Glossary Of Terms Frequently Encountered When Freelancing.

1st Payment – The initial payment made in a series of payments.

2nd Payment – The second payment made in a series of payments.

3rd Party – A person or group besides the two primarily involved in a situation, especially a dispute.

4 Hour Workweek – A popular book by Tim Ferriss that promotes the idea of focusing on productivity and outsourcing tasks.

50% Deposit – The upfront payment of half the total project cost before work begins.

60-Day Notice – A two month notice typically given by a client or freelancer to terminate a contract.

70-20-10 Rule – A learning and development model that suggests successful learning comes 70% from on-the-job experience, 20% from interaction with others, and 10% from formal education.

80-20 Rule (Pareto Principle) – A principle suggesting that 80% of outcomes (outputs) come from 20% of causes (inputs).

90-Day Review – A period of time in which a new freelancer’s work is evaluated.

100% Satisfaction – A business guarantee that the customer will be completely happy with the service provided.

1099-MISC – The IRS tax form used by businesses to report payments made to non-employee individuals, like freelancers or independent contractors.

Absorption Pricing – A pricing method where all costs are recovered in the price of the product or service.

Accounts Receivable – Money that is owed to a company by its clients or customers.

Ad Hoc – Created or done for a particular purpose when necessary.

B2B – Business to business; typically refers to companies that sell to other companies.

B2C – Business to consumer; typically refers to companies that sell directly to consumers.

Backlog – The total amount of work remaining to complete.

Benefits – Typically refers to health insurance, retirement contributions, and paid time off, which are usually not provided to freelancers.

Billable Hours – The time spent on a project that a freelancer charges a client for.

Branding – The practice of creating a name, symbol, or design that identifies and differentiates a product or service.

Brief – A set of instructions or a description of a job to be done, provided by the client.

Business Plan – A document that outlines the objectives of a business and the steps needed to achieve them.

C-Corporation – A type of corporate structure where the owners or shareholders are taxed separately from the entity.

Call to Action – A prompt to encourage the user or reader to take a specific action.

Cash Flow – The total amount of money being transferred in and out of a business.

Client – A person or organization using the services of a professional or company.

Cold Calling – The process of contacting potential clients unsolicited in an attempt to sell goods or services.

Collateral – Any physical or digital material used to promote or sell a service or product.

Contract – A legally binding agreement between two or more parties.

Copyright – The legal right to produce, reproduce, or publish a particular piece of content or intellectual property.

Co-working Space – A shared workspace where freelancers and other remote workers can rent desks or offices.

CRM – Customer Relationship Management; a type of software that helps businesses manage relationships with customers or clients.

Deliverables – The tangible or intangible goods or services that will be delivered to a client at the end of a project.

Depreciation – The decrease in value of physical assets over time.

Diversification – A risk management strategy that involves a variety of investments within a portfolio.

E-commerce – The buying and selling of goods or services via the internet, and the transfer of money and data to execute these transactions.

EIN – Employer Identification Number; a unique number assigned by the IRS to businesses for tax purposes.

Elevator Pitch – A brief, persuasive speech that can be given in the time span of an elevator ride to explain a product or service.

Escrow – A financial arrangement where a third party holds funds until certain conditions are met.

Expenses – The cost required for something; the money spent on something.

Feasibility Study – An analysis and evaluation of a proposed project to determine if it is technically feasible and commercially viable.

FICA – Federal Insurance Contributions Act; a federal tax that funds Social Security and Medicare.

Franchise – A type of license that a party acquires to allow them to have access to a business’s proprietary knowledge, processes, and trademarks.

GDPR – General Data Protection Regulation; a regulation in EU law on data protection and privacy.

Gig Economy – A labor market characterized by the prevalence of short-term contracts or freelance work.

Gross Income – The total income from all sources before taxes and expenses are deducted.

Hastag – A word or phrase preceded by a hash sign (#), used on social media websites and applications to identify messages on a specific topic.

