I registered as a sole trader here in the UK a few weeks ago and I was invited to attend an info session. I really wasn’t sure what to expect but was hoping it would go over how to keep my books in order, how to file my tax return and, most importantly, what sorts of goodies I’d be able to write off as expenses. The session left me confused at first but I saw the light by the end of it and the world of taxes is much clearer and less scary now than it was when I first started thinking about this sort of thing.

Questions I had that were answered:

• Filing my tax return - It turns out that this is really straightforward. We walked through the paper version of the form and there are actually only a few boxes to fill in. If annual revenue is less than £15,000 then all they ask for is total revenues + total expenses and that’s that. Plus I can do it all inline.
• Working out how much tax and National Insurance is owed - When you file taxes online apparently the system crunches the numbers and spits back how much you owe in a matter of seconds. You could probably find some loopholes if you use an accountant but it’s not essential like I thought it was.
• Claiming the big stuff - Major capital purchases like computers, cars etc. can’t be claimed all in one whack but smaller amounts can be added to your expenses each year. If an item is bought used then each year you can claim 25% of the total cost and then deduct that 25% for the next year before claiming again. For new items I think 50% can be claimed in the first year and then 25% each year after. The numbers change though so this is something to keep on top of and I think all the info is on their website.
• Using your home as an office - I hadn’t really thought of this because I’m expecting to be essentially homeless most of the time but for the time I spend in Beijing it would be good to be able to claim back expenses related to using my apartment as an office. He came up with a formula that I didn’t write down because at the time I didn’t think it applied but it’s something along the lines of dividing 1 (the number of rooms you’ll be using) by how many rooms there are in the house then figuring out the number of hours spent working at home divided by the total number of hours in a week and multiplying those two figures together. Then multiply that number with the weekly expenses involved in running your household (rent, heating etc.) Or something like that.
• Running the business from outside the UK - I asked some other question and the guy misheard me and started telling me that even if I was outside the UK it was ok to pay UK tax and consider the business as operating here because I wouldn’t be paying tax anywhere else and would have earnings coming into a UK account. I’m glad he misheard me because I would have totally forgotten to ask that and it’s been on my mind.
• Lack of paper invoices - Because of the online nature of this business there aren’t going to be a lot of paper invoices flying around. Sure, when I buy a camera or laptop bag or something then I’ll get a receipt but everything else is done electronically, sometimes without even electronic invoices. I asked the guy about the lack of paper proof and he said as long as I have some record of incoming and outgoing money (Paypal payments, affiliate program reports etc.) then that’s ok. I’m going to print out hard copies each month just in case everything fries.

Questions that still remain shrouded in mystery:

• Employing people - I occasionally pay people to do coding or to write articles which, to me, is an obvious business related expense. The problem is that things get fuzzy when it comes to whether or not these people are considered employees. I doubt they are because they’re usually one-off jobs and the writers are never professionals. The cost of this all adds up so I’d like to claim it as an expense but if I have to get tangled up with employer type stuff then it’s almost worth it just to forget about it. But how I could be considered an employer for getting someone to write me a 1,000 word article for £10 is beyond me.
• Claiming travel expenses - This is a biggie for me because I’ll be writing about pretty much everything I do and adding it to one website or another which makes me think that much of my travel related expenses and even tours I go on will be deductible. They touched briefly on travel expenses but used examples like going up to Glasgow for a night which doesn’t really come close to applying to me. They also said that this is an area where people having been taking the piss in the past so the taxman is a lot more strict now. Just my luck.
• Dealing with various currencies - I totally forgot to ask this. Damn. If I transfer my Paypal payments into my UK account as soon as I get them then that eliminates the problem but the US dollar is so crap that I can’t bear to do that. I want to leave it in my Paypal until it comes back from the dead but I’m not sure if this is an option.

I would definitely recommend that anyone in the UK attend one of these sessions. The guy who ran it was pretty helpful for the general things and was really good at passing the buck onto other departments but it’s nice at least to know where to go to ask my questions.

