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Business Updates & Favorite Reads

 

Business Updates and Favorite Reads

Near the end of September, I confronted the fear of many a small business owner: a slow week.  I assumed this signaled an oncoming dry spell, which would be consistent with the previous year and made all sorts of grand plans for business development.

If you’re going to have a business slump, why not make the most of it, right?

But my prediction was wrong and things picked right back up again!  This is, of course, awesome, but I’ll confess I am struggling a bit to complete all the business development projects I started.

So, for the week of October 30th – November 5th, I’ll be officially “out of office” to finish up my business refresh.  Don’t worry, though!  Any ongoing or new projects will pick right back up on the 6th, and most of you will probably never notice I was away.

Continue…

My Business Ethics Manifesto

People often say they want to make an impact, make their mark, effect change, etc.  But what does that actually mean?

The actions each individual takes may differ but the underlying desire is the same.  To leave the world better than we found it.  People who want to create change in the world see a problem and then take steps to improve it, instead of complaining and continuing on about their day.

I recently read an amazing article over at Yes and Yes about building ethics into your business.  I’ve had some vague ideas about values that were important to me, in and outside of my business, but I’ve never vocalized it or built it into my mission statement.  Remedying that now!

Jenn Wells Design Code of Business Ethics

1. Giving Back

I currently donate $25/month to the Nurse Family Partnership, and another $15 to various causes that are important to me.  I’m going to keep that auto-payment, because it’s easy and I don’t have to think about it.  But I’m also going to contribute 10% of my profits, because I want my successes to contribute to the world and not just my wallet.

2. Atmosphere of Inclusiveness

With a company of one (plus a few contractors) there’s not a lot I can do about this, BUT as a graphic designer I do create visuals that go out into the world.  So it’s my job, along with everyone else in the visual communications field, to create imagery that shows diversity.  To me that means trying to include a mix of races and ages in the stock photos I purchase.  It means broadening the definition of what a business person or a teacher or a parent looks like.

3. Selling with Integrity

I use and believe strongly in soft sales techniques.  One-on-one conversation, building relationships, and providing value through this blog and my social channels.  I don’t use scare tactics, hide prices, try to pressure clients into a sale, or present false choices.  I do present options, represent myself and my capabilities honestly, and focus on the client’s best interests rather than my own.

Real Talk – An Honest Look at Business Finances

Real Talk - An Honest Look at Business Finances

I’m never going to be one of those people/companies that publishes a monthly income report.  Both because I feel like it would be really dull…  (I spent the same $5-$50 dollars per product on all the same products that I spent last month!)  And because I feel like a lot of income reports don’t feel very relevant to other people.

Our businesses are different and our expenses and income will differ wildly.  But beyond that, even if you happen to be another graphic designer, your idea of a profitable month will vary wildly from mine.  If you make tens of thousands of dollars a month, you won’t be able to empathize with my penny pinching for $15/monthly subscription services.  If you’re struggling to get up to $1,000/month, you’ll think my networking group expenses of over $500/year seem excessive.

That being said, I don’t think money should be the taboo topic that it is.  There’s very little to be gained by keeping the subject hush hush and not educating ourselves properly about money.  I also enjoy social experimentation, which means I’m the one at parties who will deliberately bring up an awkward topic to see how people react.

I remember asking a friend how much money she spent on a new (sporty) car.  Another friend jumped in with an appalled, “That’s so rude!”  But sports car friend didn’t mind, answered my question, and I gained a better feel for vehicle costs.  This was good for me because at the time I’d never purchased a new car and had no concept of the relative costs of a flashy new car vs the used, economy version.

To bring this back around to business finances, I often wonder what other people’s financial goals are, what they need to live on, how much they spend, and what kind of return they get on those products.  I also wonder if I’m underselling myself and if I’m trying to restrict myself to an unnecessarily tight budget.

The Story Behind My Price Hike

In 2017 I’ve already raised my prices from $30/hour to $60/hour.  This was not a decision I made lightly.  I agonized over it.  I was reluctant to do it.  Scared.

