prospects with the sell sheet in an enclosed attachment. You can even set up a website that describes your invention idea, dedicating one page of that website to your sell sheet. Then, all you need to do is provide your prospects with that web page address.

The sell sheet gives prospects a good enough idea about your invention…but that’s as far as it should go. Your sell sheet should provide only enough information to pique reader interest, not include specifics on every individual nut and bolt. The reason for this vagueness is pretty simple- the more a prospect knows about the invention, the more likely it is that he’ll find something to dislike and/or find confusing. If this happens while your invention idea is still being considered, there is a high likelihood that it will be rejected.

However, by sticking to the basics and emphasizing your single line benefits statement (mentioned in Monday’s post), you allow your potential licensee to fit your invention idea into the scope of her existing product line and manufacturing processes.

How to create a killer sell sheet

If you have a software program such as Corel Paintshop or Adobe Photoshop/InDesign, you won’t have much trouble creating a winning sell sheet. However, these programs don’t come cheap, so a better alternative might be to outsource your sell sheet to a freelancer/contractor. Where can you find one?

Sites like eLance, Freelancer.com, Guru.com and oDesk are filled with reasonably priced freelancers who can make several different iterations of your invention idea and save you the headache and expense of learning a program like InDesign or SolidWorks (a CAD program).

You might also consider working with a local community college or a design/trade school to produce more complex drawings or scale models of your invention idea. In such cases, tapping the instructor and asking if some of her students would be able to help realize your invention idea can make for a great classroom exercise, plus a little bit of money for the student.

Just make sure that you have your freelancer or student sign a non-disclosure agreement first before you send him any work. Also, because your freelancer or student may make some changes to your prototype while “fleshing it out,” it’s a good idea to have him sign a work-for-hire agreement that includes language about you being the sole owner of your invention idea. This excludes the freelancer or student from later claiming coinventor status.

What’s next?

After you have the sell sheet generated, it’s time to start soliciting companies and individuals with whom you could see working and actually building your invention. If you spark their interest, you can offer to send them your sell sheet, plus your business card and a cover letter. Within that cover letter, you introduce yourself and your invention, remind your prospect of how and when the two of you met or contacted each other, and note your invention’s major benefit.

It goes (almost) without saying that you should never send unsolicited materials to a prospect, even if you deem that her a perfect match for your idea. Without a proper introduction and invitation, your unsolicited materials will simply get tossed in the trash.

If you get a “no thanks” after sending out your materials, try to find out why your idea was rejected. It will be immensely useful for you as you hone your idea and decide whether to take it to a different company or market segment.

Most importantly, do not become discouraged if your first few attempts at contacting and finding potential licensees doesn’t work out or produces only rejections. It takes time and continued effort to place an invention idea with an appropriate company or manufacturer. But once you get the green light, you will find the process infinitely easier to repeat, leading to a series of licensed invention ideas that generate a steady passive income for you.

How to Make Money by Licensing Your Invention Ideas

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Do you have an invention idea, or even several invention ideas, that have just been sitting on the proverbial back burner? Are you worried about the cost involved with bringing your invention ideas to marketable reality?

Well, fear no more: You don’t need an expensive patent or a manufacturing plant to make money from your invention idea(s). You don’t even need a prototype. In fact, all you need is a good idea- and someone else to do the work for you.

How can you get someone else to do your work?

It’s all about licensing your invention idea. When you license your idea, someone else takes your idea and undergoes the risks of developing, manufacturing, pricing, storing and marketing the product. You, as the inventor of the product, simply collect a royalty from every sale. Typically, product royalty is 3-5%. This may not sound like much, but if you start collecting royalties from several products, the money can quickly add up. With a little bit of time, your royalties can even outpace your regular paycheck.

How to start licensing your invention

Start with a problem.

Inventions all start with a problem. If that problem is commonplace enough, the invention will experience a high enough demand to be profitable. In many cases, the problem need not be a major one- for example, consider the late night TV infomercial item, The Windshield Wonder(tm), which cleans windshields from the inside of the car. Most car owners complain about not being able to effectively clean the inside of their windshields- this item solves the issue.

Find out if similar products exist.

If your invention is good enough, there will already be similar products on the market. That’s right, your invention item should not be so unique that it can’t be located anywhere else. If it is all alone in its market niche, that brings up the possibility that your invention is solving a very rare problem. Without mass appeal, your invention won’t sell, or at least not often enough to make you a profit.

Should you find similarly-themed products on the store shelf, take stock of how they are displayed and marketed. How much do the items cost? Also, be sure to write down the names of the companies that are selling these items; these are the companies you will be contacting later.

Search the USPTO.

It’s possible that your invention idea may already have been invented, manufactured and even marketed. To find out if this is the case, scour the U.S. Patent and Trademark Office before you go any further.

It’s quite possible that a patent for the exact same item that you invented is already in existence. Before you get discouraged, find out what exactly the patent covers. It might be that what you’re looking at is a design patent, where the inventor changed the decorative appearance or configuration of the item rather than its functionality.  Otherwise, you might have a utility patent, wherein a manufacturing process or coding program is described but not the look, shape or configuration of the finished product.