There are people called Inspectors of Taxes and I need to find out who mine is and contact them for clarification on all of the fuzzy issues. They suggested writing a letter to keep a document of my questions (rather than making a phonecall) and once I get a reply I just need to stick to what they said. As long as I have his advice in writing then I’ll be able to justify everything I do to any other tax dudes that come my way. If they think I’m doing something wrong then as long as I have a response from the Inspector of Taxes then I’m ok. Hopefully they tell me what I want to hear!

All up I think I learned a lot today and feel much better about the whole tax issue. Feels good to be on the books too… sort of like a major step forward. One thing I for sure need to do is organise my accounts. I’ve made a start but I still need to troll through my Paypal account to organise some older transactions. Once I get a system organised I’ll post an example for people to see. I had a hard time at first getting my head around how to organise things but after seeing some examples today it really is very easy.

There’s a lot of info on their website for me to sink my teeth into and I’ll report back as I get answers to my questions. I have to say that it feels nice to be at the point where worrying about tracking my income is an issue!

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I’m a bit busy with a whole bunch of annoying things in the offline world so I haven’t had a chance to compile my super duper huge list of potential advertisers. In the meantime, I thought I’d address a comment made on my last post about making that first contact with possible advertisers.

Lea pointed out that sending off bulk emails to addresses I find in magazines might not be the best approach as they’re meant to be for customers, not for random incoming sales pitches. I totally agree with this but the problem I have is that I’m both lazy and completely crap at sales. Because of this, phoning is out of the question. I love the anonymity and simplicity of just shooting off a bunch of emails and hoping for the best but I acknowledge that it’s probably not going to have the results that a phonecall might have. I’ve had luck finding advertisers in the past but I put that down to being able to speak directly to the marketing person. This has either been because they’ve contacted me previously about something else or just because the company is a small one and the people who work there have to be a Jack of all trades.

So I have a semi evil plan and have decided to comprimise a bit. I’m going to stick to emailing, but instead of being totally lazy and jumping straight into my pitch,  I’m going to send out pre-ad pitch emails to try to find out who holds the marketing purse strings. Sort of a little reconnosance mission where I get to be all sneaky and stuff. I’m not sure yet what I’ll write but I’ll draft something up (I’ll let you know what I come up with) and then send it from one of my many email addresses. I’m going to avoid using my main email address so that I can still attempt to get in touch with anyone who ignores me without coming across as too stalkerish.

This whole thing is an experiment and I’m not really expecting much, to be honest. If it works that’s great, if not then I’ll know not to waste my time approaching people out of the blue in the future. Just another step in what has become a massive trial and error process for me!

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The reason I had to wait until Monday to start this little link sales journey of mine is because that’s when TNT Magazine comes out. What is TNT you ask? Well, it’s a weekly free magazine targeted squarely at the same folks that my site is targeted at - Aussies, Kiwis, and South Africans in London plus any other young people here on a working visa. About a two thirds of it is content including feature articles about festivals, life in London, road trips, European travel etc. The rest is packed with advertising and that’s the part that I’m interested in.

The ads in this magazine will act like a checklist for me. It’s reasonable to think that any company advertising in TNT might also be interested in an ad on my website. Ads in TNT are not cheap so I know any company I see in there has a pretty substantial advertising budget and they might be willing to spare a small amount for me.

Each ad in TNT usually has a website and email address listed somewhere so most of my work is already done, laid out in the pages of the magazine. This afternoon at work I flicked through the pages, taking note of possible advertisers. I set up a little spreadsheet listing the type of company (tour companies, shipping, recruitment, hostel etc.), the company name, URL, email address and then I have columns for date emailed and response. The idea is to make a pretty big list using TNT and a few other resources and then work through it, noting when I sent emails, if I got a response and what their reply was.