But two people in similar creative fields had urged me to do it and I trusted and respected their opinions.  So up the prices went!

The first two calls with potential clients ended in haggling and eventually losing those projects.  I started to get nervous.  And then… life and business continued on.  No one since has blinked an eye at my new prices and I’ve been working nonstop for the last couple months.  Several people have told me to continue to raise prices, to which I said, “I’m not ready yet.”

It’s uncomfortable to raise prices.  To demand more for your time and to announce to the world, “I have value!”  I’m glad I did it and business is better than before (for several reasons) but I also want to sit at my current level and get comfortable with it before I continue up that incline.

How Raising Prices Improved My Customer Relations

Seems counter-intuitive, I know.  Landing and retaining MORE clients was the last thing I expected.  But I have a couple of theories on how raising prices benefited my clients.

  1. I can spend more time talking to my clients and on other customer service related non-revenue-generating activities because my new prices cover that time.  No more “wham, bam, thank you ma’am” mentality.
  2. Charging appropriately gives the perception that I have confidence in my own abilities.  Pricing doesn’t always accurately affect quality, but it does (and should) often enough that if your prices are too low, people will wonder why.
  3. I appreciate my clients more.  I’ve always appreciated my clients but in the past, it was easy to feel resentful if someone took up too much time because my pricing simply didn’t cover any extra time for revisions or communication.  I also had more clients who were looking for a deal rather than looking for quality work.  So there was a lack of appreciation all around.

Walmart is amazing and serves a definite need.  But no one wants to be the Walmart of their field.  (For more on that topic see my post on Fiverr and other bargain businesses.)

Profit and Loss

So you’d think I’d be super profitable now that I’ve essentially doubled my prices.  But it’s been a weird year.  2016 was the first year where I cut my full-time job down to 2 days a week to dedicate more time to building my business.  The first half of the year was record-breaking (for me) and I brought in between $1K and $2K each month.  Not bad for a “part-time” gig.

In August business died.  I hadn’t diversified my revenue streams so when the work from my 2 primary clients dried up, I had nothing else to fill that gap.  I also had no idea how to go about marketing or finding new clients and so the second half of the year was more dedicated to learning about business and networking.

Long story short, I’ve learned a TON since that little debacle and this year I have a good mix of new and old clients.  (For me networking and building a referral network has been the most effective but I know a lot of people who do really well through social media.  Either way, you need SOMETHING.)  So when I checked out my P&L, I was expecting to see better numbers than the previous year.

But I’d forgotten that I had a baby a mere 7 months ago.  So my averages were a little low because the first 2-3 months of the year were more focused on the learning curve of working from home with an infant.  According to my accounting software, I was making an average of $600/month and I was spending $400 of it.

I don’t know about you, but I can’t live on $200/month.  Even with a part-time job.  I actually need to recalculate this, but I’ll be honest, I’m waiting for several current large invoices to be sent and/or paid because I want to see the more accurate (and flattering!) numbers.

What I Spend My Money On

According to my P&L, I’m spending 2/3 of my income.  At first glance that seems ridiculous, but after breaking it down with the help of my awesome VA, I know where that money is going.

The biggest expense?  Taxes.  And that’s a huge, huge expense that my previous pricing didn’t factor in at all.  1/3 of my income goes to taxes now that I’m married (vs the 1/5 when it was just my own, more modest salary).

Outside of that, I’ve spent quite a bit on design software (Adobe CC is $50/month) and networking groups (another $50/month).  I’ve purchased things I later regret (join.me premium which was $18/month when I could have used zoom for free) and I learned that monthly payment plans aren’t a bad idea to at least try something out before committing to an annual plan that will “save” you money.

Quick confession here: I’m actually floating a balance on my business credit card at this moment.  I hate having that debt, but I don’t regret my purchase (a laptop) and I use it every day.  I will feel much more comfortable when my current invoices come in and I can pay that card off.  Credit card interest is NOT what I want to spend my money on.