In brief, find out if your exact idea has been filed with the USPTO. If it hasn’t, then you are ready to go on to the next step.

File a provisional patent application (PPA).

Protect your invention idea by filing a provisional patent application (PPA) with the USPTO. The PPA is quick to fill out, does not require the help of an attorney, and it costs only $110 to file. You don’t even need formal documentation; a few simple drawings or photographs of the expected prototype or mock-up will do.

A PPA enables you to state that your invention is “Patent Pending,” which goes a long way towards keeping competitors at bay. Furthermore, the PPA provides the same legal protections as a regular ol’ patent- and for significantly less money and waiting time.

Find out how to manufacture your idea.

Once you’ve filed the PPA, it’s time to find out just how much money it will cost, and what methods must be used, to manufacture your idea. You’ll also need to understand your idea’s technical hurdles and how to overcome them. To this end, you should contact different contract manufacturers that produce items similar in scope to your own product idea and ask them how feasible it would be to realize your particular invention.

You can find contract manufacturers through trade associations. These associations exist solely to put customers like you in touch with vendors and other businesses, so don’t be shy about asking for help and obtaining contact information for at least four or five vendors.

How do you get contract manufacturers to do the grunt work of estimating your manufacturing costs? You can ask to speak to one of their sales reps, then ask her how much it will cost to produce 1,000, 10,000 or even 100,000 units of your invention idea. By creating a sales inquiry and not just a random request for information, you get the sales rep thinking that this could be a huge sale (i.e., commission) for her. This makes that salesperson much more inclined to help you out.

Generate a Nondisclosure Agreement (NDA).

Before you call your contract manufacturers, you should create a nondisclosure agreement (NDA) and have it ready to go when the person on the other end of the line asks for a drawing of or additional details pertaining to your invention idea. NDAs are easy to generate and can be found on a site like Docracy. The basic NDA contains legal language that protects your invention idea from being disclosed to third parties. The document also allows you to take legal action if there is an information leak.

A decent NDA will contain the following four provisions:

  1. All parties agree not to disclose each other’s confidential information.
  2. All parties agree not to use each other’s confidential information without providing compensation.
  3. All parties agree to return all documents, prototypes and information in case no agreement is reached regarding the invention idea.
  4. All parties agree that any information already known to and used by the receiving party is not deemed confidential.

Your NDA should first be agreed to and signed before you disclose any details pertaining to your invention idea. If anyone refuses to sign the NDA, do not disclose your idea to that entity!*

Generate your sell sheet.

Now that you have your PPA and manufacturing information in hand, it’s time to organize all your invention information into a sell sheet. The sell sheet is a one page ad that describes the main benefits of your invention, some diagrams or drawings of that invention, and your contact information. Don’t forget to note that you have a “Patent Pending” on your invention.

You needn’t be a marketer or graphic designer to create a winning sell sheet. Sites like eLance, Guru.com and Freelancer.com provide you with reasonably priced professionals who can take your invention idea and transform it into a detailed illustration. Just remember to have your hired freelancer sign the NDA before you relay any invention information to him.

More information on how you can generate a killer sell sheet will be provided in my upcoming post this Thursday.

Make some inquiries.

Now it’s time to peddle your invention idea to those companies that you first looked up when first assessing the feasibility of your invention idea. When making these sales calls, you can make a cold call, if you’re comfortable with that approach. However, if you don’t like cold calls, there’s no rule about cold calls being the only way to conduct business.

To this end, you can contact candidate companies through LinkedIn, for example. Using LinkedIn, you can find the exact person within the organization that would be your best advocate for licensing your invention. Other online sites include Hoovers, InfoUSA and Zoom Info. In most cases, that ideal person is the product manager. If such a person cannot be located, your other bet is the marketing manager or salesperson.

What should you say or write once you reach your person of interest? Rather than introducing yourself as an inventor, which often conjures up images of wacky and impractical dreamers, state that you are a product developer looking to submit a product idea to that particular company. Then, assuming you aren’t interrupted, use a single sentence to state the exact benefit of your product.

What is a good single sentence statement about your invention? Here are some examples:

For a household products company: “I have a new product that safely whitens laundry without damaging it.”

For an office supply company: “My chairs are ergonomic and cost 90% less to produce than most standard office chairs.”

For a tools manufacturer: “My table saw has a safety shut-off device activated by human tissue .”

Offer more product information.

Close your call or letter by asking if you can send additional product information. In most cases, managers and salespeople won’t object to obtaining a simple email or letter containing your sell sheet; in the worst case scenario, your literature can be easily deleted or thrown out. However, should your sell sheet spark someone’s interest, you might just have yourself a licensee.

Any potential licensing company worth its salt will probably ask that you show up in person to provide a technical presentation of your product and its benefits. Thus, you will need to prepare some slides outlining your invention and all of its benefits. You might even need to throw in a few technical details in the form of charts and graphs.

If you have a friend or family member who is a good orator, don’t hesitate to ask her about coming with you and helping to explain the product and its purpose. Sometimes, it helps to have a “product team” with you during your technical presentation as a show of group collaboration and support- and it doesn’t matter if this team only consists of your Mom, spouse or high school buddy.

