How to Start a Proofreading Business

Do you have superior language skills? With a proofreading business you could put those skills to work and make good money — and now is a great time to do it. The US editorial services industry is seeing strong growth, expanding nearly 8% in 2021 to reach $2.7 billion. Proofreaders check grammar and punctuation in all variety of texts, from manuscripts and articles to websites and business documents, so the market offers considerable opportunity. 

But your chances of success will be significantly higher if your language skills are complemented by business know-how. Fortunately, this step-by-step guide provides all the business insight you need to be a successful freelance proofreader. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a proofreading business has pros and cons to consider before deciding if it’s right for you.

Proofreading industry trends

Industry size and growth

• Industry size and past growth – The US editorial services industry is worth $2.7 billion after 7.9% growth in 2021.((https://www.ibisworld.com/united-states/market-research-reports/editorial-services-industry/))
• Growth forecast – The US editorial services industry is expected to see modest growth the next five years.
• Number of businesses – In 2021, 51,078 editorial services businesses were operating in the US. 
• Number of people employed – In 2021, the US editorial services industry employed 73,479 people.

Trends and challenges

Trends in the proofreading industry include:

• Corporate profits are expected to rebound post-pandemic, and more and more companies are outsourcing writing and editing, boosting demand for proofreading.
• Freelancing platforms like Upwork are helping proofreaders find consistent work.

Challenges in the proofreading industry include:

• Tech tools that are able to edit and proofread may soon threaten the revenue of human proofreaders.
• Sites like Upwork are making it easier for people to get into proofreading, increasing the level of competition.

Demand hotspots

• Most popular states – The most popular states for proofreaders are New Hampshire, Delaware, and Connecticut.((https://www.zippia.com/proofreader-jobs/best-states/)) 
• Least popular states – The least popular states for proofreaders are Wyoming, Alabama, and Florida.

What kind of people work in proofreading?

• Gender –  68.5% of proofreaders are female, while 31.5% are male.((https://www.zippia.com/proofreader-jobs/demographics/))
• Average level of education – The average proofreader has a bachelor’s degree.
• Average age – The average proofreader in the US is 50.1 years old.

How much does it cost to start a proofreading business?

Startup costs for a proofreading business range from $2,300 to $5,700. Costs include a computer and a website. 

If you need to brush up on your skills, you can take an online proofreading course on Udemy for less than $20. You could also take a 50-hour program in proofreading from the Proofreading Academy, now called Knowadays, for about $400. 

You can also get additional support and find jobs through the Editorial Freelancers Association, where an annual membership is $145.

How much can you earn from a proofreading business?

The average rate for proofreading is $25 per hour. If you proofread more complex or technical documents, you may be able to charge more. You’ll have very few ongoing expenses, so your profit margin should be about 95%.

In your first year or two, you might get 30 hours of work per week, bringing in $39,000 in annual revenue. This would mean $37,000 in profit, assuming that 95% margin. As your business gains traction, you could have 40 hours of work per week at $30 per hour. With annual revenue of $62,000, you’d make a decent profit of nearly $60,000.

What barriers to entry are there?

There are a few barriers to entry for a proofreading business. Your biggest challenges will be:

• The language skills required to do great work, so you get repeat customers
• Competition from a large pool of freelance proofreaders

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a proofreading business, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research proofreading businesses in your area and online to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a transcript proofreading business or an AP style proofreader.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as manuscript proofreading or technical proofreading.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

Your services will depend on your skills and background. You can proofread any number of types of documents. You could also offer editing services, which would include assessing and correcting the clarity and style of the writing.

How much should you charge for proofreading?