Things I do think are worth the expense:

  • Trello Gold (I use this for tasks, project management, business organization, and on and on)
  • Freshbooks (Time tracking AND invoicing in the same place!  But Wave is a great option, too, if you want free invoicing.)
  • Networking events and coffee dates (anywhere from $50 to the cost of a cup of coffee)
  • Networking groups (BUT with the caveat that you have to find the right ones – I won’t be renewing all my memberships)
  • Buffer (or any social media scheduler!)

Things that haven’t returned my investment:

  • Paid ads (I tried Facebook and Google and probably won’t use them again without hiring someone or taking a few classes on how to use these tools effectively)
  • Zapier (SUCH a cool idea!  But ultimately IFTTT is free and I really just don’t have that many tasks I can truly automate.)
  • Feedly (I don’t know what I expected, honestly)

Design-specific things I spend money on:

  • Adobe
  • Stock photos
  • Fonts
  • Microsoft Office (I pay $7 for one month at a time whenever a client needs a specific thing and I don’t renew until the next Office-based project)

In addition to learning that paying month-to-month, while more expensive in the short run, is actually a smart idea for trying something out, I’ve also developed a definite preference for services that offer a freemium model.  It’s a lot like the concept of content-marketing.  They provide a sampling of their services for free and then if and when you want to take advantage of additional features, you can start to pay for it.  It saves me from regret a month or two later if and when I realize a certain service isn’t actually that helpful.

My Finance Goals

While it’s possible that I’ll find more ways to spend my business income as I make more of it (I have started hiring people to delegate work to and I sometimes daydream about going to business conferences), I don’t anticipate my expenses increasing THAT much.  So my goal is based on my current expenses, taxes, and the lifestyle I’d like to be able to afford.

When I mathed this out, I got about $5,000 as the amount I should be making per month.  This seems like a lot to me!  Wildly ambitious even.  But it does include the income from my part-time job, which drops the amount my business needs to make down to $3,500, which seems more doable.

I’ve been struggling to keep up at my current level of $1,000 or so per month, but a big part of that was trying to “do it all” and be a stay at home mom while also running a business.  That is exhausting and stressful and after some long heart-to-hearts with my husband, we decided it wasn’t sustainable or contributing to anyone’s happiness.

So now that baby is safely ensconced in daycare and I have reliable work hours (that don’t involve staying awake all night!) I’ve got a few plans to make this happen.

  • Networking, always networking
  • Make more effective use of my “funnel” (I set this up and it technically runs about once a month but I don’t promote it at all)
  • Monthly promos (see above)
  • Expand my offerings (I’m planning on partnering with a few different people to hopefully start offering SEO, PPC, and reputation management!)

Starting Your Business – Planning the What/How/Why

Starting a Business - What/How/Why

If you’re reading this, you’re probably a small business owner or considering starting a business. Or you’re a blood relative and it’s a slow day. (Hi Mom!)

It can be overwhelming to figure out how to start a business, what you need to do, and a step I’ve found a lot of people skip is the “why.” Where and when is up to you, so I won’t get into ALL of the “5 Ws.”

Do You Really Need a Business Plan?

A lot of contemporary advice starts with a business plan. But I’ve read quite a few articles from other creative entrepreneurs who skipped this step altogether. My advice is somewhere in the middle.

I think you need to know what you’re getting into and have a plan of action. Running around with a head full of half-fledged ideas is a recipe for failure. Beyond that, if you haven’t defined what success looks like for your business, how will you even know if it “succeeds” or not?

So no, I don’t think you need to make a Word doc with sections organized by roman numerals outlining your company structure, budget, and so on. Unless you need a business loan. Then your bank is going to want to see the numbers.

But I DO think you should have certain key elements outlined somewhere. Doesn’t matter if it’s a notebook, a Trello board, or a Google doc. You should have one central place to keep tabs on your business and to fully flesh out your ideas before acting on them.

What to Do BEFORE Even Writing Your Plan

Don’t waste time writing a comprehensive business plan before you know why you want to start a business. This is the time to think about what it is you want to do, whether it’s feasible, who will buy from you, and if you really want to do the work involved or if it sounds better in theory.