Seal the deal- with an attorney.

You might be offered a licensing deal right on the spot following your presentation. However, before you sign the dotted line, get yourself a licensing attorney who knows the fine details of this business process. Let her negotiate the terms for you, especially if you’ve never before negotiated with a company regarding licensing.

Don’t be shy with your licensing company. Ask your contact for sales projections for your invention and the wholesale item price that the company intends to charge. Also, find out if this company wants an exclusive or non-exclusive license on your invention. With an exclusive license, you won’t be able to license your invention idea out to anyone else for a specified amount of time; however, with a non-exclusive license, you’ll be able to query other companies and make licensing deals with them too.

The caveats to each of these license types are that exclusive licenses pay you a higher royalty, while the non-exclusive licenses offer a lower payout.

Get paid!

Once a company has become your licensee, start expecting  your royalty checks to arrive…in the near future. It could still take some time (think months to years) before your product has been developed, manufactured and sold to finally generate that passive income for you. However, if you can licence a few invention ideas each year and make 3-5% in royalties from them, you’ll be well on your way to earning a passive income.

*Your NDA may not be signed automatically if your potential licensee objects to some of the document’s clauses and wishes to modify them so the manufacturing company has better flexibility to create and market your invention. In such cases, you should have your licensing attorney look over the company’s proposed changes before signing the modified NDA.

How to Earn Extra Money as a Voice Over Artist

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Did you engage in theater productions or take acting lessons in high school or college? Do you like to make announcements, toasts or give entire speeches? If yes, then you might be perfectly suited to making extra money as a voice over artist (or voice over actor).

What is a voice over artist?

If you’ve ever listened to a book on tape, a late night product commercial, or a business radio announcement, you’ve probably heard voice over actors speaking and not the respective authors, manufacturers or business owners. Voice over actors are routinely hired by both online and off-line clients because most individuals, truth be told, do not orate well.

There are many broadcast media that hire voice over artists, including TV and radio, for production numbers such as commercials, public announcements, cartoons and animations, documentaries and movie trailers. Non broadcast entities such as corporations, small businesses, religious organizations, webmasters and schools also hire voice over actors for help with creating podcasts, rich media presentations, educational, training and product videos, and even those pesky phone recordings you hear while on hold.

With apps and online games taking off, voice over actors often work with programmers and gamers to generate different character voices and sayings.

In short, there is a wide range of work available for those folks who want to be the voice behind the scene.

What equipment do you need?

At the very least, you will need a quiet, soundproof room as well as a decent microphone. You should also consider installing the free audio recording and editing software Audacity onto your computer.

Of course, as you build your voice over business, you could eventually outfit your recording studio like Todd Schick.

How much money can you make as a voice over artist?

The following voice work rate card from Voices provides you with a good idea of what to charge for your voice work. Of course, as a beginner voice over artist, you may wish to start your rates a bit lower and work your way up while accumulating referrals and samples of your work.

Still, it’s not unusual to earn $200-$300 for a 5 minute voice over even as a beginner, especially if the work is in a highly specialized field that requires fluency with multi-syllabic words and phrases. Thus, if  you have any technical or educational expertise, take advantage of your background and advertise your proficiencies up-front.

So, how can you get started in this business? The easiest way is to check out these online sites, which help you advertise your services, negotiate your rates, and scope out voice over jobs.

Voicebunny

This site, which was launched by two Voice123 co-founders, Voicebunny is a kind of “fast food” version of voice over service sites, offering clients fast and cheap turnarounds on jobs that are mostly in some kind of technical market. As such, you will see lots of requests for audio podcasts, webinars, reports and news articles listed here. You set your own rates and can also post sample voice overs (i.e., demos) for clients to listen to.

voicebunny

Once a client creates a work request, time is of the essence in terms of you accepting that request and creating a voice audition. In fact, you are actually set up with a timer once you take on a work gig. If that timer runs out, the work request returns to the pool.

Your completed audition is first checked by Voicebunny staff for correctness and legitimacy (e.g., not being spam), after which it is sent to the client. The client then either accepts or rejects your audition. If your audition is accepted, Voicebunny pays you your personally set rate. Rejected auditions are not paid for and there are no retakes.

Some criticisms of Voicebunny include excessive audition rejection by Voicebunny staff, lower than average pay, and no extra pay for what is essentially rush work. As such, Voicebunny is a kind of beginner’s site that most beginners leave once they rack up enough work and client referrals.

Voice123

This site is not for beginners and voice over artists deal with clients directly in terms of setting up auditions, negotiating rates and getting paid. The site deals with some big-name clients including Zynga, Universal Studios and MTV.

voice123

While Voice123 charges no commission or fees on jobs, it does “strongly encourage” its members to sign up for its premium membership at $395/year. Members who are signed up under the free or standard membership are still listed in the voice actors directory and can obtain work through direct invitation, but obtaining steady gigs is slim given that standard member profiles are listed below those of the premium members via the site’s search feature. Also, premium members receive audition invitations through the site, while standard members are not notified of such opportunities.