There are a couple other magazines I can look at for ideas and I know some companies I want to approach just from seeing them around the web or the city. For example, there’s a company called Man and Van that’s an Aussie owned removals company. Then there’s the Oz Bus which is an overland trip between London and Sydney that I’ve seen advertised in the pubs. Plus there are sports leagues I know about. I’ll spend the next few days brainstorming my list and then send out a flurry of emails later in the week.

Having TNT magazine and knowing the market so well is a huge advantage because I’m almost overrun with possible advertisers. I don’t think getting a list of companies would be as easy in most industries. Now the trick is converting as many as I can to sales!

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It looks like I’ve finally tweaked and tinkered with my living in London site enough for me to considering the thing finished. Actually my sites are never really finished as I usually try to keep adding content here and there, but it’s finished enough to be attractive to a potential advertiser. The major thing that was holding me back was just the crappy header that I used to have and that’s been replaced by something a bit less crappy and now I’m ready to attempt to sell ads on the site.

I thought it might be interesting to keep track of my efforts of selling ad space from start to finish. So far I’ve never really been rejected when I’ve approached companies to advertise, but I’ve only ever done it a few times. I’m not expecting my little run of luck to continue with everyone I approach and I think it might be interesting for people to see which companies I’ve approached, how I’ve done it, their reaction, the price I’ve asked, the price that was agreed, or which ones have come back with a big, fat NO.

Starting on Monday, here are the areas I’ll touch upon:

• Where to find potential advertisers
• Making the first approach
• Deciding what types of ads to offer
• Setting an initial price and then negotiating
• Sealing the deal and receiving payment
• Keeping track of link sales
• Building rapport with advertisers and keeping them sweet

I’ve written about some of these things already but think that with an actual site and actual companies the whole thing becomes a bit more interesting. Rather than making a post about each heading, I’ll just be giving a sort of running progress report with those topics as key features.

When I built my London site, direct link sales were something that were on my mind from the start. I know that there are a lot of companies who want to advertise to the market my site is aimed at and the trick for me will be convincing them that my site is the way to reach them. I’ve always been really bad at sales so this will be a challenge, but one that I’m looking forward to.

Keeping track of things from start to finish will hopefully shed some light on this whole link sales process and open my eyes as well to how it all works. Here’s hoping things go smoothly! Nah… that’d be boring.

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The major advantage of earning a living online is being able to do business from anywhere. Another thing that doesn’t seem to get spoken about quite as much is the ability to do business with virtually anyone.

One of my best performing affiliate partners has sales coming in from all over the world. Most sales tend to come from the UK, Australia, USA, New Zealand and Canada with a spattering from Europe and the occasional sale from Asia. Seeing all of the sales laid out in front of my by country has opened my eyes to something I hadn’t given much thought to before - who I do business with can have an effect on the bottom line.

The product is travel insurance and so far for November I have 18 sales from the UK and 20 from Australia. My Australian sales have earned me just under $300 but UK sales have brought in over $450 so far with two fewer sales. This has proven to be the case month after month - sales from the UK are bigger and therefore pay out more than any other country I deal with. Conversely, I have 13 sales from the US but my commission thus far is a pitiful $65.

I attribute this mainly to the strength of the mighty UK pound and to the fact that, based on my experience of living in several countries, it’s much easier for a UK resident to drop £200 on an insurance policy than for an Aussie/Kiwi/Canadian/Yank to spend $400 on the same thing. Maybe the reason I think that is because I’ve only ever earned $7/hour in Canada so saving up $400 would take an eternity and in the UK saving £200 for me is just a matter of staying in a few nights. I also think the low payout on American insurance policies is because they tend to travel for shorter periods of time.

My point is this… I can choose who my target market is. Based on exchange rates, earning power, length of trips and population I think that for travel insurance, I’m going to focus on UK residents and try to get me a piece of the mighty pound. Being American doesn’t mean you have to target Americans and same goes for any country. If you speak Japanese, experiment with some sites targeting Japan. If you speak Swahili, by all means target… uh… whatever country speaks Swahili. Be creative and don’t limit yourself to operating within borders.