Things to ask yourself:

  • What do I want to sell?
  • Who will buy it? (You can read more about target markets here.)
  • Why will they want to buy it from me and not someone else?
  • Do enough people want this product that I can make money doing this?
  • How do the costs of running this business compare to the potential proceeds?
  • How much effort is involved with the work both in and on the business?
  • Do I really want to wear all the hats that come with being a solopreneur?

If you’ve asked yourself all those questions and want to continue, you can continue to the next step of actually planning.

Things to Include in Your “Business Plan”

I have an official business plan. I’ve researched to see what information should be included and revised it countless times. And then… I never actually look at it for day-to-day business management.

So instead of telling you the BS sections that everyone else will tell you “need” to be included in your plan, I’m going to tell you the sections I have actually used and revisited.

Mission Statement

Also called elevator pitch, this is your one or two sentence statement that clarifies what you’re doing, for whom, and why. It’s easy to waste a lot of time here, so don’t worry about pretty phrasing just yet. What’s more important is to figure out what exactly you’re doing so you have something to base the rest of the plan on.

It’s also the most fun piece of this and, if you’re like me, sometimes it’s easier to keep going when you get started with something enjoyable.

Financial

Yep, it’s budget time. This is much less fun but equally if not more important! Things to go over in this section:

  • Business expenses
  • Taxes
  • The baseline income you need to live on
  • The goal lifestyle you hope to achieve with your business
  • The pricing range you can charge between surviving and thriving (you’ll probably start closer to the first number and raise your prices to the second as you gain skills and experience)
  • How this compares to your competitors’ pricing

Marketing

I think this is a good section to include right after budget because now that you know what to charge, you have to think about who will buy from you. Of course, you might need to adjust your budget after considering marketing costs, but that’s ok. Flexibility is a good thing!

Things to include:

  • Target market
  • Where to find them
  • How to connect with them
  • Costs of customer outreach
  • Competitors
  • Plan to differentiate yourself (Why should clients choose you over competitors?)

Licensing and Permits

Technically this could be “business structure” but if you’re a business of one, you don’t need to lay out each board members duties and how to split finances and so on. You DO need to figure out what kind of business you have, and what kind of license and/or permits you’ll need to run that business in your current location.

Things to include:

  • Do you sell products or services?
  • In what state are you operating and are there rules that pertain to your type of business in that state?
  • IF you need a business license (in Delaware, sole proprietors do NOT need a license because their income gets rolled into personal taxes), do you want to register as a sole proprietorship, an LLC, an S-Corp, etc.?
  • Registered agent (you can hire one or register yourself)
  • Will you need an operating agreement? (some banks require this for LLCs, but in my case, it was a little ridiculous since it was an agreement with myself)
  • Will you register your business name?
  • Will you sign up for an EIN? (sole proprietors can usually use their social security numbers, but it varies by state)

Next Steps

If you’ve laid out all these details and you’re ready to go forward, great! There’s still a lot of work ahead of you, but you’ve also got the fun stuff, like naming your business and branding and doing the actual work you’re signing up to do.

 

Balancing Business and Baby – My Tips

Balancing Business and a Baby

My number one, top tip for working from home with a baby is DON’T DO IT!

Seriously.

If you’re like me, you probably won’t listen to this advice, but you can better prepare yourself than I did. So I’ve made a list of things you should know before attempting this and some tips that might, hopefully, be of help.

Plan on a VERY Segmented Work Day

Babies “sleep a lot” but newborns also need to eat every 2 hours or so. It also takes 30 minutes to feed them, if you’re lucky, and upwards of an hour if you struggle with breastfeeding like I did. Plus changing diapers and soothing and so on. Realistically, you can plan for maybe 30 minute chunks to try to get work done.

As your child gets older, you’d expect those time blocks to increase, but the number also decreases. At 6 months my son takes 2 naps – a 30 minute one and a 60-90 minute one. So attempting to work during a nap feels like roulette. Will this be the long nap or the short nap? Can I get this project done in this time or should I just answer some emails?