Voice123 uses a voice casting software called SmartCast to match voice talent with appropriate clients based on prior audition behavior and thus cut down on low quality auditions and bidding wars. Thus, if you habitually audition for a type of voice over such as a webinar presentation, you will get invited to more webinar casting calls. On the flip side, if you habitually audition for low-paying gigs, you will be invited to more low-paying gigs.

Voices

This site is the crème-de-la-crème of voice over sites and offers its talent the opportunity to work with clients including national TV stations, movie studios and major corporations. Also, the minimum casting call payout is $100, with a good number of calls paying between $100-$250.

voices

Voices, much like Voice123, offers free and paid memberships, with the free (i.e., guest) members only receiving direct invitation gigs and not appearing at the top of the search results. Also, free members do not see publicly posted jobs.

Paying members also take advantage of VoiceMatch, a software program that, much like SmartCast, matches the most appropriate voice talent to posted gigs and then adjusts its matches based on voice over artist behavior. The site also offers SurePay Escrow protection to prevent clients from ripping off voice over actors; the downside to this protection is that it takes a 10% cut for its services.

Other voice over sites

Snap Recordings

This site occasionally lists available gigs on its site. Interested voice over actors can also peruse career sites like Indeed or Monster for job openings via Snap Recordings.

snap recordings

Voicesnow

This site doesn’t offer a ready-made area for voice talent to instantly create their profiles; however, under the Contact Us tab, artists can apply directly to Voicesnow for consideration.

voicesnow

Voice talent

Voice over artists can also get contracted by Voice talent; the site occasionally posts openings online or through career sites like Indeed, Glassdoor and Monster.

voice talent

Still not sure where to start?

The voice over community is fairly huge and offers many online networking opportunities where you can hone your craft, find out pay rate specifics, and find voice over gigs on your own. Here are some online sites you should consider checking out:

All Star Voices– This social networks posts jobs, lists voice coaches, hosts a resource center, and much more.

Voice-Over Friends– This Facebook group posts regular notices about the industry as well as job opportunities.

Voice Over Universe– This forum posts reviews of voice over sites, educational materials and events.

Are you a voice over artist? Please describe your experiences in the comments below.

How to Make Money as a Food Tester or Food Taster

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Do you love to try new foods or are you a foodie with some amazing taste buds? You can put your taste buds to work and earn extra money by becoming a food tester (i.e., sensory panelist). Lots of food manufacturers and research companies need consumers to try out their products before they are stocked on store shelves.

Sometimes, the work requires that you show up on-site and be a part of a focus group or consumer panel. In many cases, however, you might complete your work online as part of a consumer survey or online forum. Thus, even if you can’t always be physically present at a test facility, you can still make money from home as a food taster.

Food testing companies and laboratories

There are many companies that perform food testing and research for big-name clients like Dole, PepsiCo, Tyson, Nestle, Kraft Foods, etc. These companies often hire food testers for consumer panels and studies that take place throughout the year. Here is a list of some companies you can periodically check in with about food testing opportunities:

Contract Testing, Inc.

This company has offices in Ontario and Georgia and is always recruiting food tasters on its website’s database. Eligible participants are most often called in to work at one of the company’s field sites; however, some products can be taken and tried out at home. Surveys are conducted by computer.

Alberta Agriculture and Rural Development

The Consumer Product Testing Centre, located in Alberta, Canada, periodically recruits food testers through the following web page. Participants can try a variety of food products including pasta, yogurt, chocolate and cookies. An honorarium of $15 is paid for every completed study.

Food Perspectives

This Minneapolis/St. Paul-based company recruits both adults and children to its consumer database.

Franklin Foods

This company strives to “re-invent cream cheese” by researching novel dips, spreads, sauces, etc. Those interested in joining the company’s consumer panel can sign up online.

Herron Research

This market research firm periodically recruits food testers in the Indianapolis, IN and Tampa, FL areas. Interested participants should leave their name and contact information in Herron’s database. Herron will then contact those participants whose specifications match study criteria to join its on-site consumer panels.

Leatherhead Food Research

Leatherhead not only conducts food tasting studies, but also performs consumer analysis and food nutrition studies. This means that panelists who sign up with the site might be asked to undergo fasting, for example, during a study on appetite and certain foods.

Participants in these consumer groups must reside in the U.K.; however, Leatherhead is also looking for home product testers based in the U.K., France and U.S. through its SenseReach program.

MMR Research

This international company, with locations in the U.S., China and the U.K., performs a wide range of analyses for companies like Kellogg’s, Unilever and ConAgra. Occasionally, sensory panelist and consumer focus group opportunities are listed on the MMR Careers page.

National Food Laboratory

This California-based company performs research studies on everything from food safety to packaging to visual appeal. Sensory panelist positions are occasionally offered on the NFL’s careers web page.

Northland Laboratories

This company is based out of Illinois and recruits participants for its food and beverage studies through its online sign-up form.

Food manufacturers

Individual food manufacturers and restaurants will also recruit food tasters and compensate their efforts with not only money but cool schwag like T-shirts, food items and gift cards.

McCormick Corporation

This company recruits consumer panelists to its Maryland office for periodic taste tests. Individuals can participate in McCormick product tastings once every three months.