Now the point of this post isn’t for all of you to start travel insurance sites aimed at UK residents… no, don’t do that. I guess this whole targeting specific markets based on offline factors is something I only just thought of and I want to make sure the rest of you are keeping this in mind when you choose your target markets.

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Inspired by some great travel sites I’ve decided that I’d like to put my efforts into creating a travel magazine type site of my own that I can be proud of. I’ve got lots of ideas and I think that, because I’ll be travelling, I will be able to offer a lot of first hand tips and tales from the road that will hopefully set the site apart.

This has created a bit of a dilemma for me though. I have what I think is a good domain name with Travoholic.com, the site is about 7 years old, Google is in love with it, it has some great inbound links and I really think it’s the best spot for the new site I have in mind.

The problem is that, at the moment, the site is a pretty good earner for me with Adsense, Text Link Ads, Linkworth and direct link sales even though it’s sort of crappy. I’m not sure the type of site I have in mind would be that well suited for affiliate programs so I’d be monetising it with those same four things.

I guess my dilemma is an ‘if in ain’t broke, don’t fix it’ type thing. True, the site how it is now isn’t the best looking thing in the world and has been neglected, but it also earns me a decent amount each month. If I were to scrap it completely and start with a new site I’m worried that I’d be throwing that money away. Most of my traffic currently comes from Google and I wonder if the new site would rank as well, or at all, for the same keywords.

My other option would be to start a whole new site from scratch and leave Travoholic.com alone to rot away slowly. Finding a domain name will be a nightmare but I’m sure with a bit of creativity I’ll be able to come up with something. I don’t doubt that the new site will do well with time because I have a lot of other sites that can link to it and the quality will be high, but I really feel that Travoholic.com is the right place for it, especially because it has a lot of great inbound links that I’d have a hard time getting again.

I guess I just don’t like the idea of Travoholic.com becoming a neglected, link whoring site. I like to build sites I’m proud of and even though it will probably continue to earn a decent amount of money and bring in plenty of daily visitors I’ll still always think I can turn it into something better.

I think I’m leaning towards registering a whole new domain and starting the new site from scratch. I suppose I can always go back to Travoholic.com and tidy it up when I have the time. It’s not a total lost cause, just a bit unruly.

What do you think I should do?

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Well it looks like giving my computer a rest for a night while I went to the pub and the day after while I stayed in bed hungover did the trick. When I surfaced on Saturday things were up and running and so far there’s no sign of whatever was causing it to refuse to connect to the net.

Problem is, now I’m not working! I haven’t had the flu since I was a kid so I’m not sure if that’s what I have now but I’m out of commission at the moment. I’ve been in bed all day Sunday and have chucked a sickie today and am about to go on a mission to buy drugs, tea and fruit and then I’ll probably be spending the rest of my day there too.

Sorry about the lame post! I’m hoping some serious amounts of cough syrup and oranges will bring me back to life and I’ll be back to my usual self tomorrow.

*cough cough*

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I know nothing about computers. Not a thing. I can work out how to use bits of software to get things done but when it comes to computer hardware, I’m snookered. So far this hasn’t really caused me any major problems, but I fear that it my lack of knowledge could come back to haunt me one day.

The day might be upon me, actually. I can’t get my desktop computer’s internet connect to work. It decided to pack it in on Wednesday night and has been in hiding ever since. My foolproof solution of turning the computer off and on has failed me and now I’m at a loss.

I know there’s nothing wrong with the house net connection because I’ve finally figured out how to get my laptop connected and it is hooked up to the net fine. I’ve tried everything I can think of (which isn’t much) and still no joy. I’m hoping a few more toggles of the off/on button will eventually come to my rescue like it did last month when I saw the blue screen of death but so far, no good.

This has got me thinking about my lack of knowledge about the non-web type stuff. It’s not essential to know everything about computers but it can’t hurt to know a little bit. Not knowing anything at all can definitely be a pain, that’s for sure. Plus if I intend on making my living online, computers are the tool of the trade and learning as much as I can will only make my life easier in the long run… right?