Babies DO Need a Lot of Attention

I emphasize this because I scoffed at a friend when he said it. Surely he was just spoiling his child? Nope. Our pediatrician emphasized that you’re supposed to talk to your child once every 60 seconds that they’re awake. For the record, I find this quite impossible, but you see my point. Kids do take up much more time than you expect and they don’t “play quietly.”

As a 6-month old, my son has gone from needing constant feeding to just wanting attention all the time. I can’t even tell you how many days I’ve spent bouncing back and forth between my computer and the baby, feeling guilty because I’m not following the stupid 60-second rule. But even if he doesn’t really NEED a constant flow of chatter from me, he does need stimulation and interaction to grow. So even if you’ve got ears of stone and an iron will, you can’t count on leaving your baby to entertain him/herself while you work.

It Changes Constantly

You can’t make just one plan because babies are different month to month and sometimes different week to week. I had a couple good days during the second month where I rotated the baby through the feeding/sleeping schedule every 2 hours like clockwork and got in several 30-minute segments of work and felt on top of the world. Then his nap schedule changed.

Even now that we’re on something of a routine, I can’t with 100% certainty count on any block of time to do work unless someone else is watching the baby. The one night I sit down prepared for an all-nighter to meet my early morning deadline, he decides to wake up every 2 hours. Another day I just need a few minutes to get through my email and let my clients know that, Yes I’m still here and I haven’t forgotten you!, and that’s the day he’s so fussy I wonder if this is what teething is like. You just never know.

Give Yourself MORE Time Than You Think You Need

I tend to plan for the minimum. I budget the minimum I need to live, plan travel based on the fastest I’ve ever arrived somewhere, and price my projects based on a best-case scenario. It’s not good planning and, especially in the case of postpartum recovery, could be setting yourself up for a lot of misery.

I planned to take 6 weeks off from going into any offices, and started picking back up with my clients after 2 weeks. Phasing things back in worked fairly well for me, but I had an easy delivery and my body recovered quickly. If anything has gone wrong – a C-section, additional tearing, or even just a colicky baby – my plan would not have worked. It barely worked as it was and if I have any more children in the future, I absolutely plan on taking a full 3 months.

Your Brain Won’t Function as Efficiently

I’ve always rejected the idea of “pregnancy brain” or “mom brain” but, blame it on hormones or sleep deprivation, my brain is still recovering. The first couple months were absolute chaos. My husband and I noticed that we can count the number of photos we took those months on one hand, versus the mountain we take monthly now. Because we were too busy surviving to worry about whether we were “documenting the moment.”

None of which is to say you can’t keep working, but plan on being less efficient and effective and don’t beat yourself up when you can’t think of the word you want, or you know there’s a better solution to a problem. It happens.

Naps are Good for You Too

Severely sleep deprive anyone for long enough and they’ll go insane. Studies have been done. Having a baby won’t drive you to that point, but it can reach dangerous levels of cognitive dysfunction. I’ve had moments when I thought, “I shouldn’t be driving right now” and I’ve made plenty of stupid mistakes.

If you’re like me, naps make you feel crappy BUT according to a few different studies, a short nap once or twice a day can drastically reduce some of the side effects of sleep deprivation. Don’t force yourself to work every single time the baby is sleeping. Use some of those naps to get some sleep yourself.

Resources

And my last piece of advice is to find other resources! My experience will be different from someone else’s will be different from yours. Don’t expect your baby to fit into a mold any more than you yourself do. I’ve read tons of advice about “wearing” your baby while you worked – my son hated being in the body sling. Loved being held, just not in anything hands free. Go figure. So you can’t expect any one or even 10 people’s advice to work for you. You have to just keep experimenting.

I found these 2 resources particularly useful:

Hopefully some of this is helpful but if it’s not, the real point I want to leave you with is this: working from home with a baby is hard and it’s different for everyone. Don’t beat yourself up and don’t feel like you have to go it alone.

Have you tried working at home with kids? Do you have any extra tips from your experience?