Schwan Food Company

Schwan is based in Minnesota and, via its Sensory Tasting Laboratory, offers opportunities for taste testers to sample its foods, provide feedback, and be compensated for their time. Potential food testers can learn more about the program through the following web page. The company pays $15 for each completed study. 

Solae

This company, based in St. Louis, develops soy-based products and recruits participants for its food tasting studies on the following web page.

Additional places that list food taster opportunities

Some food testing companies and manufacturers do not list food taster opportunities on their websites but rather on sites like SimplyHired, Monster, LinkedIn, Indeed and CareerBuilder. To find these opportunities, use search terms like “food tester,” “food taster,” “sensory panelist,” or “taste tester.”

You can also try inputting the same search terms into Google or Bing and seeing what pops up. If you’re hoping to work with a specific brand, use Boolean search and input that brand’s name into your search- for example, you could input “food tester AND Kraft” to find out if Kraft is recruiting food testers.

How much money do food taster studies pay?

Food testing focus groups often pay $60-$75/hour for participants who show up and successfully complete the study. Companies that offer online surveys pay between $1/question or $15/survey. Occasionally, companies will offer combined compensation in the form of money and gift cards or free product coupons.

How to Enter Business Pitch Competitions and Win Money for Your ‘Big Idea’

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If you have a hot new invention or business idea, you could try crowdfunding your business idea through a site like Kickstarter or Indiegogo. However, on a more local level, you could also try pitching that idea through a business pitch contest. Why should you consider taking advantage of a business pitch contest?

Business pitch competition perks

1. You learn the art of persuasion

If you plan to run a business over the long-term, there will come a point where you’ll need to raise capital. This might occur by going through a bank, selling debentures or private equity, or just convincing Uncle Bob to loan you a few thousand bucks. By learning how to get investors on board early in the game, your business stands a higher chance of succeeding.

2. You obtain valuable feedback.

In a business pitch competition, every contestant is provided with feedback on her business plan, revenue model, customer base, etc. Also, the judges ask tough questions about how the invention or business idea and how it will be brought to fruition. Such “tough love” ahead of time improves your business skills and areas of expertise.

3. You gain connections.

Places that host business pitch competitions are typically associated with entrepreneur clubs, business schools, business coaching organizations, etc. These places can direct you to people or resources that will aid you in finding an injection molding service or publisher or cinematographer. You’ll avoid making costly production mistakes in the process.

4. You step up accountability.

Anytime a business uses public funds, such as by selling stock, it must provide a public accounting of its business activities. In your case, winning a business pitch competition means that you need to return to the host organization and give an update on your business idea success or failure. You may also be tasked with completing set goals in a given time frame. Such accountability measures keep you from endlessly procrastinating on your work or fudging the revenue report.

5. You gain credibility.

Quite often, big grants ride on the coattails of smaller contest wins. If you’re looking to eventually apply for bigger money or just sign up a big name investor/partner, you are certainly helped by having a contest win in your corner.

6. You get money!

Lest we forget, business pitch competitions enable you to get your hands on some sweet cash. Some contests hand out $500, while other contests award as much as $20,000 for your business pitch.

Where can you find a business pitch competition?

Schools of business

Universities with a school of business will often offer a yearly business pitch competition. As examples, the Robins School of Business offers a $5,000 contest purse, and the Connecticut Center for Entrepreneurship and Innovation offers a $10,000 contest purse. Across the pond, the University of Edinburgh offers a £3000 purse.

In some cases, contest eligibility is limited to current or former students of the school. In other cases, you simply have to be a state or area resident.

Chambers of commerce

Cities, towns and even villages have chambers of commerce that award hefty cash prizes in exchange for business ideas that inevitably lead to business growth in those communities. One example includes the Henry and Stark Counties Fast Pitch Competition, which awards an $8,500 purse to existing and start-up businesses. Another example is Swim with the Sharks, a video pitch competition for businesses fewer than three years old.

In general, contestants have to be area residents or businesses.

Entrepreneur clubs

Often in partnership with a city’s economic development committee or council, entrepreneur clubs host annual business pitch competitions that award several hundred dollars as well as non-monetary perks like free classes, reimbursed filings, etc. Pitch contestants and/or winners may be asked to help out with some of the club’s events or attend a few meetings.

Hackerspaces

Hackerspaces like Sector67 host a monthly Madison SOUP event where attendees enjoy a meal and donate a few bucks to help fund a community micro-grant. Those attendees who pitch a small business idea and win the cash pot are obligated to return the following month and give an update of their progress.

Most hackerspaces are non-profit entities, so the money that is raised during a contest must typically be used to help the local community. However, if you have an idea that would help your neighborhood, county, city, etc., your area hackerspace could be the perfect place to pitch.

Non-profits

Non-profit organizations often feature pitch contests that focus on creating social change. However, that doesn’t mean that your business pitch can’t benefit from these organizations. If you creatively structure your business idea so that it helps a local cause or charity, you can win some big bucks from the non-profit sector. One example includes Social Venture Partners of Pittsburgh; this organization hosts a Fall Pitch that awards $12,500 to the top winner.

Things to keep in mind

You will more than likely need to create and submit a business plan in order to be seriously considered by contest judges. This is especially true if large amounts of money are being awarded.