The average rate for proofreading services is $25. For more complex documents, you can charge $35 or more. You should aim for a profit margin of about 95%.Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will most likely be business owners, who you can connect with on LinkedIn, or find on Google or Yelp and call them directly. You can also sign up on sites like Upwork to find jobs.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you might need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Proofreading Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “proofreading” or “editing”, boosts SEO
• Name should allow for expansion, for ex: “Clear Copy” over “Business Copy Boosters”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Proofreading Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize your proofreading business’s mission, the services offered, your target market, and how you’ll succeed.
• Business Overview: Explain what your proofreading business does, the types of documents you specialize in, and your approach to ensuring quality.
• Product and Services: Detail the range of proofreading services you offer, from academic papers to business reports and manuscripts.
• Market Analysis: Assess the demand for proofreading services and identify your potential customer base.
• Competitive Analysis: Examine other proofreading services available and what will set yours apart, like turnaround times or specialized expertise.
• Sales and Marketing: Describe how you plan to attract and retain clients, through online marketing, networking, or partnerships.
• Management Team: Introduce the skills and experience you and any team members bring to the business.
• Operations Plan: Outline your workflow process, from client acquisition to document delivery.
• Financial Plan: Present a breakdown of start-up costs, pricing strategy, and revenue projections.
• Appendix: Include additional materials such as client testimonials, a portfolio of work, or detailed research that supports your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to proofreading businesses.

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your proofreading business will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a proofreading business.

Step 8: Apply for Proofreading Business Licenses and Permits

Starting a proofreading business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your proofreading business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Monday, Basecamp, or Zoho, to manage your leads, projects, workflows, and timesheets.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Starting a proofreading business can be a lucrative venture, but success requires more than just a keen eye for errors. Here are practical strategies to effectively market your proofreading services:

1. Target Niche Markets: Focus on specific industries or niches where your expertise shines, such as academic papers, legal documents, or marketing materials. Tailor your marketing messages to address the unique needs of each target market.
2. Offer Free Workshops or Webinars: Showcase your expertise by hosting free workshops or webinars on writing tips, grammar rules, or effective proofreading techniques. This not only positions you as an authority but also allows potential clients to experience your skills firsthand.
3. Create Engaging Content: Develop a content marketing strategy by regularly publishing blog posts, articles, or social media updates on topics related to writing, editing, and proofreading. Share valuable tips, industry insights, and success stories to attract and retain your audience.
4. Collaborate with Writing Groups: Partner with writing communities, both online and offline, to tap into a pool of potential clients. Offer special discounts or exclusive deals for members, creating a win-win situation for both parties.
5. Leverage Testimonials and Case Studies: Request feedback from satisfied clients and turn them into compelling testimonials. Additionally, create case studies that highlight the impact of your proofreading services on improving the quality of written content.
6. Utilize Social Proof: Showcase your expertise through social media by actively participating in discussions, sharing relevant content, and engaging with your audience. Positive interactions and testimonials on social platforms can significantly boost your credibility.
7. Implement Referral Programs: Encourage satisfied clients to refer your services to others by offering referral incentives. This word-of-mouth marketing can be a powerful tool for growing your proofreading business.
8. Optimize Online Presence: Beyond having a website, ensure your business is listed on online directories, review sites, and professional platforms. This enhances your visibility and makes it easier for potential clients to find and trust your services.
9. Offer Value-Added Services: Differentiate your proofreading business by providing additional services, such as document formatting, style guide adherence, or plagiarism checks. This widens your range of offerings and attracts clients seeking comprehensive editing solutions.
10. Attend Local Events: Participate in local business events, workshops, or seminars to network with potential clients face-to-face. Carry business cards, and be prepared to discuss the benefits of professional proofreading in enhancing written communication.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your proofreading business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your proofreading business could be: 

• Professional proofreading — because it has to be perfect
• Expert proofreading with quick turnaround
• Unsure of your writing? Leave the editing and proofreading to us

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a proofreading business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in proofreading for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in proofreading. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a proofreading business include:

• Proofreaders – provide proofreading services
• General Manager – workflow management, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Proofreading Business – Start Making Money!

Language is a beautiful thing, and it should be treated as such. If you have great language skills, you can proofread all sorts of texts and documents and learn new things while making good money. Who knows — you might end up proofreading the next great American novel. If you have a true passion for language and are willing to work hard, almost nothing can stop you!  

After reading this guide you’ve got the requisite business skills, so now it’s time to pick up your virtual pen and begin your proofreading business adventure.