I think I’ll go to the pub tonight and give my computer a longer rest. Maybe if I neglect it for a few nights it’ll get its act together. I hope so because if it doesn’t then I’m screwed!

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When I think about my motivation for wanting to earn a living online it’s a pretty simple answer for me - freedom. I want to be able to do what I want, when I want. At the moment, travelling is what I want to do. Two years from now it could be a different story. I might want to settle somewhere and pursue other interests. Such as…

• Art - I used to draw and paint portraits when I was younger. Mainly sports art but I also did portraits of friends and family and stuff as gifts. I’d love to get back into this and spend more time being all artsy fartsy.
• Music - I’d also love to learn how to play guitar. I’m pretty sure I’m tone deaf (except when I’m singing in the shower) so this might be totally impossible but I won’t know until I try. Or I could just take the guitar with me into the shower where I will no doubt become a rock god.
• Photography - I was always convinced that the only way to take a really great photo was to have a really great camera. Now that I’ve got one of those fancy pants SLR things I have realised that I am, in fact, just a crap photographer. I really should read the instruction manual.
• Languages - I’ve been threatening for years to learn a language. I guess this sort of goes hand in hand with travel since it’s better to be surrounded by the language than to be sitting in a classroom 3 hours a week. I’d really love to head off to some random place like Yemen and learn Arabic. Yemen… yeah man!
• Study - I’d also love to spend some time honing my web skills in a real, live school. So far I’ve pretty much stumbled and bumbled my way through everything by trial and error. I don’t think I’ve even read a single book the whole time. I’d be really interested in taking an actual web design course and maybe, if I’m feeling brave and brainy, some PHP or programming stuff.

So I’m definitely not after money for money’s sake. I want to buy back my time and be able to pursue pretty much anything that happens to capture my imagination at the time. If I decide one day that I want to join the circus then, damnit, I’m going to join!

What sorts of passions other than travel would you pursue if you found yourself with loads of time on your hands?

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Since I began the overhaul of my working holidays site I’ve been 100% convinced that I wanted a forum. I was so into the whole forum idea that I was even going to spring $160 for the grand daddy of them all, vBulletin, rather than a free option. I figured that if I was going to spend the time nurturing it I might as well have a platform with all the bells and whistles.

Now as I think about it more and more I’m wondering if a forum is really the way forward. I’ve set money aside to buy it so that’s not the issue. I’m more concerned about whether the time it takes to get a forum up and running will be worth the potential payoff.

Forums don’t tend to be big money earners from what I’ve heard. A good one will increase a site’s page views drastically but whether this traffic converts or not is up for debate. Plus there’s the effort involved in getting it off the ground, maintaining and policing it. In the early days, starting a forum usually involves the creation of multiple personalities and a lot of talking to yourself online. I’d also have to do a lot of question answering from those rare legitimate posters and, because of the nature of the website, this could mean a lot of time spent researching answers.

Once people start visiting the forum more regularly, so do the spammers and keeping on top of dodgy posts is a huge headache. I’m sure there are things that will reduce spam but I’m not sure if they’re 100% effective and I would think I’d still have to spend some time zapping the porno posts etc.

But on the other hand, forums are great for building a sense of community and could act as a place for any contacts I make through the blog to go for a chat amongst themselves. It would also allow people to ask questions that I’d never have thought of and give me new ideas for what I can add to my site. Plus it gives people a chance to solve each other’s problems and free content is always good!

So I guess I’m in a bit of a dilemma. I’m doubting my choice to add a forum because I’m not sure if an active forum will be worth the time it takes to get it up and running. What do you think? Do forums add overall value to a site in your opinion? Is the site’s topic one that you think would be served well with a forum?

Just to clarify, I’m think of adding a forum to Working Holiday Info, not Nerdy Nomad. There’s already a successful forum about travelling on web earnings over at Working Nomad.

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