Business pitch competitions, much like crowdfunding initiatives on Indiegogo or Kickstarter, come with the stipulation that all winners are accountable to the paying organization; in other words, winners need to provide one or more updates of their progress. In some cases, the organization may request that the money be returned if funds are misappropriated or not spent as intended.

In other words, be very clear about what you need the money for and then, don’t blow it on something completely unrelated to the original pitch.

Have you ever competed in a business pitch contest? How did it go? Let us know in the comments below.

Writing for Revenue Share Sites: Worthwhile or Waste of Time?

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Once upon a time, freelance writers could write for content mills like Yahoo! Contributor Network or Demand Media (stock ticker: DMD) and make as much as $2K/month for keyword and link-stuffed writing bits.

Then, the Google Panda, Penguin and Hummingbird updates penalized these ad-heavy and SEO-centric sites and the parent companies suffered. Many content farms either merged, lost/ousted their CEOs and staff, or went out of business altogether.

DMD stock price

Demand Media stock price: DooMeD?

Enter the revenue share model

As fewer and fewer content mills pay their freelance writers even the pittance $5 or $10 per keyword-stuffed article, a different writing model has emerged. This model, which operates via revenue share, is gradually replacing the practice of paying writers a set amount of money for published content.

Instead, revenue share sites emphasize long form, quality content and work with their writers to enhance their journalistic skills. In doing so, revenue share sites are more likely to become populated with lots of “newsworthy” content (i.e., high traffic content) that isn’t penalized by the next Google algorithm update. Some examples of revenue share sites include Examiner and HubPages.

Another case in point is Guardian Liberty Voice (GLV), a citizen journalism site that has been operating for about two years now. GLV’s motto states “boldly inclusive,” and GLV is certainly living up to its claim. Recently, the site announced plans to hire 900 new writers. Yeah, that’s nine hundred. How does a roughly 2-year-old company manage to hire and pay this amazing number of writers?

The answer lies in the term revenue share. GLV doesn’t pay outright for published content but works with writers to help them achieve high page view numbers. This translates to a set pay-per-mille or PPM (i.e., pay rate per thousand views) for the writers and thus their compensation.

The actual help that GLV provides consists of a rigorous training period, or “bootcamp” as it’s called. Writers that pass the bootcamp start earning a given PPM. Writers also can become “Senior Correspondents,” and receive not only a higher revenue share for their own content but also a good share of the revenue generated from “members they assign stories to on their team.”

In turn, GLV receives ad revenue from its advertisers for offering a set cost-per-mille (CPM) to their ads. Because GLV is not a subscription-based online newspaper, its major revenue source is advertising (as is the case even with most subscription-based paper newspapers).

Is Guardian Liberty Voice worth the time?

The following are some of my “nays” to writing for GLV:

It’s not serious journalism

From a journalistic standpoint, the majority of GLV’s citizen-produced content is simply rehashed and/or directly quoted content from secondary sources like Google News, The Wall Street Journal, USA Today and Chicago Tribune. I used to work for a small town newspaper and the first thing I learned is that you never quote other newspapers as your primary sources. No, you either go interview people or you quote data findings from primary sources like the CDC, NIH, U.S. Census Bureau, etc.

So, it seems to me that GLV’s bootcamp consists largely of “training” citizen journalists to simply keep up with the latest Google Trends and re-report them.

GLV’s popularity may be overstated

There are worthwhile publishing platforms that oftentimes pay only via revenue share; Entrepreneur, Forbes and Inc. come to mind. However, these aforementioned sites draw huge audiences as well as prospective clients.

With GLV, the audience is just not that big. The following Google Trends graphic compares GLV to other citizen journalistic sites like Examiner and revenue share sites like HubPages. I’ve written for both Examiner and HubPages and even during these sites’ popularity peaks, never did I earn more than $50/month for content that generated tens of thousands of views. If such hugely popular sites like Examiner and HubPages barely generate any revenue share, how is a fledgling site like GLV going to buck the (literal) trend?

A comparison of trending interest in GLV, Examiner.com, HubPages and Demand Studios

Pyramid scheme-like recruitment

GLV has been criticized for its business practices in different writers’ forums; namely, Senior Correspondents earn 20% of the income generated through their writer “team.” As a result, these correspondents go on social media sites and attempt to recruit writers to apply for writing jobs with GLV. Fresh recruits are then put through a three week boot camp during which they produce mass amounts of free content.

According to one Reddit comment about GLV, “It kinda looks like they’re using their “classes” as a content farm – they require more than 20 articles per student in the training period.” Also, the application process itself requires that you submit a sample 500-word article to the site. 

Lack of transparency about actual revenue share

The following conversation that Carol Tice had with a GLV writer is quite enlightening (check the comments of the post). In numerous instances, the writer was asked to outline how much money GLV writers earned per article or per hour, and to no avail. To be fair, there was one instance of a rate of $38/hour being named, but no mention of how many articles had been produced to achieve this rate or if the writer was also a GLV senior correspondent.

Should you write for revenue share sites?

Given all these issues and remaining questions about just one revenue share site, here’s my advice to aspiring citizen journalists and writers: 

Start your own blog.