Home Office Deduction – A tax deduction that allows freelancers to deduct certain home expenses from their taxable income.

Intellectual Property – A work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights.

Invoice – A bill sent to clients listing the goods or services provided and their cost.

IRS – Internal Revenue Service; the U. S. government agency responsible for tax collection and tax law enforcement.

Job Board – A website where job vacancies are advertised.

Just-in-Time – An inventory management method where materials are only ordered and received as they are needed in the production process.

KPI – Key Performance Indicator; a measurable value that demonstrates how effectively a company is achieving key business objectives.

Keynote – A presentation or speech that sets the underlying tone and summarizes the core message or most important revelation of the event.

Late Payment Fee – A charge for payments not received by the due date.

Lead Generation – The process of attracting and converting strangers and prospects into someone who has indicated interest in your company’s product or service.

Liability – A company’s legal financial debts or obligations.

LLC – Limited Liability Company; a type of business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

LinkedIn – A social media platform designed specifically for the business community.

Margin – The difference between a product or service’s selling price and the cost of production.

Market Research – The process of gathering, analyzing, and interpreting information about a market.

Networking – The action or process of interacting with others to exchange information and develop professional or social contacts.

Non-compete Clause – A contract between a worker and an employer, where the worker agrees not to compete with the employer during or after employment.

Non-Disclosure Agreement (NDA) – A legal contract between at least two parties that outlines confidential material the parties wish to share with one another, but restrict access to by third parties.

Overhead – Business costs not directly linked to a specific business activity, product, or service.

Patent – A government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention.

Pitch – A presentation by one or more people to an existing or potential client.

Profit – The financial gain achieved when revenue from a business is higher than the expenses, costs, and taxes needed to sustain the business.

Proposal – A written offer from a seller to a prospective buyer.

Prospecting – The first stage in the sales process, which involves identifying potential customers.

Quality Assurance – The maintenance of a desired level of quality in a service or product, especially by means of attention to every stage of the process of delivery or production.

 

Quarterly Estimated Taxes – The method used by the IRS to tax income that is not subject to withholding, which includes self-employment income.

Quickbooks – An accounting software package developed and marketed by Intuit, often used by small businesses and freelancers.

RFP – Request for Proposal; a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset.

ROI (Return on Investment) – A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.

Retainer – A fee paid in advance in order to keep a freelancer available for work.

S Corporation – A corporation that elects to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.

SEO – Search Engine Optimization; the practice of increasing the quantity and quality of traffic to your website through organic search engine results.

Scope Creep – The process by which a project grows beyond its originally anticipated size.

Sole Proprietorship – A type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity.

Startup – A company in the first stage of its operations.

Statement of Work – A document routinely employed in the field of project management, which defines project-specific activities, deliverables and timelines.

Tax Deduction – An expense that can be subtracted from a person’s income before the person’s taxable income is determined.

Trademark – A symbol, word, or words legally registered or established by use as representing a company or product.

Upwork – A global freelancing platform where businesses and independent professionals connect and collaborate remotely.

UX – User Experience; how a user interacts with and experiences a product.

Value Proposition – An innovation, service, or feature intended to make a company or product attractive to customers.

Vendor – A person or company offering something for sale, often related to services.

Venture Capital – Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Virtual Assistant – A self-employed worker who specializes in offering administrative services to clients from a remote location.

W-9 Form – A request for a taxpayer identification number, used in the U. S. income tax system by third parties who must file information returns with the IRS.

Webinar – A seminar or other presentation that takes place on the Internet.

Wireframe – A visual guide representing the skeletal framework of a website.

Work-for-Hire – A work created by an employee as part of their job, or a work created on behalf of a client where all rights to the work are owned by the client.

Xero – A New Zealand-based software company that develops cloud-based accounting software for small and medium-sized businesses.

YouTube – A video sharing service where users can watch, like, share, comment and upload their own videos.

Zoning Laws – Legal regulations stating how property in specific geographic zones can be used.

Zoom – A popular video conferencing tool.