Forget about submitting hundreds of articles somewhere else just to eventually earn a “passive income” of $10 or $20 per month. And I quote the term passive income because, on sites like Examiner and GLV, you need to keep submitting regular content each day or month in order to keep collecting your revenue share.

Given that all revenue share sites are not under your immediate control, you could also eventually lose your hard-won passive income should these sites close shop or change their payout rules. In essence, you’re a digital sharecropper and relying on the stability and goodwill of a third party site to make back your initial investment of writing time.

Sure, having your own blog won’t give you the instantaneous audience of Examiner or GLV. However, even revenue share sites rely on you doing your own article PR to generate more page views. Why should you do all this work for just a fraction of the revenue?

On your own blog, you can eventually work with your own advertisers- and keep 100% of their fees. You can also go ad-free and offer quality products or consulting. In the end, having your own blog means having absolute control over your own product- you- without having someone else line their own pockets with your writing and marketing efforts.

Make Money Online by Reviewing Websites and Mobile Apps

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You can make money online many different ways if you like to surf the Web. One of these ways includes usability testing, or reviewing websites and mobile apps.

What exactly is usability testing?

In a nutshell, usability testing is the user-based reviewing of websites, videos, advertisements, static images, interfaces, prototypes and mobile apps. Users such as yourself open up a website or app and are asked to register online, go shopping for a product or service, conduct a search, compare/contrast a site with that of a competitor, answer questions about site use/feel, etc.

Basically, it’s the equivalent of your web designer buddy standing behind you while you peruse his newly designed website or app and tell him what you think of his creation.

Of course, because you’re working from home and the marketers or web developers aren’t coming to your house or apartment, your actions and facial responses are recorded by a microphone and often by a webcam. Some usability testing sites have you download special software that tracks your keystrokes and where you go online (only during the usability testing process, of course).

Generally speaking, most usability tests pay $10 per accepted test. You might receive several tests within a single week, so you could earn hundreds of dollars per month if you really keep tabs on the usability testing site(s) and register with more than one. Even better, some usability testing sites offer longer and better paying tests and even a chance to join online forums; from what I’ve heard, some of those online forums pay up to $150.

Here are four usability testing sites that you may wish to sign up for:

TryMyUI

You apply to this site by sending in a mock review (with video) of an example website. Once you are accepted, the site sends you usability tests about twice per week based on your demographics. If you successfully complete the usability tests and they are accepted by TryMyUI, you are paid $10 via Paypal. In general, these tests take about 10-15 minutes to complete, so at least in theory, you could be earning $40/hour. Or, just about enough money to go out for a pizza at the end of the week.

What’s great about TryMyUI is that this company does not require that you use a webcam, just a microphone. There also is no software to download and store on your computer. What’s not so great about TryMyUI is that you need to submit a rather lengthy application (compared with other usability testing sites) prior to getting accepted.

Userfeel

This site requires you to download its software and use it while reviewing a mock website as part of your application. Once you are approved, you can earn $10 for each successfully completed website or app review. You will need a microphone as well as a reasonably fast computer to perform user tests; a good example of what exactly you’ll be doing is provided on this Userfeel example video.

Currently, the issue with Userfeel is that the site is booked and so is accepting no new testers. A few weeks back, this site was open to new testers. I’d recommend checking back every other week or so to find out if a vacancy exists.

Userlytics 

This usability testing site does not require its applicants to submit an application; you simply register on the site and wait for your invitation (which for me, happened in the space of five seconds). Once you log in, you can view any open tests that you qualify for as well as your completed tests (and their respective status). Userlytics requires that you be equipped with a webcam and microphone as well as a decent operating system (Windows 7/XP/Vista or MacOS Leopard 10.6 or newer) before you can participate in its tests.

Userlytics usability tests are timed and required to be finished in the space of 10 minutes. Once you finish the test and answer a few follow-up questions from the client, you are prompted to submit your report. Userlytics pays $10 per accepted test and payments are sent via Paypal.

What’s great about Userlytics is that you can quickly sign up to the site by simply providing your name and email. Userlytics also works with some major corporations and brand names that you’ll probably recognize. But just remember that, because you’ll be on webcam during the test, working from home au naturel may not be advisable.

UserTesting

This site has you download its screen-capturing software and perform a five minute website review as part of your application process. If all goes well, you’re accepted and can now perform website and mobile site reviews for $10 and $15, respectively. Payment is made via Paypal. Just like with the other mentioned usability testing sites, you will need a microphone for your computer.

While this site has received some good employee reviews (as noted on Glassdoor) and may even be expanding, it does appear that independent contractors are complaining about the lack of steady work. If UserTesting gains more clients and space in 2014, that story might change.

Don’t quit your (work-at-home) day job…

Keep in mind that most usability testing gigs are emailed out on a first-come-first-get basis. So, if you’re not checking your email throughout the course of the day, you might lose out on usability tests that apply to your demographic. Overall, usability testing is not something that will make you rich, but it will enable you to save up for a nice vacation or that mega-screen TV you’ve been craving. Or, in my case, more sashimi dinners.

How LinkedIn Can Help You Find Your Work-at-Home Job

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If you think that LinkedIn is the sole province of disgruntled employees trying to polish up their resumes and escape to another mind-numbing job, think again.

LinkedIn has been a massively successful venture since its launch in 2003- just check out this company’s history and stats. The site currently boasts over 93 million members in the USA (that’s one out of three Americans) and 277 million worldwide. It even offers its own blog.

Using  LinkedIn’s ad tool to find “likely suspect” freelancers and others that may work-at-home, I located nearly 6.6 million members in North America under the category of Entrepreneurship. ContactLabs’ research on LinkedIn‘s job function stats found at least 11% of all North American LinkedIn members identifying themselves with Entrepreneurship. Furthermore, the category of Entrepreneurship was #1 worldwide, coming in at 10.8%.

Freelancers and those who work-from-home are definitely logging into LinkedIn. And there’s a reason.

LinkedIn is a business network that just happens to be social

Like Facebook, Twitter and Pinterest, LinkedIn is a social network. However, that’s where the similarities end. LinkedIn is actually a professional business network that just happens to be a social platform too. A good chunk of LinkedIn members are managers, VPs and company presidents. Many more are business owners. These individuals are not looking to show off their latest selfie or play Fish Wrangler. No, they’re looking to hire, network and learn.

How can you make these head honchos notice you when you’re swimming in a sea of 277 million other LinkedInners?

Optimize your profile.

I don’t care what the pundits are saying about SEO being dead. You need to keyword optimize your profile so that , if potential clients are trying to hire an independent contractor, they can actually find you using either the LinkedIn search tool or Google itself.

Be sure to prominently feature the exact type of work you’re trying to do. For example, if you’re looking to work at home as a freelance dog walker, be sure to sprinkle those words throughout your profile at least 2-3 times. I’d also advise actually placing that title behind your profile name, as in “Sally Sue |Freelance Dog Walker|.”

Present yourself as a business

Don’t you just hate it when you meet someone new and all she does is talk about herself and her “exciting” life? Yeah, clients and employers aren’t too fond of self-absorbed freelancers either. When describing your services, don’t make your entire profile into “I did this, and then this, and this too.”

Nobody cares what you did or do. What everyone wants to know is what you can do for them. So, position yourself like the business you are and actually offer something of value to the consumer. For example, state how your freelance dog walking “keeps your furry friends happy and healthy until you return.”

Get those recommendations

Those first few clients (or ahem, volunteers) you engage with and help out can be pure gold for your work-at-home business- if you know how to position them. In exchange for offering your services gratis or at a reduced rate, ask your clients to review you on LinkedIn. Don’t worry too much about getting a bad review either- you have to approve your review anyway. And a dissatisfied client will typically not agree to give you a recommendation. But you need those stellar reviews to prop you up, much like trustworthy businesses rely on customer testimonials and reviews to prop up their brands.

Don’t be a snoozer.

Sign up to a few LinkedIn groups that are in your area of expertise and actively engage in their discussions or start new ones. Become a impassioned advocate of your particular business outlook, or at the very least offer useful and actionable advice. The goal here is to look like an expert who’s not afraid to dole out professional advice, even for free (because there’s more where that came from). Above all, don’t just sign up to LinkedIn’s groups and disappear or make lame comments like “Yeah” and “Ditto,” because that’s just a waste of everyone’s time- including yours.

Don’t be a user.

What’s worse than being a snoozer? Why, it’s being a user or, specifically, an abuser. If you think that publishing your latest blog posts, product promotions, press releases, etc. will garner customers to your doorstep, you are sadly mistaken. There is a major outcry against LinkedIn spam right now, and certain discussion groups become veritable mobs when someone decides that this group is a good place to promote the latest Goji Berry Blast! MLM business or newfangled way to lose weight using this one weird trick. Seriously, don’t do it.

Don’t be a whiner.

When you send a cover letter out, you (hopefully) don’t whine about how you need the money, or no one wants to hire you, or (sob sob) this-and-that. So why is it that when some members go on LinkedIn, they feel a need to complain how they’ve been jobless for the last 10 years or how “stupid employer X” let them go for no good reason?

LinkedIn is your public cover letter and resume. And if you don’t keep it as professional as possible, employers and clients will steer far away from you. So even if you are one utility bill away from an empty bank account, smile and offer a helping hand to that colleague in your LinkedIn dog walking discussion group. You never know what might happen…or what kind of work will land in your lap as a result.

Don’t be a beggar.

Immediately after you connect with your dream client, don’t spook him by asking, “Hey, you got a job for me?” Make small talk, send him a link to something relevant in his work field, or just hang out and see what he’s trying to accomplish on LinkedIn. Above all, don’t appear needy.

Of course, if the client is listing an job through LinkedIn, definitely apply for it and even mention whom you know at this business. Casual name-dropping is what social networking is all about.

And finally…

Have some fun. Remember that you, unlike millions of your mindless drone ex-colleagues or soon-to-be ex-colleagues, have the option of working from home. That means extra time to play with your kids. That means sleeping in on a snowy Monday morning. That means taking your own dog for a walk in the middle of a warm spring afternoon- just because you can.